Lok Sabha passed a bill recently to amend the existing motor vehicles act to expedite claim settlement process of the motor third party claims and limit the losses of insurers.
Currently, there is no time limit to approach insurer for claim settlement in accidental case. However, the bill has put a limit of 6 months on such incidents. This means, complainant will have to approach insurers within 6 months from the date of accident.
In addition, insurers can settle such claim requests within 30 days. If complainant accepts the insurer’s offer, the company has to settle it within another 30 days.
Apart from this, the bill seeks to limit losses of insurers. Currently, there is no limit of claim on the third party claim settlement. Since it is difficult to assess worth of a life, insurers usually end up paying huge sums of money. The new bill puts a cap of Rs.10 lakh on death claim and Rs.5 lakh on serious injury.
Experts believe there may be more amendments to the new bill. Krishnamoorthy Rao, CEO, Future Generali India Insurance believes, “We need to wait for the bill to be approved by the Parliament as opposition parties have demanded certain changes. Currently, the impact of the bill cannot be predicted.”
The bill, if approved by the Parliament, will replace the 26-year-old Motor Vehicle Act that was last amended in 2001.