The death of former Tata Sons chairman, Cyrus Mistry, in a road accident caused much anguish to many in India Inc. But one key reason for his death – he wasn’t wearing his seat belt in the rear seat – raised questions from an insurance perspective as to whether claims would be honoured in cases where such negligence is noticed.
This week, we also saw many areas in India’s IT capital, Bengaluru, being flooded due to very heavy rains during the monsoon. Other cities such as Mumbai, Chennai and Hyderabad have also had their fair share of flooding; consequently, cars get submerged, accidents due to skidding of vehicles and potholes cause fatalities each year.
Many motor insurance claims are made when there are instances of own damages, accident-related repairs, third-party damages and deaths. In the background of these two events, here’s what you must know about when your claims may be accepted or rejected.
The Cyrus Mistry case
Accidents can happen due to negligence or judgment errors. In Cyrus Mistry’s case, not wearing the seat belt can be deemed negligence. But the insurance claims for car damages and accidental death will be accepted by insurers. If the car owner has a comprehensive policy covering own as well as third-party damages, the insurance company would honour the claims. Not wearing a seat belt is not an exclusion for settling claims in motor insurance policies, even though Indian laws mandate wearing it. But in your own interest, it is always advisable to have your seat belt on as a car’s air bags are triggered only when the seat belt is latched on.
So, an insurer would settle death and disability claims in such cases. In case a passenger add-on rider is taken, even the co-passenger or in case of death their nominee would get insurance compensation.
Many metros have seen floods and heavy losses incurred by vehicle owners.
When roads near your workplace or residence are flooded during monsoon and you attempt to take your car out, even if only for any emergency, there are important points to note.
It may so happen that you get into a spot where there is lot of water stagnation, such that water gushes into your car or, worse, submerges the vehicle. In case of incessant rains and flooding in car parking basements at office or residence, there is a good chance of water entering your car.
This can cause considerable damage to your car. If you are stuck in such situations on the road, in office or your residential parking area, you must take the following steps to make your insurance claim process smooth.
* Do not attempt to start your car if water has entered the vehicle or it is submerged. This can cause considerable damage to the engine and may permanently damage the ignition system, piston and cylinders. There may be engine seizure.
* If you attempt to start your car when it is submerged in water, the insurance company considers it as a deliberate act and will not honour your claim for any damage.
* Inform your insurance company immediately if your car is submerged or is stuck in a flooded road or parking area.
* Usually, the insurance company will arrange for a tow vehicle to pick up the car and take it to the nearest authorised garage.
* Wait for the surveyor to arrive at the site of car damage before moving your car. Let the surveyor assess the possible losses — physical, mechanical and electrical. That way, you can be assured of having followed the due process.
* You can take photos of your submerged car in different angles to make a strong case for your claim settlement. Many insurers allow you to upload such pictures in their app while making a claim.
* Do not attempt to get your vehicle repaired at your friendly neighbourhood garage, unless it is an authorised place in your insurer’s list. Otherwise, your claims would be rejected and even reimbursements would not be given.
Precautionary add-ons for vehicle cover
For more protection to your vehicle, you can have a few riders.
* Engine protection cover: This rider covers the cause of any damage caused to your engine in case of flooding. It is advisable for you to take this cover, especially if your car is new or just a few years old. It does not cover damages due to attempted starting of the vehicle in a submerged or water-logged car. The premium would cost about 2 per cent of the current market value of the car (according to Policybazaar) and is available for cars less than five years old.
* No claim bonus (NCB) protection cover: You accumulate bonus points during years when you make no motor claims. If you take an NCB protection cover, your bonus would be retained even if you happen to make claims in a year. It would cost you 5-10 per cent of the base car insurance premium (source: Policybazaar).
* Zero depreciation cover: This rider helps you get the full-claim value for parts that are replaced after damage, instead of their depreciated value. This helps you save a tidy sum. The cost of such an add-on will cost you 15-20 per cent of your base car insurance premium (source: Coverfox).
Taking good care of your car by following these precautions and taking the requisite add-ons would save you a lot of time, effort and money.