Page 441 - IC38 GENERAL INSURANCE

When motor claims are settled on total loss basis, the damaged vehicle is taken
over by insurers. Salvage can also arise in fire claims, marine cargo claims etc.

Salvage is disposed off according to the procedure laid down by the
companies for the purpose. Surveyors, who have assessed the loss, will also
recommend methods of disposal.

e) Recoveries

After settlement of claims, the insurers under subrogation rights applicable
to insurance contracts, are entitled to the rights and remedies of the
insured and to recover the loss paid from a third party who may be
responsible for the loss under respective laws applicable. Thus, insurers can
recover the loss from shipping companies, railways, road carriers, airlines,
port trust authorities etc.

Example

In the case of non-delivery of consignment, the carriers are responsible for the
loss. Similarly, the port trust is liable for goods which are safely landed but
subsequently missing. For this purpose, a letter of subrogation duly stamped is
obtained from the insured before the settlement of the claim.

7. Disputes related to claims

Despite best efforts, there could be reasons for either delay or non-payment
(repudiation) of claim, either due to delay in notice of loss or non-submission of
documents by clients.

Apart from these, the most common reasons, to name a few are:

 Non-disclosure of material facts
 Lack of coverage
 Loss caused by excluded perils
 Lack of adequate sum insured
 Breach of warranty
 Issues regarding quantum due to underinsurance, depreciation, etc.

All this could cause considerable grief to the insured at a time when he is
already suffering from financial constraints arising due to losses.
In order to reduce his sufferings, grievance redressal and dispute handling
procedures are well laid out in the policy itself. Policies of fire or property have
the condition of “Arbitration” in the policy itself.

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