Claims are estimated based on the:
- Terms decided at the beginning of the policy
- The type of policy
- The type of asset insured
- The Assessors Report
All claim payments under general insurance policies will also account for applicable deductible and co-payment clauses before paying the claim amount.
Here is how claim is estimated in different general insurance policies:
A Case to Understand Claim Estimation in General Insurance
Bharti Jain is a reputed builder and is currently involved in a personal construction project of one of his relatives Jatin Ahuja. As per his standard practice, he advised Jatin to insure this building to save himself from expenses of reconstruction if the building is damaged due to a natural cause.
While the building was near completion, with only finishing and paint work pending, heavy hailstorm struck the city, and the building’s structure got damaged. Total damage assessed by the insurer was about Rs. 27,000 which was paid without any deductions since the building was under construction at the time of loss.
Mrs. Sarath has a 1400CC car which got damaged when it collided with another vehicle breaking suddenly on a busy highway. After all consideration, it was estimated as an accident with no fault of the vehicles as there was an animal on the road. Her car is 3 years old, and insured total repair cost was Rs. 15,000, out of which insurer reimbursed Rs. 8400 after depreciation. (Compulsory deductible applicable for vehicles less than 1500CC is Rs. 1000).
Shubhendu Das Gupta is a garment exporter, usually sending fashion garments across Europe and America. Last month he sent goods worth Rs. 15,00,000 with Rs. 12,000 for insurance and Rs. 18,000 for freight transport to a London port. Goods worth Rs. 500,000 were damaged or destroyed by a fire on the ship, which was caused by a lightning strike in the sea. Since none of these goods could be restored, the insurer paid 110% of the proportional CIF value for the damaged and lost consignment; i.e. Rs. 561,000.
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