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IRDA’s new circular tackles common claim related concerns of policyholders 
My friend, Shivam, missed renewing his car insurance policy because the insurer did not remind him on time about the renewal due date. When he found out that his policy had lapsed, he renewed it but after facing the hassles of getting a car inspection done and losing out on the accumulated no-claim bonus, as it was more than 90 days of lapsation.
The problem Shivam faced is a very common one. Lack of communication from the insurer’s end has often resulted in lapse of policies and other inconveniences faced by consumers. This has prompted the insurance regulator, IRDA, to put specific guidelines in place for insurers to follow. 
IRDAI Guidelines for the benefit of the policyholders:
Contact Details:
According to the prescribed IRDAI guidelines, the insurance company is required to collect the phone number and email id of the policyholder when the policy is bought and also update the same in the course of the policy. These details are voluntary on the part of the policyholder, but if the details have been furnished, the company needs to keep it safe and confidential, so that there is no possible misuse of the same. 
There might be a situation when the customer is not willing to provide his personal details. In that case, the company has to provide proof that it tried to collect the customer’s contact information but the same was not furnished by the customer.
Proper Communication:
Besides collecting the customer’s contact information, the insurance company should send clear communication to policyholders when the policy is bought like: 

  • The status of the proposal needs to be informed to the policyholder through any means of communication means like a letter, SMS, email, etc. 
  • The issuance of the insurance policy might take some time due to additional formalities being completed. This also needs to be informed.
  • During this period the customer would remain uninsured and the insurance company should keep the customer informed about the various stages of processing of the insurance proposal till the time the policy is issued.

Increase Insurance Awareness:
The IRDAI, in its guidelines, also encouraged the insurance companies to increase the awareness of insurance and its timely renewal among their customers. As such, the insurance companies are required to send periodic messages to their customers. These messages should aim to increase awareness and also to caution the customers about fraudulent insurance related calls.
Claim Timelines:
When we talk about claims, there are some timelines for claim processing when a claim is intimated. The survey should be started within 48 hours of the appointment of the surveyor. The interim report about the loss suffered should be communicated to the insurer within 15 days from the date of the first survey and the final report should be submitted within 30 days of the appointment of the surveyor. In case of commercial or large risks, the time limit is increased to 90 days. 
However, these guidelines are seldom met and there is a need to make them strict. 
IRDA has, therefore, laid specific guidelines about clear communication channels at the time of claims. Claim settlements are often fraught with confusions and lack of knowledge and so insurers would be required to make the process as simpler and quicker as possible. Once the claim has been intimated, the insurance company should keep the claimant informed about the status of their claim at every step of the settlement process till the claim is settled.
Furthermore, as soon as the customer makes a claim, the company should create a unique claim reference number and forward the number to the claimant through a SMS or email sent to the registered mobile number and/or the email id of the customer. 
Queries and further documents for Claim Settlement:
There might be formalities which are required to be done by the claimant in the claim settlement process like submission of specific additional documents, furnishing the payment details for the claim amount, etc. The requirement of such formalities should be notified to the claimant in a timely manner through a proper notification. Even if the claimant’s claim is accepted or rejected, the claimant should be informed about the status of his claim in a timely manner.
The status notification of the claim which is sent to the claimant should contain the unique claim reference number and a tracking link which would enable the customer to track the status of his claim virtually through the website or application of the insurance company or through any other electronic platforms.
Policyholder’s consent for cross-sale of products:
Before sending any notification to the customer about the services offered by the insurance company, the company should seek the customer’s consent. Even if the consent is availed, the insurance company would not be allowed to send any unsolicited messages or notifications to the customer.
IRDAI, through the new guidelines, aims to create clear channels of communications between the insurance company and the policyholder. This clear communication would help you know the important dates of your policy and also get your claims settled easily as you would be aware of your claims status during the settlement process. Once the insurance companies adopt these guidelines, the insurance products would become more transparent and the claim settlement process would also be eased. 
My friend Shivam found comfort in the fact that, in future he would never miss his renewal date as he would get regular and clear communications from the insurance company about his policy status. Moreover, the guidelines laid down by the IRDAI would also strengthen the post-sales process of all insurance products and claim settlements would become easier.