Auto insurance: How to claim car insurance in case your car catches fire
12 Mar 2019
Accidents are accidental in nature and there have been several incidences of cars catching fire while parked or even while plying on the roads.
What if the documents related to your car such as registration papers and insurance policy gets damaged or burnt?
The Aero Show 2019 in Bengaluru witnessed an unfortunate fire incident where several cars were damaged by the raging fire. The only solace at such a time could be the fact that the car is insured. In such an event, having an auto insurance comes handy. “For the fire claims, typically insurers wait for 1-2 months for RC cancellation, while the same can be settled on the basis of RC cancellation application copy itself. Also, in case of fire due to public event (like Bangalore Aero show), we don’t go for investigation. These two efficiencies reduces the time of settlement and makes it convenient for the car owners,” says Animesh Das, Head of Product Strategy, ACKO General Insurance.
The insurance companies are getting intimation and have started processing the claims. “Within four days of the incident, the claim process was completed and all throughout, we have been with the customer, guiding them through the required steps. To speed action the claims in these times, our team went along with the customer to the incident spot and through video calling the concerned team resolved the inspection, informs Ajitpal Jandoo, Technical Head Network, Digit Insurance.
Accidents are accidental in nature and there have been several incidences of cars catching fire while parked or even while plying on the roads. “Fire is covered in a Motor Private Car Insurance Policy and even damages due to fire occurring as a result of incidents such as an explosion, self-ignition, lightening, malicious act are covered,” informs Anup Rau, CEO of Edelweiss General Insurance.
But, at times, car owners installs add-on and other gadgets by modifying car specification. “If there are changes in the absolute specifications or values which has caused fire, then the claim will not be admitted, says Abhijit Mudholkar, Head Motor Claims, SBI General Insurance. Preferably, get them installed from a branded or authorised showrooms. And, you may even get them insured. “You can add the cost of accessories both electrical and non-electrical to the IDV to complete coverage. So the sum insured under the policy will be a IDV + Cost of Accessories, says Rau.
So, when it comes to managing claims for a car damaged in a fire incident, here are some important things to keep note of.
Partial loss vs total loss
One needs to have insured the car through a comprehensive policy and not just a third-party cover. The amount of coverage depends on the Insured’s Declared Value (IDV) and is a fixed amount for each car.
In case of a car fire, the claim amount will depend on whether its a Partial Loss or a Total Loss. If the cost of repair of the car is less than 75 per cent of the IDV, its considered as Partial Loss, else it will be taken up as Total Loss. “This assessment will be done by IRDAI licensed surveyor,” says Shreeraj Deshpande, Principal Officer and CEO (Officiating), Future Generali India Insurance.
For example, what if a car worth Rs 12 lakh gets damaged in a fire. “If repair cost, after deducting depreciation, exceeds Rs 9 lakh which is more than75 per cent of IDV, the net amount payable to the insured would be Rs. 12 lakh less compulsory deductible as per the Policy schedule, informs Mudholkar.
In case of financed car
At times, you may be running a financed car and still paying the car loan EMIs on it. In such a case, when the loan outstanding is still there and the car gets managed in a fire, you need to intimate the financier and also the RTO. Also, the payment of claim will differ depending on whether its a Partial Loss or a Total Loss. In case of the Total Loss Mudholkar says, “The payment is made to the financier for an amount equivalent to loan outstanding and the remaining amount is paid to insured after receipt of NOC and Form 35 from the financier.” However, in case of Partial Loss, “ The payment is not made to financier in repair claims because insured has got the vehicle repaired to road worthy condition and so the claim amount is reimbursed, adds Mudholkar.
Car papers burnt
In case, the documents related to your car such as registration papers and insurance policy gets damaged or burnt, there is no need to worry. “Insured need to make a complaint to police mentioning the loss of said documents in the fire. This will help insured to get a duplicate Registration certificate. However, this will not stop claim processing from insurance company side. The insurance company will have policy details in its database. Also nowadays all registration details can be verified in Vahan website,” says Deshpande.
Intimating the insurance company should be your first step. “Insurance company will appoint surveyor for inspection and loss assessment. Surveyor will identify the vehicle either as a total loss or partial loss. Insured has to provide Claim Form, RC copy and NEFT details for claims processing,” says Deshpande.
Remember, the claim amount will depend on the IDV which in turn is based primarily on the age of the car. For a car with old registration number, the IDV will be less than the one which is recently registered. This will matter when the car owner goes to buy a new car with insurance claim money.
“If the customer has a ‘Return to invoice’ add-on cover, then even better as they would get the Ex-showroom value or the Invoice Value of the car, which in a way means, you can almost buy the same car all anew,” says Jandoo.