‘Get the real value of your vehicle, read the IMT’
More power to the consumer is our motto, whether buying rajma or a watch. Pushpa Girimaji tells you how to get empowered.delhi Updated: May 30, 2010 00:13 IST
If you own a motor vehicle, I would recommend as compulsory reading the India Motor Tariff (IMT) — at least the portions relevant to you.
You can find it on the Insurance Regulatory and Development Authority (IRDA) website www.irdaindia.org (Click on the ‘Insurance Information Bureau’ icon on the left.)
The IMT will help you calculate the value of your vehicle. This value, called Insured’s Declared Value (IDV), is to be fixed on the basis of the manufacturer’s listed selling price and adjusted for depreciation as per the schedule specified in the tariff, up to five years of the age of the vehicle.
Beyond five years, the IDV will be determined on the basis of an understanding between the insured and the insurer.
Once the IDV is fixed at the commencement of the policy period, it will be treated as the market value and will not change. In other words, in case of theft of a vehicle or complete damage suffered by a vehicle, the insurer has to pay the full IDV amount. He cannot reduce it or apply further depreciation.
Under the old motor tariff regime prior to 2002, insurance companies would allow vehicle owners to estimate the cost of the vehicle and collect the premium on the basis of that estimate (it was called the Insured's Estimated Value).
However, if the vehicle were stolen or damaged and the insured made a claim, the company would come up with it’s own estimate of the market value of the vehicle and would offer to pay only that amount. This would invariably be much lower than the insured amount.
Under the revised IMT, the insurer has no option but to pay the value (IDV) fixed at the commencement of the annual policy. But even here there are complaints of insurers offering a settlement much lower than the IDV, saying that the market value had gone down.
This is a clear violation of the IMT — any breach of the tariff is a breach of the provisions of the Insurance Act. So in such cases, the insurance company would be liable for regulatory action. Whenever consumers face such situations, they would do well to lodge a complaint with the regulator.
Sunil Bansal: I purchased a car in May 2009 but it was stolen on March 7, 2010. After more than two months of continuous follow-up and completing all the formalities, the insurance company is not willing to pay my claim as per the actual IDV of the policy and is forcing me in an unfair manner to sign on a consent letter without filling the amount of IDV. The premium was paid on the amount of Rs 3,52,144. What should I do?
Answer: Send a complaint to the Insurance Regulatory and Development Authority email@example.com. (In case of PSUs, it should be sent to firstname.lastname@example.org) The IRDA should be able to sort it out quickly. I must mention here that the IRDA had recently received several complaints of such illegal practice by an insurance company and it is taking a very serious view of it.
Do you have any problems? Send in your queries to: email@example.com
First Published: May 30, 2010 00:09 IST