Fw: [Adjusters:10645] Air compressor failure under MBD policy,
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Subodh R. Raje
Oct 9, 2010, 2:33:09 AM10/9/10
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Dear Mr. Prasad,
Being a keen follower of the IRDA site since long time, every year they would post various changes, amendments, etc made by TAC in tweaking the policy wordings so as to decrease the ambiguity in the wordings. Mr. Anthony has quoted the circular issued by TAC in 2003.
IRDA has stopped showing these circulars as TAC site has been removed from IRDA link.
You can however still visit the site : http://www.tac.org.in/ecir2003.html#e6 to view this circular.
As understood by us, any amendments made by the TAC are mandatory to be followed irrespective of whether they have been mentioned in the policy or not.
I would like to bring to notice the amended wording in engineering policies issued in 2001 by TAC especially in EEI policy wherein basis of indemnity has a point no. c introduced for obsolete equipments.
Mostly nobody mentions this point in the policy as Insurers would be at tremendous loss if strictly followed.
I am quoting the same verbatim from the policy:
Quote
c)��� In cases where the Insured item is subjected to total loss and meanwhile it becomes obsolete, all costs necessary to replace the lost or damaged insured item with a follow-up model (similar type) of similar structure/ configuration (of� similar quality) ie low, average or high capacity � will be reimbursed.�
Unquote
This line definitely means that enhancement factor should not be considered and insured be allowed to replace old item with new provided it is proved that the old item is "obsolete".
Onward for more discussion.
Regards
Subodh Raje
Baroda
-------- Original Message --------
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Being a keen follower of the IRDA site since long time, every year they would post various changes, amendments, etc made by TAC in tweaking the policy wordings so as to decrease the ambiguity in the wordings. Mr. Anthony has quoted the circular issued by TAC in 2003.
IRDA has stopped showing these circulars as TAC site has been removed from IRDA link.
You can however still visit the site : http://www.tac.org.in/ecir2003.html#e6 to view this circular.
As understood by us, any amendments made by the TAC are mandatory to be followed irrespective of whether they have been mentioned in the policy or not.
I would like to bring to notice the amended wording in engineering policies issued in 2001 by TAC especially in EEI policy wherein basis of indemnity has a point no. c introduced for obsolete equipments.
Mostly nobody mentions this point in the policy as Insurers would be at tremendous loss if strictly followed.
I am quoting the same verbatim from the policy:
Quote
c)��� In cases where the Insured item is subjected to total loss and meanwhile it becomes obsolete, all costs necessary to replace the lost or damaged insured item with a follow-up model (similar type) of similar structure/ configuration (of� similar quality) ie low, average or high capacity � will be reimbursed.�
Unquote
This line definitely means that enhancement factor should not be considered and insured be allowed to replace old item with new provided it is proved that the old item is "obsolete".
Onward for more discussion.
Regards
Subodh Raje
Baroda
-------- Original Message --------
| Subject: | Re: Fw: [Adjusters:10645] Air compressor failure under MBD policy, |
|---|---|
| Date: | Wed, 06 Oct 2010 12:02:48 +0530 |
| From: | SAI PRASAD NANDURI <nsp_p...@in.com> |
| Reply-To: | insurance...@googlegroups.com |
| To: | rkpanc...@yahoo.co.in; insurance...@googlegroups.com |
Dear sir,
The subject circular is issued by whom? Please note that cognisance should be taken of the policy documents as issued to and held by the insured as it forms the basis of the contract of insurance.
Sai Prasad
---------- Original message ----------
From:"Rajnikant panchal"< rkpanc...@yahoo.co.in >
Date: 5 Oct 10 12:49:04
Subject: Fw: [Adjusters:10639] Air compressor failure under MBD policy,
To: insurance...@googlegroups.com
Dear ASAR'Noted and recordedThnaks & RegardsR.K.PanchalAbu Road
----- Forwarded Message ----
From: ASAR <asant...@gmail.com>
To: insurance...@googlegroups.com
Sent: Mon, 4 October, 2010 9:29:35 AM
Subject: [Adjusters:10635] Air compressor failure under MBD policy,
Mr. Bhatia has well explained the criteria of depreciation and we need not to explain it further. On the other hand the Surveyor should follow the terms/conditions/stipulation/policy wording. When the additional excess clause is meant to apply only for DG crank shafts you have to follow it. We can not bypass the terms/conditions as agreed between the two stake holders i.e. the Insured and Insurers even if we find any anomaly in it.
What Mr. Bhatia has mentioned about irrational procedure to apply fixed rate of depreciation needs to be discussed at length. The example he has quoted is portraying the worst scenario. Why a cable bearing useful life of 50 years would be subjected to 50% depreciation per Annam. If the practice is irrational we should agitate it to proper forum. For example during the era of reformulating the cotton ginning & pressing factories warranties I fully participated in the activities and delivered lectures to Pakistan cotton Ginner Association and submitting presentation to Insurance Association of Pakistan. Most of my recommendations were incorporated in new set of cotton warranties. Still I think it needs to be revisited and for that purpose I have written to IAP many times.
It is difficult to digest that how the bumper of a motor car or any similar plastic/rubber part can be treated as having 2 years of useful life. Here in Pakistan we do not follow this procedure. Here equal rate of depreciation i.e. 10% per Annam is applied on rubber and steel parts except tires & batteries where we apply 50% depreciation per annum. It is not perfect method however but you can consider it close to rational.
you have a very strong platform in shape of IIISLA which can be used to revisit the whole issue. It is quite unfortunate that the Surveyors are not invited to sit down in discussions held at Insurance Associations and Regulatory bodies to revisit the policy wordings, terms/conditions, warranties etc. I think all the stake holders should sit together to resolve the issues including Insured, Insurers, Surveyors, regulating body & representative of concerned Ministry.
Thanks!
Qayyum Malik (Pakistan)
On Sun, Oct 3, 2010 at 2:29 PM, Rajnikant panchal <rkpanc...@yahoo.co.in> wrote:
Dear ASARThe nature of parts listed in Special exclusion No.-02 under MBD plocy ,The packing material not covered unless loss or damages to the subject machine is indemnifiable in terms of policy.exp> If any diesel engine failed due to siezing that required packing material to rebuild to prior condition, I in opinion ,same to be covered. The packing material may of metal or rubber nature.R.K.Panchal
From: ASAR <asant...@gmail.com> Sent: Sun, 3 October, 2010 1:31:50 PM
Subject: Re: Fw: [Adjusters:10630] Re: Air compressor failure under MBD policy,
Your inquiry on crank shaft is right as compared to Diesel Engine. Doctrine of Depreciation is in fact applied under the fundamental principle of indemnity. You shall see the policies where the depreication is standardised like in Motor Policy and even in MBD policy of DG sets on certain parts. Thus in case of Air compressor also cranck shaft depreiation should be seen with fundamental principle of indemnity if it is not defined specifically in the policy. Let us also see the difference in usage of two crank shafts of engine and Air compressors. Air compressor are fitted with auto switch valves by which compressor switches off automatically when the highest air pressure in reservoir is achieved. But in case of DG set the engine does not stop in no load conditions. Similarly a generator engine is subjected to fluctuating loads and even overloads, but compressor runs on steady load with no chance of overload. Thus compressors are not subjected to wear as the DG sets are. I thus opine that crank shafts of compressors should be taken not as that of DG set engine. But in practice, which has always been favouring insurance company, surveyors are following the practice of depreciation which is highest possible. I may quote an example that plastic and rubber parts in MBD policy are depreciated by surveyors at 50% depreciation like one in motor policies. I have come across a report where armoured under ground cable is depreicated @50% where as the life of such cables is not less than 50 years or even more.
I am thus of the opinion that compressor crank shaft is not at par with DG set engine and it should be considered like part without depreciation and not limited life part. The statiscal data shall prove that crank shaft life is as much as that of the compressor.
Member's views are welcome.
C K BHATIA
On Sat, Oct 2, 2010 at 10:05 PM, Rajnikant panchal <rkpanc...@yahoo.co.in> wrote:
Dear Malikji' Bhaitiaji, HemantjiThanks for giving guidlines in this regards,There is wording in Tariff for additional excess as" For Claim on Diesel Generating sets necessiating replacement of crank shaft ,20%of cost of crank shaft replacement will be born by the insured in addition to Excess slipulated above"But Crank shaft of Both Engine OR Reciprocating compressor are same in nature, working, and function wise then why not in Compressor, of course both are diffrent by strainght/metelergy wise.The fast wear & tear parts like PISTON, PISTON RINGS, VALVE & VALVE SEAT , VALVE GUIDE,BEARINGS [SHELL OR BALL OR ROLLER TYPE], CYLINDER LINERS, ANY TYPES OF BUSHES, etc. must attract with calculative depreciation [that may according life and depend on type of machine] ,For this Policy says :-"No deduction shall be made for depreciation in respect of parts replaced except for [i]Wear & tear parts ,[ii]-Parts for which manufacturers have specified a fixed life for use and the like but the value of any salvage will be taken into account".The MBD policies in india issued on the basis of present market replacement value only.ThanksR.K.PanchalEx-Cummins and Greaves Servic engineer,Abu Road [Rajasthan]
----- Forwarded Message ----
From: qpmalik <jqm...@gmail.com>
To: Insurance Adjusters <insurance...@googlegroups.com>
Sent: Sat, 2 October, 2010 2:51:39 AM
Subject: [Adjusters:10626] Re: Air compressor failure under MBD policy,
Dear brother
The additional access clause wording would solve the issue. It seems
it is only applicable to "Generator set" and not to any other
machinery.
In my opinion the easiest way to assess and adjust the loss in such
type of claims is assessing the prevailing market value of the same
type/capacity/make/model of air compressor and allow the same without
deducting any depreciation. However if the prevailing market value is
not adequately insured by the Policy you may apply average clause.
This is done if the air compressor is declared as C.T.L. Value of
salvage will however be deducted according to the prevailing practice.
This is how you may proceed in case the loss is to be determined on
"indemnity basis".
If the compressor is repairable then the loss will be assessed on
repair cost basis. Allow the replacement value of new parts plus cost
of labor. In MBD policies the depreciation is not applicable in case
of a partial loss. Average clause will however be applied according to
the prevailing practice. Salvage of replaced parts will also be
considered.
Usually the MBD Policies are issued on "reinstatement basis. So if you
think so and the sum insured is fixed by insured on the same basis and
the Insured have given their consent to settle the claim on
reinstatement basis then the procedure will be different.
Thanks
Qayyum Malik (Pakistan)
On Sep 30, 12:18 am, Rajnikant panchal <rkpanchal...@yahoo.co.in>
wrote:
> Dear Friends'
> I undergoing for one of Air compressor failure survey under MBD policy , Please
> advise on followings :-
>
> [01] There is additional excess @20% mentioned for CRANK SHAFT REPLACEMNT in
> DIESEL GENERATOR SET , Will same condition apply in case of AIR COMPRESSOR
> CRANK SHAFT.
>
> AIR COMPRESSOR PARTICULARS
> Make :- Chicago Pneumatic
> Model :- 1 HX 118
> Yr of Mfg :- 1997,
>
> We came to know that such Vertical -reciprocating type compressor not being
> under production now by any reputed manufacturers [Like CP, Ingersoll rand,
> Elgi, etc] , they are mostly producing screw type compressors as same gives
> economical output with lower Driving power.
>
> [02] In case , If such Air compressor are not being manufactured , then which
> model to be considered against similar type & capacity to fulfill Average clause
> calculation,
>
> Thanks and regards
>
> R.K.Panchal
> Abu Road [Raj]
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Subodh R. Raje
Oct 9, 2010, 3:14:57 AM10/9/10
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