Aggregate cost meaning in Motor claims--------------------
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Ashok Kumar Singh.
Mar 21, 2017, 7:33:46 AM3/21/17
to Insurance surveyors
Just sharing:--
As per Indian Motor Tariff:-
IDV shall be treated as the „Market Value‟ throughout the policy period without any further depreciation for the purpose of Total Loss (TL) / Constructive Total Loss (CTL) claims.
The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.
(Aggregate cost meaning-----total sum of cost)---------in hindi----------
GR.9. 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 as per the following schedule
:
AGE OF THE VEHICLE
% OF DEPRECIATION
as---5,10,15,25,35,40,50.
Ombudsman decision:-
Case No. GI/30/ICICI Lombard/10 In the matter of Shri Amit Luthra Vs ICICI Lombard General Insurance Company Limited AWARD dated 03.12.2010 - Repudiation of motor claim
1. This is a complaint filed by Shri Amit Luthra (herein after referred to as the complainant) against the ICICI Lombard General Insurance Company Limited (herein after referred to as respondent insurance company) in respect of repudiation of motor claim.
2. The complainant stated that his vehicle Chevrolet Spark car No.DL 2C AJ-1766 met with an accident on 31.05.2009 with Innova having registration No.RJ-14 TA-1599 from front side due to rash and negligent driving of the said vehicle driven by Surender Mohan Shukla. His vehicle was being driven by Shri Shyam Sunder who was having valid license. Occupants of the vehicle were seriously injured when the car met with an accident. The insurance company was immediately intimated about the accident and motor claim form was filed No.P18240577 claiming the indemnification in the respect of the total loss sustained by the insured vehicle. The accidental vehicle was towed by Aditya Breakdown Services to the Triumph Motors from the accident site of which the charges have been paid which amounted to Rs.3198/-. The vehicle has been sent to Triumph Motors, authorized dealer of Chevrolet Spark for assessing the loss sustained in the accident.
The said repairer after scrutinizing the damages prepared the estimate at Rs.2,58,201/- which is more than 75% of the Insured Declared Value of the vehicle amounting to Rs.3,13,200/-. As per the estimate of the repairer, it was informed by the insured company that it will settle the claim as total loss basis because the vehicle has been damaged more than 75% of the IDV. It was further stated that the company had discussed, calculated and assessed the loss and it came to the conclusion that the vehicle sustained damages to the extent that it would be a as total loss and there was no need to get the vehicle repaired as it is the case of total loss and the insurance company will pay the insured declared value and retain the salvage.
He had visited several times to the office of the insurance company for issuance of survey report and the payment of the claim because the complainant was suffering from severe financial loss and problem of transportation for the last so many months. But despite several attempts made by him, the company had not settled the claim nor had given the copy of the survey report. Whenever he approached the company, he was told that the claim is under consideration and amount of the claim would be paid. It has been stated by him that the vehicle has been damaged to that extent that it would be only a case of total loss and company ought to have settled the claim only on that basis.
But the fact remains that the claim has not been settled so far. He requested this forum to direct the insurance company to make payment of IDV. He further demands award of compensation for harassment and mental pain and also cost of litigation. During the course of hearing, it was stated by him also that the vehicle was repaired though the same was not repairable by the insurance company and he had been demanded Rs.70,000/- to get the repaired vehicle. The repairing amount is stated to have been paid by the insurance company. He submitted that he had never given the consent for repair the vehicle and he is, therefore, not in a position to take the vehicle after making payment of Rs.70,000/-. He insists that since the vehicle was damaged to the extent that it could have been a case of total loss and the company be directed to pay the IDV of the vehicle.
3. No written submissions were placed on record on behalf of the company. However, representative of the company attended the hearing on 27.10.2010, 01.11.2010 and on 11.11.2010. During the course of hearing, the representative of the company was specifically required to produce the letter of consent given by the owner of the vehicle for repairing the damaged vehicle. On 11.11.2010, the representative of the company was given one week time to produce the consent letter from the owner of the vehicle for repairing the vehicle but the same was not produced. I am given to understand that the company is not in a position to produce the consent letter of the owner of the vehicle for getting the vehicle repaired. It was further stated by the representative of the company that it had already paid repairing charges to the authorized dealer and the owner of the vehicle may receive the vehicle after paying the balance amount (Rs.70,000/-).
4. I have considered the submissions of the complainant very carefully and have also considered the verbal arguments of the representative of the company. After due consideration of the matter, I hold that the insurance company was not justified in repairing the vehicle at the authorized dealer without consent of the owner of the vehicle. Since the owner of the vehicle had not given consent for repairing the damaged vehicle, the policy holder was not responsible for the repair. As is evident from the estimate of the repair by the authorized dealer, it was more than 75% of the IDV. Moreover, the vehicle was damaged to the extent that it appears to be a fit case for total loss. This fact is proved by the fact that the repair cost was estimated at Rs.2, 58,201/- which is more than 75% of the IDV. More than 200 parts of the vehicle were repaired/ replaced while repairing the vehicle. One can very well assume that the vehicle was damaged to a great extent. During the course of discussion with the owner of the vehicle, the company’s official has given the impression that the case will be settled on total loss basis and he would be compensated accordingly. One fails to understand as to how the company agreed to make the payment of repair when no consent was given by the owner of the damaged vehicle. In my considered view and in view of the fact that the cost of the repair has been estimated more than 75% of the IDV, it appears to me a fit case to take it as a total loss and compensation to the owner of the vehicle is awarded accordingly. Accordingly, award is passed with the direction to the company to make the payment of IDV to the policy holder less policy excess clause and take the possession of the vehicle. The company is further directed to make the payment of penal interest @ 8% from the date after three months of accident to the date of actual payment.
5. The Award shall be implemented within 30 days of receipt of the same. The compliance of the Award shall be intimated to my office for information and record. 6. Copies of the Award to both the parties.
With regards,
Ashok Kumar Singh.
Greater Noida, U.P..
As per Indian Motor Tariff:-
IDV shall be treated as the „Market Value‟ throughout the policy period without any further depreciation for the purpose of Total Loss (TL) / Constructive Total Loss (CTL) claims.
The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.
(Aggregate cost meaning-----total sum of cost)---------in hindi----------
GR.9. 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 as per the following schedule
:
AGE OF THE VEHICLE
% OF DEPRECIATION
as---5,10,15,25,35,40,50.
Ombudsman decision:-
Case No. GI/30/ICICI Lombard/10 In the matter of Shri Amit Luthra Vs ICICI Lombard General Insurance Company Limited AWARD dated 03.12.2010 - Repudiation of motor claim
1. This is a complaint filed by Shri Amit Luthra (herein after referred to as the complainant) against the ICICI Lombard General Insurance Company Limited (herein after referred to as respondent insurance company) in respect of repudiation of motor claim.
2. The complainant stated that his vehicle Chevrolet Spark car No.DL 2C AJ-1766 met with an accident on 31.05.2009 with Innova having registration No.RJ-14 TA-1599 from front side due to rash and negligent driving of the said vehicle driven by Surender Mohan Shukla. His vehicle was being driven by Shri Shyam Sunder who was having valid license. Occupants of the vehicle were seriously injured when the car met with an accident. The insurance company was immediately intimated about the accident and motor claim form was filed No.P18240577 claiming the indemnification in the respect of the total loss sustained by the insured vehicle. The accidental vehicle was towed by Aditya Breakdown Services to the Triumph Motors from the accident site of which the charges have been paid which amounted to Rs.3198/-. The vehicle has been sent to Triumph Motors, authorized dealer of Chevrolet Spark for assessing the loss sustained in the accident.
The said repairer after scrutinizing the damages prepared the estimate at Rs.2,58,201/- which is more than 75% of the Insured Declared Value of the vehicle amounting to Rs.3,13,200/-. As per the estimate of the repairer, it was informed by the insured company that it will settle the claim as total loss basis because the vehicle has been damaged more than 75% of the IDV. It was further stated that the company had discussed, calculated and assessed the loss and it came to the conclusion that the vehicle sustained damages to the extent that it would be a as total loss and there was no need to get the vehicle repaired as it is the case of total loss and the insurance company will pay the insured declared value and retain the salvage.
He had visited several times to the office of the insurance company for issuance of survey report and the payment of the claim because the complainant was suffering from severe financial loss and problem of transportation for the last so many months. But despite several attempts made by him, the company had not settled the claim nor had given the copy of the survey report. Whenever he approached the company, he was told that the claim is under consideration and amount of the claim would be paid. It has been stated by him that the vehicle has been damaged to that extent that it would be only a case of total loss and company ought to have settled the claim only on that basis.
But the fact remains that the claim has not been settled so far. He requested this forum to direct the insurance company to make payment of IDV. He further demands award of compensation for harassment and mental pain and also cost of litigation. During the course of hearing, it was stated by him also that the vehicle was repaired though the same was not repairable by the insurance company and he had been demanded Rs.70,000/- to get the repaired vehicle. The repairing amount is stated to have been paid by the insurance company. He submitted that he had never given the consent for repair the vehicle and he is, therefore, not in a position to take the vehicle after making payment of Rs.70,000/-. He insists that since the vehicle was damaged to the extent that it could have been a case of total loss and the company be directed to pay the IDV of the vehicle.
3. No written submissions were placed on record on behalf of the company. However, representative of the company attended the hearing on 27.10.2010, 01.11.2010 and on 11.11.2010. During the course of hearing, the representative of the company was specifically required to produce the letter of consent given by the owner of the vehicle for repairing the damaged vehicle. On 11.11.2010, the representative of the company was given one week time to produce the consent letter from the owner of the vehicle for repairing the vehicle but the same was not produced. I am given to understand that the company is not in a position to produce the consent letter of the owner of the vehicle for getting the vehicle repaired. It was further stated by the representative of the company that it had already paid repairing charges to the authorized dealer and the owner of the vehicle may receive the vehicle after paying the balance amount (Rs.70,000/-).
4. I have considered the submissions of the complainant very carefully and have also considered the verbal arguments of the representative of the company. After due consideration of the matter, I hold that the insurance company was not justified in repairing the vehicle at the authorized dealer without consent of the owner of the vehicle. Since the owner of the vehicle had not given consent for repairing the damaged vehicle, the policy holder was not responsible for the repair. As is evident from the estimate of the repair by the authorized dealer, it was more than 75% of the IDV. Moreover, the vehicle was damaged to the extent that it appears to be a fit case for total loss. This fact is proved by the fact that the repair cost was estimated at Rs.2, 58,201/- which is more than 75% of the IDV. More than 200 parts of the vehicle were repaired/ replaced while repairing the vehicle. One can very well assume that the vehicle was damaged to a great extent. During the course of discussion with the owner of the vehicle, the company’s official has given the impression that the case will be settled on total loss basis and he would be compensated accordingly. One fails to understand as to how the company agreed to make the payment of repair when no consent was given by the owner of the damaged vehicle. In my considered view and in view of the fact that the cost of the repair has been estimated more than 75% of the IDV, it appears to me a fit case to take it as a total loss and compensation to the owner of the vehicle is awarded accordingly. Accordingly, award is passed with the direction to the company to make the payment of IDV to the policy holder less policy excess clause and take the possession of the vehicle. The company is further directed to make the payment of penal interest @ 8% from the date after three months of accident to the date of actual payment.
5. The Award shall be implemented within 30 days of receipt of the same. The compliance of the Award shall be intimated to my office for information and record. 6. Copies of the Award to both the parties.
With regards,
Ashok Kumar Singh.
Greater Noida, U.P..
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