The roads ministry, insurers and state police departments are working on a plan to slash the time needed for claims’ settlement for accident victims from an average of five years now to just three months, two people aware of the plan said
The roads ministry, insurers and state police departments are working on a plan to slash the time needed for claims’ settlement for accident victims from an average of five years now to just three months, two people aware of the plan said.
Road accident victims or their families will also be eligible to get immediate monetary relief based on a formula developed by the Supreme Court, Motor Accident Claims Tribunal (MACT) and high courts, the people said on condition of anonymity.
The aim is to reduce legal disputes over claims and make the process of claiming money from insurers simpler for road accident victims or their families.
“Every year, claims worth at least ₹10,000-12,000 crore are raised by road accident victims. Of this, insurers pay at least ₹5,000 crore on average. The rest of the amount remains disputed, and the court cases go on for years, which increases the distress for victims’ families,” said one of the two people cited above.
“The settlement should be completed within a month. Right now, it often takes 5-10 years. The aim is to make settlements faster and more acceptable for the victim’s family,” he added.
According to the plan, a website is being developed by the General Insurance Council (GIC) for real-time reporting of accidents. The police or the victim’s family will need to report the accident immediately on this portal and call on a 24×7 phone number to intimate the insurer.
The Supreme Court, on 15 March, directed that the police will have to submit the formal accident report electronically to GIC and MACT within 48 hours, explaining the cause of the accident. “This will be implemented as a general norm, and insurers have agreed. The detailed accident report (DAR) has to be submitted by police within a month, and MACT will have to accept the applications and reports via email. MACT will need to send the summons via emails and conduct a hearing via video conferencing. Within a month, MACT will have to conclude the case, and then the insurer needs to send the money electronically to the deceased’s family,” said the first person.
In order to fast-track the settlement process, the insurance company will appoint its own investigator immediately after the intimation of the accident. The investigator will visit the accident spot and collect the basic records of the victim, the vehicle and the circumstances of the accident.
“The Supreme Court judges have held meetings recently on the implementation of the plan with the police department, home ministry, ministry of road transport and highways, state government authorities and GIC. They have all agreed to implement the fast-track plan,” said the first person, adding that from 1 May, the proposed plan has already been implemented as a pilot project in Delhi.
So far, the police’s DAR goes to court and is brought to the insurer’s notice 1-2 years after an accident. Right now, there is a delay in evidence collection and verifications both from police and the deceased’s family’s side after an FIR is lodged. Then the police send the file, and the victim’s family files the claim application at MACT. The tribunal then sends a summon after 10-15 days to the insurer, victim’s family and police, asking them to be present for hearing in the subsequent 45 days. The hearing continues at MACT for 5-10 days, and a settlement amount is ordered by the tribunal.
After that, the insurance firm sanctions the compensation amount and sends a cheque to MACT, which deposits it in the bank and authorizes both the victim and the lawyer to withdraw the sum. The lawyer takes a 30% commission and pays the rest to the victim’s family.
According to the new plan, MACT will send the DAR and the summon notice to the parties within seven days and conduct the first hearing via video-conferencing within 30 days and then within the next three months, the case has to be closed. Subsequently, within 15 days, the insurer will need to pay the compensation to the victim via internet banking.
There will also be a specific formula to decide the compensation, the people cited above said.
“Around 500,000 motor accident claims are reported every year, of which around 150,000 are fatal accidents, and the rest are grievous injury claims,” said the second person.
“Most of the people are not even aware that even if the victim does not have any insurance policy, she is entitled to receive compensation from the vehicle’s insurer,” said the second person.
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