What is the claim procedure against a general insurance policy, if a third party is injured in a car accident? A motor insurance policy covers the liability of a policyholder, which he/she may become legally liable to pay on account of bodily injuries by a third party in an accident involving the insured vehicle. This provision is under the Motor Vehicles Act, 1988. The insured should notify the accident to both the local police and the insurance company. Copies of the relevant documents, such as the first information report, driving licence and the claim registration form must be submitted to the insurer within a reasonable time.
If any summon is received from the Motor Accident Claims Tribunal, it should be immediately forwarded to the insurance company for necessary action.
How does under-insurance affect a claim? Under-insurance means that your property is insured for an amount less than its value. In case of under-insurance, the owner becomes the insurer for the proportion of the loss not covered under the policy. If the property covered under a policy is of greater value than the sum insured, in case of a claim, the owner will be entitled to recover only a proportion of the loss from the insurance policy. It will be equal to the proportion, the sum insured under this policy bears in relation to the total value of the property.
I retired from the Indian Army and bought a house in an army personnel’s colony. The buildings are old, but I don’t exactly know their age. I want a householder’s policy for my house. Can I get one? Till date, there has never been any major damage or repair in the colony. Yes, you are eligible to take a householder’s policy, as it does not depend on the age of the building. A major condition that has to be fulfiled to get the policy is that the building needs to have a ‘pucca construction’. A householder’s insurance does not cover regular wear and tear. It covers any damage to the building due to fire, earthquake, terrorists or any natural peril. As an insurance company, we suggest that regular maintenance of the structure should be done, but it is not mandatory. We also recommend that you take a policy that covers the structure as well as the contents of your house.
Recently, I bought a house in the outskirts of Delhi. I paid Rs 4,000 a sq ft, 25 per cent of which was paid in black. I want to get a householder’s policy. Will the insurance company factor in the black money paid? The structure insurance for a property does not go by the market value of the property. The sum insured is fixed on the basis of the building’s reconstruction cost. For example, if a house is totally damaged due to an earthquake, the insurance company will pay the reconstruction cost of the house, as the land to construct the house is already present. Hence, the value of the house for insurance is always the reconstruction cost multiplied by the square feet area of the house, and not the market value of the property.
The writer is managing director and CEO of Tata AIG General Insurance. The views expressed are his own. Send your queries to yourmoney@bsmail.in
