Sunday, March 27, 2011

CASHLESS MOTOR CLAIMS & GARAGES Inside Storey

INDIAN Insurance companies luring the customers with loud words 


ZERO TENSION CAR INSURANCE

CASHLESS FACILITY FOR YOUR CAR INSURANCE

All motor policies are guided by the terms and conditions and every insurers policy wordings are similar , however a clever slogan and service provided by indirect means are really attracting large number of customers to the insurers giving such slogans.At present almost all the insurers are singing in the same tune. The customer should however know the inside story of such facilities being given to him and should be aware of his legal rights and thereby should be able to avoid any cheating by inter-mediator.


ARE CASHLESS FACILITIES REAL ?

A big NO is the correct answer, but still the customer is getting benefit out of such proclaimed quotes by the garages and the insurers.

HOW IT WORKS

Customer approaches the preferred  garage of the insurers and gives details of his loss to the garage and submits the documents with the garage and all the formalities of lodging the claim with insurers, appointment of surveyor loss assessor or insurers in-house inspector , survey of vehicle and finalization of the claim is handled by the garage. Even the settlement is negotiated by the garage on behalf of the customer. Customer however has to pay the garage the deductibles like deprecation , excess clause applicable under policy and for the labor and spares not allowed by the insurers.

Customer feels happy that he had to pay very small amount for which he had to bear anyway and further the claim has been settled hassle free and saves his own time and energy.

CUSTOMER SHOULD BE VIGILANT

Every part of the above is fine and in the interest of the customer, but unaware customers are many times being cheated by the workshop / workshop personnel even without the knowledge of the insurers and in some cases even by workshop owners.

Since the customer does not know the settlement arrived at between the insurers and the garage, and relies on the depreciation calculated and charged by the workshop which in many cases may be more than the what customer had been liable and what the insurers had settled.


Another key area is salvage value deduction by the garages. Almost all the garages deduct for salvage value of the parts replaced from the customer also and the salvage remain with the garage and thereby garages get benefited for the same. Such value is generally 5% of spares costs. In fact as per the general agreed conditions by the preferred garages is that they will retain the salvage and 5% of the salvage value will be deducted and the garage will recover the same by disposal of the said salvage and no where it is conditioned that the salvage value is to be recovered from the customer. The Garage may deduct the same only in cases where the owner takes possession of the salvage.

Towing & Recovery Charges  ...... Many a times customers use the services of recovery vehicles and for towing the damaged vehicles to the workshop and thereby as per policy are entitled for up-to maximum limit set for the said services. The customer has to submit the bills of said services obtained with the garages to be further submitted with the insurers, but at time of finalization of customers liability, the garages do not reduce the said entitled amount to the customer and only very vigilant customer point it out and get the said amount adjusted.

Customer should always demand for a proper receipt for the amount paid by him to the Garage falling under the insurance claim lodged and should also try to obtain the details of calculation carried out by the Garage. They can later check with the surveyor loss assessor or the insurers for the details of his claim settled and same should be in relation to the amount paid by him to Garage. In case they find they had been overcharged by the garage they cam lodge complaint with the insurers and garage and recover any excess amount charged by the garage.

HOW THE ACTUAL SYSTEM WORKS FOR CASHLESS MODE OF SETTLEMENT 


Insurers are on their part are not giving and cashless service in reality. In actual the cashless facility is being given by the garages and it is their discretion to extend the facility to the customer. They provide the cashless facility to the customers in actual on voluntary basis. They follow the claim procedures laid down by the insurers and charge the part payment from the customer ( customers share on account of depreciation, excess clause etc) and the balance insurers liability is claimed from the insurers by following the proper procedure including survey and assessment and even negotiations. In case the liability is disowned  by insurers on account of discrepancy in claim documents or violation of policy terms and conditions at time of final settlement of the claim, the garage is at loss and the garage thereafter may or may not recover the said loss amount from the customer. Mostly the same will be bad debt only.

THEN WHY THE GARAGES SEEK FOR SUCH PREFERRED GARAGE STATUS WITH EVERY INSURERS

The preferred garage status gives many competitive business edges to the garages and few of them are marked as


  • The preferred garage status brings more jobs for them as every customer wants cashless service and like to get the repairs carried out at such preferred garages.
  • The preferred garage status allows workshops to negotiate and make deals with the insurers for settled labor and painting charges and thereby benefit. Also since the depreciation  etc are not applicable on labor charges, thereby the customer does not questions about the charges being charged nor seek any discount from the same. In general repairs( Non cashless cases) it is customary for the customer to seek some discount for the labor and painting charges and the garages have to oblige with some discounts to satisfy the customer for better business prospective.
  • With preferred status many a garages are utilized by the insurers for seeking insurance policies and thereby the garages give insurance business of new and renewal to the insurers and in turn earn commission on policies. This allows the garages to earn more and to provide all services to their customer under one roof and thereby the customer remains with them for all his needs.
  • Once a garage is established he is at better position to negotiate with the insurers and always keep the  sword hanging on the insurers at time of negotiations with threat that in case his demands are not met he will shift the insurance premium to another insurers who are always ready at his doorsteps. The insurers weakness is due to their laziness and the market trend that every one is looking to make arrangements for preferred garages.
  • One major contributor for the kitty of preferred garages is that they can lodge the claims on behalf of the customer. The vehicles coming to garage for routine jobs contribute for additional jobs also. How ? ........ A vehicle coming for say servicing is inspected by the workshop personnel and a minor accidental job is noticed and they inform the customer of the same. In normal circumstances the customer may not claim for the same, but the garage suggests for lodging claim and assures that the same will also be repaired in same time as for normal job and since the job will be hassle free the customer mostly will consent and thereby the garages create additional job for themselves. Some may say that it is just a perception and nothing more, still it has its some bearings.
  • The above are normal benefits for the preferred garages and there are many more hidden benefits thereby luring the garages for seeking preferred garage status. Garages with moral hazard are also there and is difficult to identify as they work very secretively and cover their tracks. 
With so much benefits the garages do take the risk of loosing some amount in some cases which are denied by the insurers, but mostly such cases are also finally settled by the insurers in interest of their own business and very few remain unsettled.

The views expressed are for information purposes only and customers having experienced any such case may share the same for information of others.