Getting third-party insurance cover against road accidents tedious and time-consuming

KOLKATA: Bhaagavat, a meat merchant from Mangalore, was hit by a car while he was riding pillion with his friend on a motorcycle in February 2002. He suffered heavy injuries and could not go to work for several months. Two years hence, he filed a compensation case with the local Motor Vehicles Tribunal. It took him almost seven years to settle his case and receive compensation.

According to an Insurance Information Bureau (IIB) study, it takes two years for an average individual who has suffered a road accident to intimate the loss for claiming compensation under third-party cover. It takes another four years to receive any sort of compensation from an insurer. The study on trends of claims payments under third-party covers shows that the delay is even more in case the victim has lost his/her life in the accident.

IIB is a body floated by the insurance regulator to compile and analyse data received from insurers.

The study, which analysed data received from insurers over the past five years, found that the process of intimation of road accidents takes two years for 85% of all cases to be intimated with the insurers. In case of death, the delay is around three years. However, it requires a total of nine years for all the cases to be intimated with authorities.

On the claims payment front, insurers take four years to settle 85% of the claims received for injuries and five years in case of death. To settle all the cases, insurers take about nine years. Insurers also require around five years to settle 85% of the claims from the time of accident to payment of claims. In case of death, insurers take six years to settle 90% of the case. The study also mentioned that in the case of death claims under private car portfolio, the delay between intimation to payment is high in the time lag interval between nine months and three years. High-time lags were observed between nine months and four years from loss to payment.

“Accident victims are often unaware that they can file claims under third-party cover. Under the Motor Vehicles Act, a victim can file his/her claims even 10 years after the event. This at times results in victims filing claims after a couple of years. Each of these claims is processed by the Motor Accident Tribunal, a quasi-judicial body which rules on every case, and so, is over burdened with the number of cases,” a senior insurance official said on condition of anonymity.

The government is planning to amend the Motor Vehicles Act and doing away with the option of filing claims whenever possible – even after 10-15 years. The amended bill proposes to introduce a maximum time frame of three years for filing a claim with the tribunal.