Top Life Insurance Companies in India with Claim Settlement Ration

On February 15, 2022, the Ministry of Road Transport and Highways issued the latest amendments to the Central Motor Vehicles Act Rules, 1989. These amendments aim to enhance safety measures for road transport. They are effective from 1st April 2022.

What are the amendments to the Motor Act?

There have been 2 recent amendments to the motor vehicles act. One was in 2019 and the latest in 2022. Both deal with third-party insurance and claims management, including filing claims with the Motor Accident Claims Tribunal.

Additional Read: Should I buy third-party car insurance or a comprehensive cover?

The new amendments in the motor act include the following:

• The provisions pertaining to interim compensation awarded in lieu of “no-fault liability” have been eliminated. Interim compensation will no longer payable for accident claims involving motor vehicles. The “no-fault liability” compensation is set at Rs. 5 lakh for death and Rs. 2.5 lakh for grievous injury. Also, it is no longer required to prove the negligence of the driver.

• Sections 145 to 164 of the Motor Vehicle Act, 1988 have been amended. The changes are:

1. A designated officer will come to oversee the accident information from either the claimant or the Accident Information Report (AIR); or any other credible sources to ensure the authenticity and appropriate valuation of the claim.
2. The designated officer from the insurance company will make the settlement offer to the claimant with the approval of the claims tribunal within 30 days. This is as prescribed in the Central Motor Vehicles Rules.
3. Upon acceptance of the offer, the officer will record the settlement and award the amount through the concerned insurance company within a 30-day timeframe from the date of recording the settlement.
4. However, upon rejection of the settlement offer, the claims tribunal will fix a date of hearing to ascertain and establish the claims on merits.
5. The Insurance company has to make a fair settlement against the claims as raised by the insured. This is unless there is no active third-party liability insurance plan for which a premium has been duly paid on time to provide coverage, or unless the owner was driving under the influence of alcohol or drugs;
6. The insurer will settle the insurance claim even upon the death of the life insured; the death of the insured or policyholder will not be an impediment to the settlement of a claim in favour of the beneficiary.
7. For settlement of an accident claim documents required include driving license, certificates of insurance; registration, pollution control,  fitness, permit etc. The onus of documentation lies with the driver of the vehicle or the claimant to produce these to a qualified and authorised police officer.

Additional Changes:

1. If the driver and the owner are different parties, the owner needs to ensure that the documentation happens in the most appropriate manner.
2. The compensation for hit-and-run motor accidents has moved up from a mere Rs. 25,000 to Rs. 2 Lakh in the event of death due to an accident; for other grievous injuries, the compensation goes up from Rs. 25,000 to Rs. 50,000.
3. Insurance companies need to provide cashless treatment to victims of road accidents within the golden hour. This is the critical one hour following the traumatic accident. Tending to the injured within this hour enhances the likelihood of survival.
4. 6 months is the maximum timeframe to claim compensation for an accident.
5. The amendment also levies prohibition on appeals lower than Rs. 1 Lakh.

• Current Amendments are Extensions of the previous ones

The current amendments are extensions of the previous amendments. These lay down the procedure for quick, timely and accurate investigation and settlement of Motor Accident Claims. They aim to ensure that motor accident insurance claims are settled within a period of 6 months to a year. The Delhi High Court framed these new amendments which came into effect from April 2022.

Also, the rules offer specific timelines for action from different entities which are involved in motor accident claims :

• The police need to file the FAR (First Accident Report) before the MACT within the lapse of 48 hours from the time of the accident.

• A proper notification needs to go out to the victims about their rights within 10 days of the accident.

• The driver/owner of the offending vehicle should submit the driver’s form along with necessary documents within 30 days .

• After verifying drivers/owners, the police must submit their IAR (interim accident report) to MACT within a timeline of 50 days.

• Victims need to submit the Victim’s form to the police within 60 days of the accident.

• Also, the police need to submit the DAR (Detailed Accident Report) within 90 days of the accident to the MACT.

• Insurance companies verify the victim’s form and submit a response within 30 days

• Now, if the insurance company accepts the liability, it will offer a reasonable offer toward compensation to the claims tribunal; which will award its consent within 6 months of the accident.

• However, if the claimant rejects the offer, then the arguments for the appealed compensation will continue; which might take up to  9 months after the accident for the consent.

• The claims tribunal needs to settle all the disputes between insurance companies and claimants by conducting a fair enquiry within 12 months of the accident.

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How will these affect us?

This entire set of amendments done in 2019 and early 2022 is for a quick and procedure-based resolution of any accident claims. With the number of road accidents on the rise, it is important to address the need for timely settlement which will address the requirement. The streamlined process also ensures that there are no fraudulent claims.

There are likely to be further efforts to ensure the entire process is carried out by leveraging technology in future. Thus, it is a mandate that all vehicles on the road need to possess a third-party insurance plan.

While choosing your vehicle insurance, remember to compare across plans and choose the one that aligns with your requirement. You can check the motor vehicle insurance offerings at securenow.in and compare the features comprehensively.