Print Edition - 2015-05-23 | MONEY
Insurance claim settlements taking too long, says IB
May 22, 2015-
Insurance companies have been accused of taking their time to process claims for damage caused by the recent tremors and aftershocks. The Insurance Board (IB) said that insurers had settled only four-five earthquake related cases each since the Great Earthquake on April 25. The regulator had instructed them to pay compensation as soon as possible.
According to the board, insurance companies have received more than 12,000 claims so far. Most of them are for the destruction of houses, commercial goods and motor vehicles and accidents while a few are life insurance claims. “However, insurance companies have settled very few claims for damage to houses amounting to more than Rs200,000,” said Raju Raman Paudel, director at the IB. Similarly, out of the 544 claims received by Lumbini General Insurance, it has settled four vehicle cases and one accident case. As per a company source, most of the claims are related with bank loans and damage to commercial goods and a few with home insurance.
Likewise, Sagarmatha Insurance has settled eight claims out of the 1,685 claims it has received. Four of the claims are for damage to houses and four for damage to commercial goods. Deputy General Manager Chunky Chhetry said they were yet to receive the estimates for large insurance claims. “The company has received 60-70 claims for damage to vehicles, but no estimates have been submitted for any of them,” he said. The highest claim it has settled so far amounts to Rs150,000.
Chhetry said lack of consumer awareness about the insurance process and documentation problems were the main reasons behind the slow progress in the settlement of insurance claims.
Meanwhile, the IB said that it had deployed four monitoring teams on Friday too to put pressure on the companies to settle claims at the earliest amid complaints that they had been working slowly.
The insurers, however, said that claims settlement had been delayed as policyholders did not bring the paper work promptly. Similarly, they have blamed lack of preliminary estimates, inadequate number of surveyors and difficulties in contacting policyholders due to poor communications for the slow progress in clearing the claims.
“We have been settling damage claims since Thursday,” said Madhusudan Khatri, head, claims at Nepal Insurance Company. According to him, they have started making payments of Rs50,000 to Rs200,000 based on the surveyors’ reports. Nepal Insurance has received 950 claims and has deployed 35 surveyors including Indians. Apart from an increase in the number of claims, many people have also been rushing to insure individual houses following the earthquakes, Khatri said.
The small number of surveyors available has also prevented quick settlement of claims, private insurance companies said. As per the IB, there are only about 250 licensed surveyors, among whom around 100 are actively involved in the business. Citing a shortage of manpower in the aftermath of the earthquake, the IB has allowed insurance companies to hire Indian surveyors without its prior approval.
“A surveyor who is now getting at least 20 observations from a company is now overwhelmed with work as the individual surveyor usually gets hired by many such companies,” said an official at Lumbini General Insurance. As per the source, the settlement of claims has also been delayed as many people have not been able to provide damage estimates because they are too scared to enter their destroyed houses to make an assessment. “They have not been able to produce their house plans and land ownership certificates for the same reason,” the official said.
Published: 23-05-2015 09:05