According to the Insurance Regulatory and Development Authority of India (IRDAI)1, of the 65,515 non-life insurance grievances reported in 2021-22, 64,625 were resolved by the respective insurance companies, accounting for 97.44 percent of claim settlements reported.
What is Claim Settlement?
In the claim settlement, policyholders receive compensation or financial assistance from the insurance company when they experience a covered loss or damage.
Key features of claim settlement in non-life insurance include:
Filing a Claim: This usually involves filing a claim by providing relevant information, documentation, and evidence of the incident that led to the loss or damage.
Claim Investigation: This may involve site visits, interviews, document verification, and more.
Claim Evaluation: Once the investigation is complete, the insurance company evaluates the claim based on the terms and conditions of the policy.
Claim Settlement: This involves disbursing the appropriate amount of compensation to the policyholder to cover the loss or damage, minus any deductible or excess amount as specified in the policy.
Timeframe: The time taken for claim settlement can vary depending on factors such as the complexity of the claim, the accuracy and completeness of the documentation provided, and the insurance company's internal processes.
Disputes and Appeals: If there is a disagreement between the policyholder and the insurance company regarding the claim settlement amount or decision, there may be provisions for dispute resolution and appeals as outlined in the policy and local regulations.
Can a Claim Arise From 2 Insurance Policies?
Of course! This situation is known as "concurrent coverage" or "dual insurance". In this case, two separate insurance policies may cover the same loss or event, provided the insured is aware of the specific rules and guidelines related to the handling of such cases.
Health Insurance: The person can potentially submit claims to both insurance providers for the same medical expenses, which can lead to coordination of benefits.
Liability Insurance: Likewise, a liability risk like a slip-and-fall accident on a business premises could be covered by concurrent liability insurance policies.
Property Insurance: Let us suppose a business owns a commercial property and intends to insure it against fire damage. In this case, the company might decide to purchase property insurance from two different insurance companies, each providing coverage up to a certain limit.
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A Word of Caution
It's important to note that while concurrent coverage might seem advantageous as it provides the opportunity to claim from multiple insurers, there are potential complications and challenges:
Overlapping Coverage: Overlapping coverage might result in a claim being paid out more than once, exceeding the actual loss amount. This could lead to unintended financial gains for the insured party.
Coordination and Communication: Dealing with multiple insurance companies can be complex. There could be disagreements over which policy covers what portion of the loss, leading to delays in claims processing and potential disputes.
Premium Costs: Insuring the same risk with multiple policies might lead to higher premium costs for the insured since they are paying for coverage redundancy.
Insurance Fraud: There's a risk of fraudulent claims when an insured party intentionally causes or exaggerates a loss to claim from multiple policies.
In insurance as a whole, businesses or individuals might have multiple insurance policies that could cover the same incident. For instance, a business might have general liability insurance as well as a separate product liability insurance policy. If a lawsuit is filed against the business due to a defective product, both insurance policies might come into play.
Make sure you take care of the following key points:
Pro Rata Contribution: This is often referred to as a "pro rata" clause, which means that each insurance company will contribute to the claim based on the proportion of the coverage it provides.
Primary and Excess Coverage: The secondary policy, often referred to as an "excess" policy, would then cover costs beyond what the primary policy covers, up to its own limits.
Anti-Stacking Clauses: Some insurance policies may have anti-stacking clauses that prevent the insured from receiving more compensation than the actual loss incurred.
Coordination of Benefits: In situations involving health insurance, coordination of benefits (COB) rules may apply when an individual is covered by two health insurance plans.
Specific Coverage Scenarios: The handling of concurrent coverage can differ based on the type of insurance. For instance, in property insurance, such as home insurance, it's possible to have multiple policies covering the same property.
In case you need any assistance regarding claim settlement, you can approach BimaKavach. We are a direct broker and help in the claim settlement process.
In the Nutshell
As they say, precaution is the best cure, always remember how to proceed with insurance claims. Keep in mind that specific details may vary based on the type of insurance and the policies involved. Here's a summary of the typical steps you might take when claiming settlements from two insurance policies:
Review Your Policies: Understand the coverage limits, deductibles, exclusions, and claim procedures outlined in each policy document.
Inform your Insurer: In case a claim happens, inform both insurance companies as soon as possible. This usually involves calling the respective claims department or submitting a claim online through the insurer's website.
Furnish Relevant Documents: Gather all necessary documentation to support your claim. This might include incident details, photos, police reports (if applicable), medical records, receipts, and any other relevant evidence.
File the Claims: Submit the required claim forms along with the supporting documents to each insurance company. Follow their specific submission instructions.
Claim Investigation: Both insurance companies will review the submitted information and investigate the claim. This may involve contacting witnesses, reviewing documents, and assessing the extent of the damage or loss.
Assessment and Offer: These offers may cover repair costs, replacement value, medical expenses, or other relevant expenses, depending on the type of insurance and the circumstances of the claim.
Negotiation (if needed): If the initial settlement offers are not satisfactory, you may negotiate with the insurance companies to reach a fair resolution. Provide any additional evidence or information that supports your claim.
Acceptance: If you are satisfied with the settlement offers, you can accept them by signing any necessary documents and returning them to the insurance companies.
Payment: Once the settlement is agreed upon, the insurance companies will process the payment. This may be a lump sum payment or divided into installments, depending on the terms of the settlement and the policies.
Follow-Up: Keep track of the progress of both the claims and ensure that the settlement payments are received as agreed. If there are any delays or issues, contact the respective insurance companies for clarification.
Overall, each insurance company may have slightly different procedures and timelines, so it's important to follow their instructions closely. If you're not sure about any aspect of the claims process, don't hesitate to reach out to the insurance company's customer service representatives for guidance.
Disclaimer: The above information is indicative in nature. For more details on the risk factors, terms, and conditions, please refer to the Sales Brochure and Policy Wording carefully before concluding a sale.