[ashwin.terminat]

This is the tale of a claim with Oriental Insurance regarding our 13 year old Honda City that was damaged by a tree falling on it during the rains in Bangalore last month.

TL;DR:
13 year old car damaged by a tree falling on it. Repair costs are Rs.1.34L. IDV of the car is 1.62L. Insurance Payable is Rs.91,000.

Terms and Conditions of the policy:
"The insured vehicle shall be treated as a Constructive Total Loss if the aggregate cost of retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle."

But, Oriental Insurance is saying that since their liability or insurance payable does not exceed 75% of the IDV of the vehicle, the claim will be a repair settlement.

Now, the longer version:

In the first week of June, I had used to car to get to work when it really started pouring down in the evening accompanied with heavy gusts of wind. I had already begun to think that the car will be damaged by trees since my office is in one of the few areas where green cover has been maintained in Bangalore. When I walked over to the car in the evening post work, this is what I saw:






Luckily, the car was in drivable condition and I drove it back home. Then started the process of finding someone who would repair it. Of the two private garages, both said it is best to leave it at Honda’s authorized service centre. So I took their advice and contacted Dakshin Honda – the same place we purchased our Honda Jazz from. I sent them pictures on WhatsApp and they came back with a quote of Rs.1,50,000 or so – which was in turn with what one of the private garages had told me I should expect. I then checked with Magnum Honda since they had good reviews on their Body Shop listing on Google. I sent them the same pictures and they came back with a quotation of Rs.58,000 based on the pictures I had sent on WhatsApp. I told them I would drop by on the 12th of June to drop off the car for repairs.

I dropped off the car for repair on the 12th and the service advisor told me I should expect a bill of close to Rs.1,50,000 for all the repairs. We also started the insurance claim process by this time. The IDV of the car was Rs.1,62,000. The insurance company said they need a detailed estimate before they assess the car. I asked Magnum Honda for this and they sent me a detailed estimate carrying repair costs of Rs.1,59,000.





We forwarded this to Oriental Insurance and asked them to proceed with the surveyor.

At this point, I had gathered that since the repair cost was greater than 75% of the IDV = Rs.1,21,500, the claim would be settled as a total loss.

The surveyor visited the service center and told us the repair estimate was Rs.1,34,000 and the insurance payable was around Rs.80,000 to Rs.90,000. Since the insurance payable was not greater than 75% of the IDV, the car would be repaired.



I had read about the terms and conditions for total loss and knew it was based on total cost of repair of the car and not insurance payable.

From IRDA’s Policy Wording for Private Car polices:



From Oriental’s Terms and Conditions for Private Car insurance policies:



I tried explaining it to the surveyor, but he refused to accept what I was saying.

A few days later, we got this letter from Oriental:




I called Oriental Insurance’s customer care – who tried to tell me that the IDV would undergo depreciation since it is an old vehicle. I told them they are lying because it is clearly mentioned in the terms and conditions that no further depreciation will be made on the IDV. He then asked me to email Oriental on csd@orientalinsurance.co.in. I promptly did this and awaited a reply for a few days. We also met a Mr. Raghavendra at the Claims office to understand what was happening. He told us that if we were going to look at clauses in the terms and conditions, we should go the legal route. When a reply did not come to my email to csd@orientalinsurance.co.in, I called IRDA’s Policy Holder helpline which told me to contact the Regional Manager – Mrs. Sunita Gupta in their office on Residency Road. I had also raised a grievance on PG Portal by this time.

I e-mailed her the day prior to my visit with details of the case so she can familiarize herself with the details. I visited her the next morning along with my brother. She said that they had ignored my e-mails and grievances thus far because the Policy Holder’s name and mine did not match. Fair argument, I let it go.

Mr. Raghavendra, whom we had met earlier, also joined us in this conversation. When we asked her why this was not a total loss claim, she told us that they were just following what was told to them by the corporate office. But she would look into our case and get back to us by the end of the day – this was a Wednesday. I waited until Friday to email her and check with her – still did not receive a reply.

The car had already been at the service center for a month and was racking up parking charges every single day.

This Monday, we got information that the claim was going to be settled on repair basis and not on total loss basis. The next day, we raised an issue on IRDA’s grievance system – igms.irda.gov.in. In which we had mentioned that we want all communication to be via email and nothing to be sent physically. We also found the e-mail IDs of a bunch of senior executives of Oriental Insurance here: https://orientalinsurance.org.in/web...ior-executives and emailed all of them hoping something good would come of it.

Upto Wednesday – no response. Except one person from the senior executives list saying the DGM of the Residency Road branch had retired and one, Mr. Ashok Jain was now the DGM. He was kind enough to give me his email ID as well. We forwarded the same email to Mr. Ashok Jain as well.

This afternoon, we got responses to our IGMS complaint through Mr. Sivakumar and also a reply from Mr. Ashok Jain, the DGM of the Residency Road branch:





We’ve sent them court rulings from previous cases (https://indiankanoon.org/doc/180217210/) where it clearly says that the repair cost is to be considered for total loss settlements. But everyone at Oriental seems hell bent on continuing with their lies. IRDA also seems toothless in that aspect. What options do we have apart from the long and arduous legal process?

Goes without saying, if you are from Bangalore - please do not purchase your insurance from Oriental Insurance. They have zero regard for the terms and conditions and use that as a scare tactic to try and get people to shut up.

I've also attached the copies of IRDA's Policy Wording and Oriental's Terms and Conditions should anyone ever need them in future.

[ghodlur]

Really sad to know about the car and even more sadder to see the way Insurance cos are treating this matter with IRDA being a mute spectator to this episode. There is nothing more one can suggest since you have diligently done everything from your end. Two things you can do:
1) Approach Consumer forum and file a case. Provide all the documentations which you have. OR Hire legal services to take this forward.
2) Use the social media platforms and any contacts in the television media to highlight this issue.

Meanwhile if the parking charges are eating away your income, then think of alternative location to stow away the vehicle. I don't know if displaying the vehicles in a busy junction with apathy of Oriental Insurance would help, but its worth a try.

I am meanwhile trying to seek help from a few friends in Insurance sector to find a possible solution to this problem.

[padmrajravi]

The decision to go for total loss or repair is based on the surveyor assessment and not based on the estimate provided by Garage. Service center can give you any estimate , the insurance company will always go by the surveyor estimate which will include depreciation also. I am afraid , there is nothing much that can be done here. Only thing you can contest here is the method surveyor used to get to the estimate , but those are ussually based on documented rules and depreciation percentages.

[ashwin.terminat]

Originally Posted by padmrajravi

The decision to go for total loss or repair is based on the surveyor assessment and not based on the estimate provided by Garage.

Yes, by estimate, I meant the assessed repair cost itself. Which was Rs.1.34L against the Rs. 1.59L estimate given by the service center.


The point of contention is that the insurance company is not considering assessed repair cost for the total loss decision, but the amount payable by them in that assessed repair cost, which in this case is Rs. 91,000

[padmrajravi]

Originally Posted by ashwin.terminat

Yes, by estimate, I meant the assessed repair cost itself. Which was Rs.1.34L against the Rs. 1.59L estimate given by the service center.


The point of contention is that the insurance company is not considering assessed repair cost for the total loss decision, but the amount payable by them in that assessed repair cost, which in this case is Rs. 91,000

Is that estimate including depreciation ? I think that is the full estimate. They calculate depreciation and the plastic part value hit and then arrive at the value payable by the company. If that 1.34 L is including depreciation , then you have a case. It is basically based on their liability and not your liability.

[ghodlur]

Originally Posted by padmrajravi

The decision to go for total loss or repair is based on the surveyor assessment and not based on the estimate provided by Garage. Service center can give you any estimate , the insurance company will always go by the surveyor estimate which will include depreciation also. I am afraid , there is nothing much that can be done here. Only thing you can contest here is the method surveyor used to get to the estimate.

Its not completely correct. Surveyor is not a competent person to assess the damage, he will have to rely on the workshop's assessment. It has to be mutually agreed between Surveyor and Workshop. If there is a huge discrepancy in the assessment then some party is grossly wrong. In such cases, Insured can request for a second surveyor assessment to be done. But here it looks like the Insurance co has decided to not honor the Total Loss case.

https://economictimes.indiatimes.com...6.cms?from=mdr

[hserus]

Originally Posted by padmrajravi

The decision to go for total loss or repair is based on the surveyor assessment and not based on the estimate provided by Garage. Service center can give you any estimate , the insurance company will always go by the surveyor estimate which will include depreciation also. I am afraid , there is nothing much that can be done here. Only thing you can contest here is the method surveyor used to get to the estimate , but those are ussually based on documented rules and depreciation percentages.

Your best way to go is to enquire on what basis the surveyor has assessed it. It could well be that the Honda dealership is padding costs or has used a different method of repair than what the surveyor estimates will be used.

Ideally you should have got a copy of the surveyor's detailed report as well showing a breakup of what specific repairs instead of just parts and labour. If you don't have it, feel free to request it from the insurer.

Insurance companies are used to dealerships / garages padding estimates so they will generally go by the surveyor's assessment rather than any invoice submitted by the dealership.

[padmrajravi]

Originally Posted by ghodlur

Its not completely correct. Surveyor is not a competent person to assess the damage, he will have to rely on the workshop's assessment. It has to be mutually agreed between Surveyor and Workshop. If there is a huge discrepancy in the assessment then some party is grossly wrong. In such cases, Insured can request for a second surveyor assessment to be done. But here it looks like the Insurance co has decided to not honor the Total Loss case.

https://economictimes.indiatimes.com...6.cms?from=mdr

Yes, That is what I mentioned in the last line of the post. Only thing you can contest is the surveyor assessment. Not the rule. The rule says total loss or not is based on surveyor assessment of liability to company - Which includes depreciation.

[ghodlur]

Originally Posted by padmrajravi

The rule says total loss or not is based on surveyor assessment of liability to company - Which includes depreciation.

Sorry I don't understand it. The total liability of the Insurance co here is the IDV i.e 1.62L. Also this value has been arrived based on the depreciation, hence no further depreciation would be applicable. Check out any Insurance policy document, it clearly says the above rule is applicable for the vehicles over 5 yrs of ownership.

So the estimate repair costs in any case exceeds the 75% of liability of the Insurance co i.e 1.21L. Hence this is a classic case of total loss and should be honoured by Oriental which they are shrugging off.

[ashwin.terminat]

Originally Posted by padmrajravi

Is that estimate including depreciation ? I think that is the full estimate. They calculate depreciation and the plastic part value hit and then arrive at the value payable by the company. If that 1.34 L is including depreciation , then you have a case. It is basically based on their liability and not your liability.

Originally Posted by padmrajravi

The rule says total loss or not is based on surveyor assessment of liability to company - Which includes depreciation.

Nope. That estimate does not take depreciation into account. And how liability a question here at all? Since the law mentions is is aggregate cost of repair?

From a Consumer Court ruling against Oriental: https://indiankanoon.org/doc/180217210/

the District Forum overlooked the fact that repair cost of Rs.6,32,202/- was clearly beyond 75% of the IDV and, thus, the instant case fell within the ambit of total loss of the vehicle

The insurance liability isn't a factor to be considered at all. It is just the total repair amount.

Originally Posted by hserus

Ideally you should have got a copy of the surveyor's detailed report as well showing a breakup of what specific repairs instead of just parts and labour. If you don't have it, feel free to request it from the insurer.

I did get this from Honda and I have attached the assessed damage summary in the opening post as well. The one with the 1.34L lakh something scribbled.

Originally Posted by ghodlur

So the estimate repair costs in any case exceeds the 75% of liability of the Insurance co i.e 1.21L. Hence this is a classic case of total loss and should be honoured by Oriental which they are shrugging off.

Again, how is insurace liability a factor here? Since no Terms and Conditions document I had read mentions this.

[padmrajravi]

I understand your frustration. But sadly , this is the way PSU insurance companies decide whether it is a total loss or repair. IDV is their total liability calculated after depreication. When there is an accident , they first calculate the estimate of repair ( Not considering depreciation or IDV ) . Then they subtract the depreciation of part involved and the plastic parts value to arrive at their liability in that particular accident. If that value is less than 75 percent of IDV they go for repair. I am assuming that 1.34 L is not including depreciation. Please check with them if that is the case.

My sister works for a competitor of Oriental . Another PSU general insurance company. And they decide it the same way. I can not say whether it is right ot wrong or as per the terms and conditions , but this is the way it happens.

[AnInternetUser]

Is it not possible to cite safety issues? Considering the degree of damage it will almost certainly affect the car's structural rigidity and you could claim that this is a safety hazard hence total loss would be the better option. Since the insurer is not cooperating perhaps raise this with the consumer court or ombudsman?

[hserus]

Originally Posted by AnInternetUser

Is it not possible to cite safety issues? Considering the degree of damage it will almost certainly affect the car's structural rigidity and you could claim that this is a safety hazard hence total loss would be the better option. Since the insurer is not cooperating perhaps raise this with the consumer court or ombudsman?

My guess is the service centre quoted for a full body shell replacement and the surveyor is offering to replace only the side shells and tinker the roof. You need to dispute this.

[deehunk]

Since your car is a discontinued model and over 5 years, you have a chance to contest their decision.

[ashwin.terminat]

Originally Posted by padmrajravi

I understand your frustration. But sadly , this is the way PSU insurance companies decide whether it is a total loss or repair. IDV is their total liability calculated after depreication. When there is an accident , they first calculate the estimate of repair ( Not considering depreciation or IDV ) . Then they subtract the depreciation of part involved and the plastic parts value to arrive at their liability in that particular accident. If that value is less than 75 percent of IDV they go for repair. I am assuming that 1.34 L is not including depreciation. Please check with them if that is the case.

My sister works for a competitor of Oriental . Another PSU general insurance company. And they decide it the same way. I can not say whether it is right ot wrong or as per the terms and conditions , but this is the way it happens.

I've raised an issue with IRDA - let's see what the say. Since there are many articles out there that say it is based on the total repair cost and not the insurance payable. In fact, I could not find any article that said total loss is based on insurance payable.

Originally Posted by AnInternetUser

Is it not possible to cite safety issues? Considering the degree of damage it will almost certainly affect the car's structural rigidity and you could claim that this is a safety hazard hence total loss would be the better option. Since the insurer is not cooperating perhaps raise this with the consumer court or ombudsman?

I'm not sure if that level of logic works with these people. I mean, the terms and conditions are quite clear and so is the judgment passed by the Consumer Court. If they are not willing to accept things that are so objective in nature, I'm not sure they will fare better with subjective matters. The Consumer Court is the option after the Ombudsman.

Originally Posted by hserus

My guess is the service centre quoted for a full body shell replacement and the surveyor is offering to replace only the side shells and tinker the roof. You need to dispute this.

The SVC said they would replace the roof. The surveyor has cut down costs on paint to the tune of 20%-50%. I presume it is not arbitrary. The insurance company doesn't care about the finesse of the work done, it only cares about completing the work. They must have asked the SVC to reduce the number of coats of some such in order to reduce the costs.

Originally Posted by deehunk

Since your car is a discontinued model and over 5 years, you have a chance to contest their decision.

What can I contest because of the age of the car and the fact that it is discontinued?

A question I have is, can I remove the car from the SVC without affecting the insurance claim? I would rather park it near home instead of pointlessly paying parking charges.