Insurers, auto companies meet today

Risk firms refuse to settle Mumbai flood claims on grounds of exorbitant service charges

Insurers and auto manufacturers have called an emergency meeting tomorrow to thrash out differences pertaining to settlement of motor insurance claims following the Mumbai floods.

"Insurance companies are not coming to settle the bills unless we agree to their billing charges. Car owners are being affected since they cannot get their cars out of the garage," said a senior service station official at Worli.

With over 15,000 cars damaged by the Mumbai floods, insurers are facing steep claims. They feel auto manufacturers should be "more reasonable" in calculating the charges.

"It is difficult to say today what impact this will have on car owners. Tomorrow we should have a clearer picture," said Kamesh Goyal, CEO Bajaj Allianz General Insurance Company.

Auto manufacturers are offering up to 25 per cent discount on labour charges and spare parts for the customer but they do not want insurers to profit from this gesture.

Insurers, on the other hand, allege that labour charges have been doubled and the industry is taking advantage of the situation. "Losses are high and it is not possible to leverage the situation," said the CEO of a Mumbai-based private insurance company.

Insurers are even asking their customers to get their vehicles repaired by private mechanics even outside Mumbai to hasten the process of claims settlement.

They feel that the towing charges to Pune, Ahmedabad and Nashik would be considerably lower than the high labour charges demanded by service stations in Mumbai.

"Private mechanics may not have the knowledge, expertise or the necessary equipment to undertake repairs and thorough checking. At the end of the day, the customer should not feel that the car manufacturer has betrayed his trust and not undertake a proper and thorough check," said a senior official with a leading automobile manufacturer.

Service stations maintain that the situation today is out of the ordinary with many mechanics fearing to undertake repairs. Many cars that have come in from being submerged in the floods have had rats in their bonnets. Many dealers have even supplied mechanics with Doxycycillin, a major antibiotic against rat diseases, considering the major health hazard.

Service station officials say the labour charges levied today are as per the prefixed rates decided by auto manufacturers.

What has happened however, is that auto manufacturers across the board "" Maruti, Hyundai, Tata Motors and others "" have outlined certain procedures their service stations have to follow to ensure proper repair and checking of the vehicle before it is returned to the owner.

Some insurers, however, are trying to cut corners to reduce costs by identifying certain parts as "accessories" when they are very much part of any car. Service station officials highlighted how some state insurers have struck out repairs to car seats, terming them as "accessories".