Commercial Insurance - Claim handling delay

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A penal interest of 2% more than the bank rate specified by RBI is levied on an insurance company if it fails to reimburse a claim within the stipulated time.

Such an issue should be handled within 30 days by the insurer.

When your insurance company delays handling your claim without providing a reasonable justification for doing so, you have the right to complain.

Delay is generally calculated from the date of filing the claim by you. Your claim should be supported by relevant facts and documents like your policy number, proof of loss, valuation of your commercial property, etc.

Every claim has to be processed within a stipulated time. Any delay thereafter amounts to deficient services, against which a consumer case can be filed.

Instead of taking the legal route, Resolver will help you draft the complaint and submit it to your insurer. Resolver’s free tool will also assist you in providing timely updates and escalation options.

You should know
  • Contact the toll-free customer care number provided to you by the commercial insurance policy provider, you can also drop a mail on their e-mail id specified therein.
  • Submit your complaint in writing, along with the necessary documents to support the complaint.
  • Remember to take the written acknowledgment of your complaint duly signed with the date specified.
  • You may also approach the Grievance Redressal Officer, of the commercial insurance Company.
  • They usually resolve the issue within a reasonable time. However, if they don't solve within 15 days or if the result is unsatisfactory, you may approach the Grievance Redressal Cell of the Consumer Affairs Department of Insurance Regulatory and Development Authority of India (IRDAI).
  • When you purchase an insurance policy/product from a Bank, it is regulated by RBI, through its appointed external Banking Ombudsman.
  • Lastly, file a civil complaint with the insurer before a civil court.

How can RBI help?

The Banking Ombudsman appointed by the RBI will make a decision on your case either through conciliation or mediation between the complainant and the bank complained off. If the terms of the settlement offered by the bank are fully accepted by you, the Banking Ombudsman will pass an order as per the terms of the settlement. Further, the outcome will be binding on you and the financial organisation. Compensation offered by RBI:

    • For Loss suffered: The Ombudsman has the power to direct the Bank to pay as compensation, equal to the amount of loss suffered because of the act or omission by the Bank or amount up to Rs 20 lakh, whichever is lower.
    • For Mental Agony and Harassment: You will be awarded compensation not exceeding Rs.1 lakh.

 

If the issue is still not settled by way of an agreement within a period of one month, the Banking Ombudsman will proceed further to pass an Award. However, a reasonable opportunity is provided to both the bank and the complainant to present their case. But, this award is not binding it is upon the complainant to either accept or reject it. Upon rejecting the award, you may approach the Appellate Authority which is vested with a Deputy Governor of the RBI. It will pass the order as it may deem fit in the best of your interest.

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