[Jignesh]

Originally Posted by AGwagon

I guess what I am trying to say is, that the XUV was no way near a write-off,

Hello AGwagon,

On seeing the pictures te damage does not seems to be that extensive that the Car should go for a Total Loss Case. But if you think from the Authorized service centre's side, they have to replace all the parts that are damaged or even those parts that seems to have taken impact.

Also replacing the Air Bags is in itself a huge cost. It would also mean repalcing the Dashboard, Air Bag Control Module & Seat Belts. I recently read on some thread on TBHP that repairing cost of Skoda vehicle was quoted almost Rs. 1.75 lacs (http://www.team-bhp.com/forum/indian...nymore-10.html, check post # 136 & other posts).

There would also be a concern that the Service Centre, which has till date not repaired the Car to this extent, will be able to bring back the Car to its orignal shape?

I feel it would make a better sense to go for Total Loss & claim the full IDV from Insurance Company.

Thanks,

[F50]

Originally Posted by AGwagon

Hello All,

I recently went for an insurance claim on my XUV, at a M&M workshop, which was not registered with my Insurance Company (SBI) as a cashless garage, as a result I had to put in a request at SBI and be involved in some hand holding to start this relationship between SBI and the particular M&M workshop, which exposed me to this insurance system which I would not have thought existed.

So in short, this is how Insurance Companies in partnering with the Workshops make money off the unsuspecting poor customers like us.

Since then I did some research, and spoke to a couple of workshop owner friends, to realize its a common practice.


I may be wrong, but please do write in if you are aware of this unscrupulous CON.

I will write in another post soon, of a case of a write-off of a 2 weeks old XUV, which was at the same workshop, again because of the workings of this system between the Workshops and the Insurance Companies.

Guys please be aware of this now every time you make a claim, there may be a way to negotiate your rates and avoid these small claims totally.

Okay. Joining the party late but....

My post might sound that I'm defending Insurance companies.

AgWagon, A Claim is a Loss. No one, I mean No one except the surveyor or workshop owner makes money off claims! Its a loss for company as well.

You probably are not aware of the procedure or what happens behind the scenes when a claim arise.

Surveyors are NOT insurance companies. They are negotiators on behalf of Insurance Companies. Their main job is to minimize the loss for the company. What negotiations you saw in front of you was to reduce the claim amount for YOU and company.
If he workshop guy had agreed on 12k per panel and surveyor had submitted the report to the company, he would be slapped and fired. Because, the claim department in each company were not selling peanuts before getting into this job. They know this panel would cost 3.5k and it stands that way!

Simple example - A damaged, say Swift can be repaired in 40k (regular policy) but the surveyor passes for 70k (setting involves - workshop owner, surveyor and probably the claim department guy who'll approve) If 70k is approved, who is the loser? You and Insurance company. Who makes profit? Surveyor, workshop and that officer.

Just explain me how does a company make profit out of loss. Even if it does, how would that be reflected in books of account? Auditing ka naam suna hai bhai?

Answer this - Does India make money or the politicians? India ka koi account hai jidar profit daalu?

And for that total loss XUV. He is trying to make some money but repairing and then selling it off as 'premium' car. Whatever is the estimate it might go up on opening the vehicle up. He thinks he is losing out on tax etc but is he going to recover that after re-doing the car?

If I was in his place, accept it as total loss and move on. Example his IDV is of 12L, he should on a lower side should easily get 11.50L, higher could be 11.95L too.
And, if I wanted to show off my business skills, I would accept the it as Cash Loss, whatever the value minus 25% and still keep the car. If I can repair it cheaply and sell it (provided making profit) or scrap it at a good rate.

According to you, no company should ever be in loss! Even though they are.

Originally Posted by AGwagon

As a result over the last three years I have had an experience of taking more than 5 claims on my cars, using different Insurance Companies and workshops, and have thus always wondered how are Insurance Companies making money off me? Although my insurance premiums even with decreasing IDVs keeps on escalating every year

You answered your own question.

You had mentioned in your opening post about your rash driving style. Assuming XUV accident took place in first week of April followed by a DZire accident on 6th April. I would suggest drive carefully. And you would see your premium go down

Hey accidents are accidents but they can be avoided.


On a closing note - Everyone wants discounts 30,40,50% + NCB and want to pay lowest possible premium. With such low premium and high claim ratios, how long will the company provide claims with 50% discounts over NCB? And still everyone expects full claim till the last rupee should be paid?

Bombay mein log bolte hai - Halwa hai kya?

No Offense to anyone! Peace!

[NetfreakBombay]

Originally Posted by F50

Just explain me how does a company make profit out of loss.

By not paying full IDV to customer, and then selling "scrap" vehicle to highest bidder..

Originally Posted by F50

Example his IDV is of 12L, he should on a lower side should easily get 11.50L, higher could be 11.95L too.

Payout to customer should be exactly IDV - Compulsory Deductible. That is 12L - 1000.

[guptad42]

Originally Posted by AGwagon

Regarding the billing system as Chinkara says, the bill is done again to the insurance company with the discount. I have spoken to a friend who owns a MS authorized garage, he confirmed the case.

This sort of invoice reconcillation with bulk/contract discounting is common in several industries in business-to-business scenarios.

The real CON here is against the third party in the insurance scenario - the car-owner.

As per policy, the car owner is liable to pay the mandatory deductible + his share/depreciation %age of the cost of repair to the insurance company. The cost of repair to the insurance company is the actual discounted cash payout to the garage, not the inflated bill presented upfront.

Effectively, the insurance company is committing fraud on the car owner, by charging an inflated share of the cost of repair on the basis of an inflated cost bill shown to the customer and not the actual cost of repair. Should be taken to IRDA or to CCI as a restrictive trade practice (since the actual repair cost is being hidden from the customer/ customer is being deliberately misled). The problem will be finding evidence.

Here's an idea: Do you think govt. owned insurance companies also do this? If they do, it should be possible to find out via an RTI query!

In case of private company, it'll probably need summons from CCI against a formal complaint. CCI has the authority to collect evidence/ conduct an investigation and pass an order.

Best done by an automobile association, in my opinion.

[AGwagon]

Sorry for the late response was travelling, my responses in Bold below

Originally Posted by F50

Okay. Joining the party late but....

My post might sound that I'm defending Insurance companies.

AgWagon, A Claim is a Loss. No one, I mean No one except the surveyor or workshop owner makes money off claims! Its a loss for company as well.

You probably are not aware of the procedure or what happens behind the scenes when a claim arise.

F50, I am not sure you have read through the responses as well or may be I wasn't clear, what we are trying to bring to light is just how easily does Insurance companies and workshop join hands to con money out of unsuspecting customers, when the loss was theirs to bear. It is more than obvious a claim is a loss, which is a loss to the insurer and the insured (car owner). However, if you read through the Porsche case that I discussed, the Insurance Company, while just paying the 5k in repairs will make more money in the reduction in premium discount and 0%NCB.

Also I am aware that Sureveyors are mostly like salesman/freelancers, who have enough incentives to reduce the claim cost to the insurance companies

Just explain me how does a company make profit out of loss. Even if it does, how would that be reflected in books of account? Auditing ka naam suna hai bhai?

Sirjee, what happens in books is a discount entry, look at any business which gives dealer/distributor discounts. I am not sure how I can explain it here, but it is a common practice in mostly all B2B bulk business transactions, please consult a CA and he will gladly explain to you the mechanics of such transaction. I am an Investment Banker myself, and you would be surprised to see how easily these things can be maintained within the legal and standard accounting requirements.

Answer this - Does India make money or the politicians? India ka koi account hai jidar profit daalu?

Not sure what you are trying to say here?


And, if I wanted to show off my business skills, I would accept the it as Cash Loss, whatever the value minus 25% and still keep the car. If I can repair it cheaply and sell it (provided making profit) or scrap it at a good rate.

How can you keep the car if the Insurance has declared it as a total loss? The entire premise of my argument was based on that how easily does Insurance companies now a days declare it a total loss. Whether you think in this case is it justified or not, is a subject of opinion. For someone not to have that choice, of getting it repaired or total loss is what I believe is not fair

According to you, no company should ever be in loss! Even though they are.

I do not believe I say so. Let me put it this way, an insurance claim is obviously a charge to the Insurance Company thus a loss to their balance sheet, what I wanted to highlight here was just an observation of how Insurance Companies, minimize or even in some cases gain from some of these peculiar gains. Let me assure you no Insurance company is in this business to make losses, and if they do not have such methods that I talked about, they most certainly would have been bleeding money.



You answered your own question.

You had mentioned in your opening post about your rash driving style. Assuming XUV accident took place in first week of April followed by a DZire accident on 6th April. I would suggest drive carefully. And you would see your premium go down

Hey accidents are accidents but they can be avoided.


I appreciate your concern. The XUV accident was my fault, however the Dzire accident (which in btw happened last year, dont know how you got the date) was someone else's fault. The idea of mentioning it here was just to justify that even with raising premiums, if the claim bills carried no extra discount for the Insurance Company, I can not see how the Insurance company made money off me.

My intention was not to engage a discussion on my driving style or my concern over my rising premium costs.

On a closing note - Everyone wants discounts 30,40,50% + NCB and want to pay lowest possible premium. With such low premium and high claim ratios, how long will the company provide claims with 50% discounts over NCB? And still everyone expects full claim till the last rupee should be paid?

Bombay mein log bolte hai - Halwa hai kya?

Bhai, hamare main ek aur kahawat hai- boss koi jugaad batao na! we live in a land where each man is a businessman in himself. Also everyone wants a good deal, thus you need to show good discounts to reach a figure.

And once I have paid an agreed premium, I believe it is my undisputed right to have the full claim paid till the last paise.

No Offense to anyone! Peace!

Same here brother, the forum is to discuss and share experiences and possibly learn from each other's mistakes. None taken and none intended!

Originally Posted by guptad42

This sort of invoice reconcillation with bulk/contract discounting is common in several industries in business-to-business scenarios.

The real CON here is against the third party in the insurance scenario - the car-owner.

You are absolutely bang-on, precisely what I wanted to convey


Effectively, the insurance company is committing fraud on the car owner, by charging an ..., in my opinion.

Guptad42, you are partly right, this is not a fraud as it is purely a business transaction with differential prices, as some of the BHPians explained earlier (wholesale Vs retail). So I do not think that anything good will come out of knowing this differential pricing, all you can benefit out of this knowledge is in which cases to make a claim and in which cases to negotiate hard with the workshop guy and keep enjoying your NCB .

[handsofsteel]

Originally Posted by fordday

I had a somewhat opposite experience of what the OP had. In my case of 4 day old Activa suffering frontal crash, the SA straightaway asked if I am going to make insurance claim. When I asked why he said the cost will vary. If I make payment from my own, total damage will be 3-3.5k, otherwise its 5k billed to insurance, out of which I need to pay 800 rupees. I did not do anymore calculation and went for insurance claim.

+1 to that. when i had my car bumper repainted (after being tail ended by a bike), the honda SA asked me if i wanted to pay up or claim insurance. he quoted me a figure of 2500 rs. as i had already had a claim that year, i went for the insurance and was shocked to see the company being billed for 12500 (all inclusive). when quizzed, the SA said," sir, insurance company se hi to paisa banta hai, kaunsan apne jeb se bharta hai"

[KANNURAN]

Thank you, Sir, for bringing out the nexus so eloquently. Am sorry about your vehicle, but thank God there was no injury. On similar lines to yours, let me state my harrowing experience with Tata AIG, when my Swift met with a bad accident and suffered apron damage.

I had a Zero Dep and cash-less policy from Tata AIG. I shifted from Reliance largely based on the deep trust I have in the Tata name. I submitted ALL required documents within a few days of the accident and flew out to my overseas job, believing in Popular Automobiles Kannur's statement that the car would be ready in 3 weeks.
For FOUR Full months the car was at their garage with all sorts of reasons and then comes the final nail in the coffin. The Tata AIG representative at Cochin assigned to me calls me and tells me of an "inside story" that the surveyor had, during his initial assessment, not detected a faulty ECU (God only knows how he detected it coz the car had been winched to the repair facility) and that Popular Automobiles later revised their claim for the repair, by INCLUDING the cost of the ECU. AND THAT POOR ME SHOULD FORK THE AMOUNT TO THE POPULAR AUTOMOBILES.
Repeated correspondences with the TATA AIG representative and to their customer service, citing my cash-less and zero depreciation policy led to NO solution. In the end, I had to fork out about 12,000 from my pocket to get the car released.
The incident taught me a lot, but also led me to lose my faith in the TATA brand. I did not expect them to condone the shortcomings of their representative at Cochin and his clearly abrasive conduct.
The bottom line to the incident is, the whole field of auto insurance is SO MURKY, we customers are SITTING DUCKS to mistreatment and falsehood. Since I am addressing an informed and elite audience through this forum, I hope someone can raise a voice loud enough, so that it gets to the ears of those who matter.

[Jignesh]

Originally Posted by AGwagon

I agree with the some of you, that Insurance Companies are giving a bulk business to these workshops, but the rate differential is just daylight robbery.

Hello AGwagon,

Based on my experience any Insurance claim in India is divided as follows:

1. Spare parts replacement cost
2. Denting & Painting cost
3. Labour cost

Now, in case of spare parts, Glass are fully covered. For other spare parts - for Plastic parts generally companies consider 50% depreciation & for others parts it is based on age of car.

When it comes to Denting & Painting and Labour cost, these are fully covered by the Insurance companies, no matter how old is the car.

So if the stated cost for Re-painting a part is Rs. 4,000 to Car Owner & if Insurance company manages to negotiate it to Rs. 2,500 there is no loss to the Car Owner, if the quality of work is not compromised.

Now, coming to spare parts cost, Service Stations cannot inflate the prices beyond certain extent.

Thus if Insurance companies are getting huge discounts from Service Stations there is nothing wrong in that as they generate huge volume business for Service Stations & for Car Owner there is no monetory loss apart from loss of No-Claim Bonus.

Thanks,

[sgiitk]

There was a book entitled Insure and Die. Te insurance industry (or should I say Mafia) saw to it that the publisher withdrew it, when published elsewhere they bought an destroyed all the copies.

[AGwagon]

Originally Posted by Jignesh

Thus if Insurance companies are getting huge discounts from Service Stations there is nothing wrong in that as they generate huge volume business for Service Stations & for Car Owner there is no monetory loss apart from loss of No-Claim Bonus.

Thanks,

Jignesh, there you answered it in your last line, the whole idea is for insurance companies and the workshop to collude and sometimes lead you to believe that you could not have gone in with paying by yourself, and instead going for the claim (Porsche case), so you do lose a no-claim bonus, and on cars that expensive it can run to 5 digit figures.The other is cases where Insurance Companies do the math and ascertain at least for them they will be better off if they book it under a total loss, and then recoup most of their loss through selling a repaired in-demand product, where the customer doesn't get any say and he just have to accept it.


The takeaway here is definitely just to better informed of the differential pricing and make a decision accordingly.

[Jignesh]

Originally Posted by AGwagon

Jignesh, there you answered it in your last line, the whole idea is for insurance companies and the workshop to collude and sometimes lead you to believe that you could not have gone in with paying by yourself, and instead going for the claim (Porsche case), so you do lose a no-claim bonus, and on cars that expensive it can run to 5 digit figures.
The takeaway here is definitely just to better informed of the differential pricing and make a decision accordingly.

Hello AGwagon,

Yes, I accept your argument, that in case of Porsche case, the Car Owner would have been better off if he has done the Re-Painting job himself. But I am sure that none of the Service Station would have quoted him less than 5 Figure Amount had he approached them directly.

This happens in all industries. Take watches for example, if you go for a Battery replacement (which in most cases is similar for all Watches), the repairer will first see the make (price) of watch & then quote the Amount of Battery. This is a normal practice adopted in almost all the Consumer Goods Indusrty.

I am not saying that we as Consumers should accept Insurer's & Service Station's words on face value. But at times you don't have other option.

Thanks,

[Musicmaker23]

Originally Posted by hrman

In one of my friend's case some time back, his Hyundai was rammed into by from behind by another vehicle. When he went to the hyundai dealership and said he was going to claim insurance, he was quoted 38000 for repairs. When the surveyor came, the negotiation happened and the total claim amount was brought down to 23000, since it was not cashless and needed to be reimbursed. My friend paid the amount and claimed from the insurance company, who in turn reimbursed him 16000.. Net result, Insurance company saves 38000-16000= 12000. Workshop may have still made a marginal profit. Customer spends only Rs.7000 from a potential claim of Rs.38000. So everyone is happy.
The above was related to Automibile insurance. When it came to claiming my mom's hospitalisation through cashless Mediclaim, the hospital quoted lower rates for ICU if it is through insurance and higher for personal payment, since Insurance rates are already negotiated. Can you beat that?

Your story reminds me of a similar tale from US where an uninsured man sued his hospital when he found out that final billing for the insurance firms for his treatment was less than a quarter of what he was billed. Needless to say it was all hush-hush and the man was duly rewarded for his sensational research skills in kind!
I'm not entirely surprised that the same practice is prevalent in the auto industry as well. After having read innumerable reports of zero-depreciation insurance coming to the rescue on team-bhp, I decided to go in for the same paying a heavy 55% premium over a regular scheme. I banged up my front end the very next week. Total cost of repairs: Rs.18000. I pay Rs.1004. Not a bad deal.

Another thing I'd like to point out is that auto repair shops have a look at your insurance cover when major overhauls are required & set up deals with insurance surveyors, allowing the auto shops to change more equipment than required. I discovered this when my car was pretty badly messed up & the total estimate for repairs went up from 22k first to 27k a week later, to finally 48k at the time of settlement. I eventually paid 4500. After going through the invoice, i discovered they'd changed out the entire locking system for 17k, as the driver's side cylinder was "slightly" bent! I asked him to justify this since I inspected the 'damaged' part myself and I found the damage negligible. The response, "Sir, I changed it after having discussed it with the surveyor. You're not paying much for it anyway & we were more comfortable giving you a brand new locking system."

[F50]

Originally Posted by NetfreakBombay

Payout to customer should be exactly IDV - Compulsory Deductible. That is 12L - 1000.

Technicalities when not explained could create a very big problem.
Im not saying customer is at fault, it could be the advisor.
Hence, Read The Offer Document Carefully Before Investing

When a total loss claim arises, the final value is decided after looking at the IDV or present market value, which ever is lower.

Example: Swift Vdi and the IDV is 4.5L whereas the market value is 4L. So tomorrow, if total loss claim arises your IDV is 4.5L whereas the market value is not more than 4L than the company will pay around 4L but not 4.5L. Its just like buying mobile phone, would you pay 25k for iPhone 3GS when market value is 15k?

Many people just to save few hundred bucks, they'll depreciate the car's value by 15-20% every year and when the claim arises company will pay according to IDV which could be 3L then customer would start blaming company for false promises. If IDV is lower than market value, company will happily pay you full amount.

I always prefer and advice to keep IDVs on higher side just for this scenario. I save 500 bucks for 5 years i.e. 2500/- and when claim is paid for 3 lakhs, One lakh lower than market value is it worth saving 2500?

If people can bargain for premium, you also have to bargain when you settle a Total Loss Claim.

Originally Posted by NetfreakBombay

By not paying full IDV to customer, and then selling "scrap" vehicle to highest bidder..

Not paying of "full" IDV is explained above.
Coming to selling scrap,
its none of the customer' business to know what price the insurance company is selling the so called "scrap" at what price after the claim is settled.

If customer feels, scrap value is lower or less. In that case claim it as cash loss, IDV minus 25% and you keep your scrap. Roam around the market asking for prices and sell it for the best quote. Do you have that much of time? Do you have a known scrap dealer, if yes go ahead. If not then why bother about what and how much insurance company is paying?

I am not aware about your experience in Health Insurance Claims, if you don't have then you would declare Health Claims as the biggest scams by hospitals! There are few threads, go through them.

Originally Posted by AGwagon

However, if you read through the Porsche case that I discussed, the Insurance Company, while just paying the 5k in repairs will make more money in the reduction in premium discount and 0%NCB.

If its a Zero Dep policy, the customer is unaffected whether his panel cost 5k, Rs 50 or Rs 50k. It is Porsche who is taking customer for a ride by charging premium for a 5k panel. Infact, you should thank Insurance company for pulling out the correct price of painting a Porsche panel (i don't know which one) is 5k and not 50k.

If its not a Zero Dep, policy please ask your surveyor how much customer has to pay since he has settled for 5k.

Originally Posted by AGwagon

please consult a CA and he will gladly explain to you the mechanics of such transaction.

We own a CA firm as well. I know how entries are made and changed.

Originally Posted by AGwagon

Answer this - Does India make money or the politicians? India ka koi account hai jidar profit daalu?

Not sure what you are trying to say here?

Consider India as Insurance Company and politicians as surveyors and workshop owners.

Originally Posted by AGwagon

How can you keep the car if the Insurance has declared it as a total loss? The entire premise of my argument was based on that how easily does Insurance companies now a days declare it a total loss. Whether you think in this case is it justified or not, is a subject of opinion. For someone not to have that choice, of getting it repaired or total loss is what I believe is not fair

That is called Cash Loss Clause
Any repairs which are going to cost close to 70% if IDV will be consider as total loss.

Originally Posted by AGwagon

I appreciate your concern. The XUV accident was my fault, however the Dzire accident (which in btw happened last year, dont know how you got the date) was someone else's fault.

Your post below especially the bold plus it was posted on 6th April '12 made me think it was recent. I didn't knew very recently was a year ago.

Originally Posted by AGwagon

Very recently I managed to rear-end my Dzire to a Innova, as the idiot suddenly stopped with no lights trying to hop the central divider to make a J-turn,

Originally Posted by AGwagon

Bhai, hamare main ek aur kahawat hai- boss koi jugaad batao na! we live in a land where each man is a businessman in himself. Also everyone wants a good deal, thus you need to show good discounts to reach a figure.

And once I have paid an agreed premium, I believe it is my undisputed right to have the full claim paid till the last paise.

Bhai, jugaad bhi karneka aur pura bhi chahiye, thoda difficult hojaata hai.

[sidmumbai]

i own a ANHC purchased 5 months back. I have a zero depreciation policy from Honda assure which cost me good 27 k. but being a new car i thought of buying this for a pece of mind. then i had down a couple of months time i had bruised the rear bumper and thought of using the insurance money. honda quoted me 6500/- just for painting. i had to pay 1000/- as a claim money. rest the insurance company will pay. i asked the rate for direct payment ie no insurance:it was 6000/-. so the situation was:

i pay 1000 as claim application fees. i lose 20% ie almost 5000/- as no claim bonus. so total cost for me is 6000/-

too much to get a bumper painted. got it painted from a maruti authorised workshop (not a dealer) for 2K. I was a bit worried about the paint used. So went with them with the car. they use ppg paint. Was a bit of a hassle but took the pain because i had read this thread and really wanted to know how much the dealers were overcharging us.

[mjumrani]

^

The Dealers always overcharge for anything and everything you get done from them.
This is the reason why many people go the insurance route and lose the NCB.

I for one, hate scratches on my car and I have honda assure too, so any scratch that takes the paint layer off has to get repainted.

Done it thrice now (including 1 medium accident). Payed 1000 each time, I say that is worth it. NCB vs Peace of Mind, I think latter always wins.