An insurance claims is expected to be filed as quickly as possible. But, what happens when there is a delay? Read on to find out…
Earlier this year, the honourable Supreme Court of India passed a historic judgement for the insurance industry. A case which had been going on since 2010 was contested in the apex court. The case was between the owner of a truck and a general insurance firm, in which the truck was stolen and the owner had notified the insurer later than the period specified for intimation.
The insurer refused the claim on technical grounds stating that the insured had delayed informing them about the incident, and not immediately, as it was supposed to be done. The matter was brought before the Supreme Court which ruled that it was not fair on the part of the insurance company to reject the claim solely on the grounds of ‘delay in claim filing’.
In this particular case, the delay was genuine as the owner first started searching for his stolen vehicle, and when he was unable to find it, the insurance company was informed. It is observed globally though, that the percentage of fraudulent cases are more in delayed claims.
Why do Delays Happen?
Most insurers prefer that the claims are notified to them as soon as an incident happens. But, it has been observed that most customers are not aware of the timeline that needs to be adhered to for filing a claim.
Why does this happen? According to experts, this situation arise because this pertinent information is not communicated clearly at the time of sale. motor insurance typically has a window of a week, but it varies, so it is always better to call up and check with the insurer. Other than this, there are many other reasons that can crop up for delays owing to unavoidable circumstances.
Issues with Late Filings
When a claim is filed late, there are several problems that can come up. Firstly, the insurer would be unable to properly assess the damage done, as they may not be able to contact any witnesses or third party involved owing to the passage of time. Secondly, if the deadline is not followed, then the insurers won’t be able to gauge their liabilities and make sufficient provisions for it.
We will take an example to illustrate the problem that can arise with late claim filing. Suppose your vehicle was involved in an accident a long time ago, the insurer may not be able to determine the cause of damage arising from that particular incident.
The reason being that it is not able to find the third party and hence, cannot verify the veracity of your claim. This can directly affect you in the form of a reduced payout or a denial of claim altogether.
From the above we understand is that, it is in the best interest of both the insurer and the insured that the claim is taken care of on time. Undue and unwarranted delays can cause problems to both, thus giving rise to ever escalating disputes.
Related Article:
Five Reasons Why Car Insurance Claims Get Rejected
How to Make a Car Insurance Claim