Past claims to be verified, before getting new vehicle insurance


Mumbai: General insurance firms have devised a new mechanism which enables them to cross-check with one another past claims of customers, to track vehicle owners who hide details about their previous claims. Customers often shift to a new insurer at the end of their one-year motor insurance policy, reports Business Line. Those who have not made any claims with their earlier insurers are often granted a 'no-claim bonus' from their new insurer. This consists of a discount in insurance premium. A customer who has not made any claims in the immediate previous year gets a 'no-claim bonus' of 20 percent; a customer with no claims for two consecutive years gets a bonus of 25 percent; for three consecutive years, 35 percent; for four 45 percent, and for five 50 percent. Till now, the new insurer has been demanding only a declaration from the customer stating that he has not made any claims in the previous policy cover. There is no way of verifying these declarations which can often be false, leading to leakage in premium income for insurers. Insurance companies are now trying to plug this loophole. For this, they have come together and created a common email address through which they can cross check with each other claims made by customers. When a customer demands a no-claim bonus from one of them based on the track record, the insurer simply sends an e-mail to this address seeking the customer's past details from the previous insurer. The previous insurer then provides the necessary details. If it is found that the details about past claims supplied by the customer are false then the insurer may refuse to provide him cover. However, industry officials believe that the new mechanism will be more fool-proof if the public sector general insurance players are equally prompt in replying to the mails seeking verification of claims.