Wonderful thread Mudhan. I always had this query on insurance - but couldnt find answer to it.
Let us assume 2 vehicles V1 & V2 both of which have comprehensive insurance cover met with an accident and upon investigation it was concluded that fault is completely because of V2. In this scenario will V2's insurance company pay for damages of both cars or respective insurance companies pay for their customers? As far as I know claim has to be made by vehicle owners with their own insurance providers. Is my understanding correct ?
I know for sure that in countries like US, insurance company of vehicle under fault will pay for damages of both the vehicles. The main issue here is NCB. V1 would loose his NCB for no fault of his. Insurance companies also would suffer losses for no fault of their customer right i.e., why should V1's insurer shell out on the insurance claim if it is because of V2's fault.
Mods: If above query is not relevant in this thread, please excuse and merge it with appropriate thread.
Thanks for your loving words and enquiry about ALBUS. You made me happy.
Thanks for your appreciation. I understand your question. Theoretically what you questioned may be correct. But, practically when one utilizes the services/ benefits of his/her Insurance company, he has to lose the NCB.
If he doesn’t want to lose his NCB, there is another option available. He has every right to sue against the car owner who is at fault and recover the loss through MACT under third party property damage. But in India, it is a long drawn process, you know it.
CLAIMS & CAUTION: THEFT AND WASHED AWAY VEHICLES DURING FLOOD
Stealing goods by heartless people from homes at times after the residents had to abandon their houses in the flood-ravaged city, though painful but not uncommon.
Cars and two wheelers that are washed away by floods are not exceptions. Such untraceable vehicles can be claimed as total loss from insurance company after lodging a complaint with police and on production of non-traceable certificate by the insured / vehicle owner under package policy.
Before we understand the various claim procedures adopted by insurance companies while settling a VEHICLE CLAIM,
A word of caution to the second hand car buyers:
Cars claimed as lost by theft or washed away and untraceable are considered as total loss. On such losses, in case of theft the data of the vehicles will be available on line at:
And, in case of other total losses where wreck was surrounded to the insurance company, the insured has to surrender the vehicle’s keys and RC book to the RTO before getting the claim from insurance company. By an application and paying the nominal fees, we can seek for the data from RTO.
In case of buying a second hand vehicle, it is better to check these data as to ensure that we are not buying a stolen vehicle.
UNDER WATER- AFTER EFFECT: CAUTION WHILE BUYING PRE OWNED CARS & SECOND HAND SPARES
We just discussed about buying a car that was claimed as lost!
But, I would share with you an article in a local daily & an online site that I read, about the extreme caution one should exercise while buying a PRE OWNED CAR after such flood.
BEWARE OF FLOOD-DAMAGED CARS
Buying a used car is a big investment. A little vigilance up front about flood-damaged vehicles can save you from a big headache down the road.
Flood damage can ruin a vehicle in any number of ways, from eating away the electronics wiring to seizing up mechanical systems, and the damage may not reveal itself for months or even years. Corrosion and rust are insidious, often eating away at sheet metal and components from the inside out.
Depending on whether the seller is a licensed dealer or a private owner, duped buyers may have some legal recourse if, after purchase, their used car turns out to be flood damaged, but that's not guaranteed. Avoiding a flood-damaged vehicle ultimately falls to the used-car shopper, and the most effective way to avoid being scammed is to be alert to the danger and look for a few telltale signs.
What to Look For
Although you won't be able to peek into every nook and cranny, there are some areas where obvious signs of damage lurk. Here are a few places to inspect and what to look for:
*Check under the vehicle's carpets or floor covering for mud or rust, and don't forget the trunk.
*Give the underside of the carpets a sniff test. Do they smell like mildew?
*Mud and debris collect in hard-to-clean spaces, such as under the hood and in the trunk.
*Rust on the heads of any exposed screws under the hood, around the doors or in the trunk indicates exposure to excess moisture.
*Mud and debris on the underside of panels and brackets is another good sign the car has been under water.
“Old cars damaged in the floods are coming to Pudupet (Old auto spare market in Chennai). For spare parts of abandoned high-end cars, customers come from other parts of the country, including Mumbai and Delhi,”…
“Due to water stagnation, some of the parts could have developed rust. We have been receiving a lot of water-damaged motorcycles. Even if a car or a bike had been submerged for long, its parts could be replaced and the vehicle brought back to the roads. And it is these replaced parts that could end up in the second-hand spares shops, that one should be careful about,” ….
Your sense of timing is immaculate. The need of the hour is sensible information without convolution and truly this thread of your provides it. I'm sure this will be of invaluable assistance to everyone not just the people of Chennai.
Let us understand the various claim settlement procedures adopted by insurance companies while settling a VEHICLE CLAIM:
Insurance Companies indemnify the loss of the Customer / Insured by resorting to any one of these methods based on the quantum of damages.
REPAIR LOSS BASIS:
TOTAL LOSS BASIS:
CONSTRUCTIVE TOTAL LOSS BASIS:
CASH LOSS BASIS:
REPAIR LOSS BASIS:
Settlement for minor to medium damages on partial loss basis
Net Liability = Labour charges + Parts allowed at different rates of depreciation
– (Minus) Policy Excess & Salvage value
Depreciation on Parts for Partial Loss Claims
The following rates of depreciation shall apply for replacement of parts for partial
loss claims in respect of all categories of vehicles / accessories.
1. Rate of depreciation for all rubber nylon/ plastic parts, tyres and tubes, batteries and air bags-50%
2 Rate of depreciation for all fibre glass components-30%
3. Rate of depreciation for all parts made of glass-Nil
4. Rate of depreciation for all other parts including wooden parts is to be asper the following schedule:
AGE OF THE VEHICLE % OF DEPRECIATION
Not exceeding 6 months Nil
Exceeding 6 months but not exceeding 1 year 5%
Exceeding 1 year but not exceeding 2 years 10%
Exceeding 2 years but not exceeding 3 years 15%
Exceeding 3 years but not exceeding 4 years 25%
Exceeding 4 years but not exceeding 5 years 35%
Exceeding 5 years but not exceeding 10 years 40%
Exceeding 10 years 50%
Settlement for heavy damages when repair becomes uneconomical.
Wreck/Salvage is taken over by the insurer and the Market Value/IDV(Whichever is lower)-Policy excess is paid to the insured
RC book is collected from the insured and wreck is disposed off with/ without RC
Theft of the entire vehicle is also total loss.
CONSTRUCTIVE TOTAL LOSS:
Generally resorted to when the aggregate cost of repairs and the retrieval exceeds 75% of the IDV
Liability is worked out as under:
Market value/IDV(whichever is lower)-wreck value-Policy excess
Salvage is left with the insured at his disposal
Policy is cancelled from the Date of loss
CASH LOSS BASIS
This mode is resorted in Generally in respect of Commercial vehicle where the insured is unable to finance and carry out the repairs and replacement of parts and furnish Bills
In such cases, The assessment is fixed at 70%-75% of the net assessed loss(Tax not allowed)
Policy is cancelled from the Date of loss
Insurance companies generally pay the loss directly to the insured on production of the original bills with a satisfaction note on works carried out. Some companies have CASH LESS facility like Health Insurance policy, where in the customer only has to bear the loss in case of depreciations and other expenses not relevant to the accidents, provided if the repairs are carried out by their approved, networked auto garages.
While choosing a policy from a company, carefully note how much compulsory excess that one has to bear in each and every claim – whether or not nil depreciation policy.
I would share here one interesting article that I noticed in newspaper – The Times of India, Chennai dated 06/01/2016.
A PORSCHE FOR `5 LAKH AND A BMW FOR `8 LAKH!
These are not festive-season down payments for these luxury cars but their base prices in an online auction. With motor insurance claims being settled, cars affected in the Chennai floods, ranging from the entry-level to the luxury segments, are being auctioned off at prices as low as a tenth of their
On Wednesday , copart.in, an online auctioneer that has more than 100 flood-affected cars at its yard in Sriperumbudur, will conduct an auction. The US-based auctioneer is receiving requests from insurance companies, individuals, bankers and dealers who want to sell their cars on an as-is when-is basis.
"Models as new as from 2015 and 2014 are out for auction. We will merely auction the cars and the documents. We don't hold any responsibility for the condition of the car," Copart MD Rajeev Kapoor said.
For Wednesday's auction, the price of BMW 3 series starts at `6 lakh, a 2015 Audi A4 is available at `3.4 lakh, and a Porsche Cayenne (2012 model) is available at `5 lakh.
For the past week, the portal has received 10 cars per day. With 108 cars available and more expected to come in as claims are being settled, the portal would con duct weekly auctions until all the cars are sold out.
Interested buyers from across the south have registered on the website after paying a refundable security deposit.
"We expect the auctions to go on for three months. There have been more registrations than expected," Kapoor said.
Buyers take a chance and buy the cars not for the drive quality but for some components which can be taken out and sold.
"Spare parts of select luxury cars are not sold separately by dealers. We need some electrical fuses and systems for a BMW and we will see if we can get that," a registered bidder told TOI.
Another auction portal Select Auto Mart has close to 10,000 flood-affected cars put out for sale by insurers from Chennai attracting buyers from across Mumbai, Gujarat, Delhi and Punjab."
Close to 5,000 cars have been auctioned in 20 days. Vehicles have started coming in 10 days after the floods and both individuals as well as scrap dealers have e x pressed interest and bought cars," said an official who expects the auctions to continue till January-end.
It is a painful fact that motor vehicle accident causes nearly 14 deaths every hour in India and 70% of the two wheelers and almost 49 % of the four wheelers are uninsured in our country and all those risks like loss or damage to the vehicle and causing un expected third party death or damage by using such vehicle on public road becomes the sole responsibility of the owners themselves.
This is really sad to hear. And this remembers me of a situation in my office while I was renewing insurance. My colleague saw that and said to me that he never took insurance after the 1st year. He is holding the car for 5 years now. I was shocked and questioned him why he has not took. His answer gave me further shock. He said that he is a very good driver and he has very good confidence in his driving and thats why his car doesn't need insurance. Only the drivers not sure of their driving capability needs insurance. Thats all.. I never said a word after. I wonder how people think as such..