IRDA Recommends Increase in Third-Party Insurance Assessment Limit

Insurance Regulatory

The Insurance Regulatory & Development Authority of India (IRDAI) has recently suggested increasing the surveyor’s limit to Rs 50,000 in case of motor accident and to Rs 1 Lakh for property and fire accidents.

If this proposal is accepted by the Insurance sector, several hundreds of insurance surveyors would be struggling for their livelihood.

With an increase in the threshold for assessment of losses in claims, now the insurers would prefer to engage an in-house team of surveyors to inspect the motor and home accidents, rather than the 11,000 licensed and independent surveyors.

Currently, the threshold of average motor insurance claim is Rs 30,000 for personal vehicles and Rs 50,000 for commercial vehicles.

An independent surveyor in case of motor insurance currently charges between Rs 750 and 10,000 plus expenses. The fee in a fire claim is Rs 1,500 and Rs 1.29 Lakh plus expenses for claims worth Rs 5 crores and above.

According to S. Anoop Kumar, an independent surveyor in Hyderabad, 50% of the independent surveyors will lose business if the claims assessing limit is increased to the suggested levels.

Even the Policyholders will lose out the benefits of hiring independent surveyors because now the insurance companies will employ their in-house surveyors’ team who will work for the company’s benefit instead of the insured.

The third-party threshold claim assessment was increased to Rs 50,000 during the floods Uttarakhand and in Jammu & Kashmir, and IRDAI proposes to apply the new threshold across other damage claims.

Source: This news was published on July 27, 2015 in under the title: IRDA favours hike in third-party insurance assessment limit

Curated from IRDA Recommends Increase in Third-Party Insurance Assessment Limit

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