IRDA favours hike in third-party insurance assessment limit

MUMBAI: Hundreds of insurance surveyors are staring at the spectre of losing their livelihood following a proposal by the regulator to increase the threshold for assessment of losses in claims. If accepted, insurance companies will be able to settle claims of up to Rs 50,000 for cars and Rs 1 lakh for property without engaging surveyors.

At a meeting in Hyderabad with the chief executive officers of insurance companies, Insurance Regulatory & Development Authority of India (IRDAI) was said to have suggested raising the level of claims that would require surveyors to assess losses.

“The proposal is to increase the limit for surveyors to Rs 50,000 in case of motor and to Rs 1 lakh for fire and property,” said a CEO who attended the meeting. The average claim in motor insurance cases is Rs 30,000 for personal vehicles and Rs 50,000 for commercial vehicles.

There are about 11,000 licensed surveyors in India. In the case of motor insurance, surveyors charge Rs 75010,000 plus expenses. Fees for the survey in a fire insurance claim start at Rs 1,500. For fire claims exceeding Rs 5 crore, surveyors charge Rs 1.29 lakh plus expenses.

“Almost half of the surveyors will go out of business if the limits are raised as is being suggested,” said S Anoop Kumar, an independent surveyor based in Hyderabad. “Policyholders stand to lose out as companies will use their in-house surveyors who will work for them rather than for the insured.”

During the floods in Jammu & Kashmir and Uttarakhand, the regulator had increased the threshold for third-party assessment to Rs 50,000.

Curated from: http://economictimes.indiatimes.com/wealth/insurance/news/irda-favours-hike-in-third-party-insurance-assessment-limit/articleshow/48229852.cms

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