How to claim insurance in times of natural disaster

How to claim insurance in times of natural disaster

Natural disasters like the one unfolding in Uttarakhand takes a big toll on human life, property and the survivors. Many a times, insurers relax the norms for settling claims.

  • July 9, 2013  
  • |  
  • UPDATED   10:32 IST

The death toll in the devastation in Uttarakhand could eventually far exceed the number of bodies found. The flash floods would have swept away many, while many would be buried under the rubble, never to be found. Most of them would be eventually pronounced as 'missing'.

In an effort to partially alleviate the pains of survivors and the next of kin of those 'missing' in the aftermath of the calamitous flash floods in the hills the Finance Minister, P Chidambaram, on Tuesday asked the country's largest life insurer - the government-owned Life Insurance Corporation, or LIC - not to insist on the usual condition that requires the passage of seven years in case of missing people before death certificate is issued.

Addressing an LIC function, Chidambaram said that the public sector insurer can get an indemnity bond from the claimants in such cases and the claims may be settled on priority and asked it to constitute a special team to settle claims of those affected in a centralised basis.

The cases where there is no physical proof of death, claims settlement process may take many years.  "For missing cases, as per the provisions of section 108 of Indian Evidence Act, presumption of death can be made only after a lapse of seven years from the date of a person being reported missing. After the lapse of seven years, the nominee or legal heir has to submit the FIR and non-traceable report issued by police authorities along with the court order (presuming the death of the person) for settlement of claims, along with other necessary documents required for deceased claim settlement," says Vishal Chopra, Executive Vice President & Head Operations, DLF Pramerica Life Insurance. This has to be supported by other necessary documents required to process a deceased claim.

While LIC might heed the Finance Minister's directive of not sticking to the seven-year period, private sector insurers might hasten the process only if there is a declaration from government of the missing being "presumed dead". "If the government announces a person is 'presumed dead' then the company would supersede the usual claim procedure and settle such claims much faster," says Chopra.

"Generally a Death Certificate from municipal authorities is required. However, in this case, we will accept the list issued by hospitals or that issued by police / armed forces in case a municipal death certificate is not available," Kalpana Sampat, Chief - Branch Operations, Underwriting and Claims, ICICI Prudential Life Insurance. Since the dust has not settled on the tragedy in the hills, most companies have not received any claims. However, some have already constituted special cells to take care of such cases. "In August last year when where flash floods in Leh-Ladakh region, our company proactively reached out to the victim families and settled quite a few claims. However, civilian movement is still restricted in the Uttarakhand region and it is therefore it is difficult for us to reach these people," says Sampat of ICICI Prudential.

Documents that are generally called for missing persons claims include
  • Claimant's statement form signed by the nominee or legal heir
  • Copy of FIR
  • Copy of the missing person report filed with police
  • Original policy contract document or indemnity bond
  • Copy of death certificate
  • Court order presuming the person as dead after the lapse of seven years
  • Succession Certificate (in case of no nomination or nominee being dead)
In the meantime, the claim care helpline is active round the clock. "We have released alerts to all our service locations in close proximity to the affected areas. Also, we have reached out to our policyholders in the affected areas to connect directly with our help line numbers for any assistance. This would continue till the situation stabilizes," says Chopra.
Alongside the loss of life has been huge destruction of personal property as well. The claims procedure becomes difficult as the policy documents won't be available in most cases.  

"The surveyor may rely either on other documentary evidence of existence or ownership like the sale deed in case of property or physical evidence at the scene to access the loss," says Amarnath Ananthanarayanan, MD & CEO Bharti AXA General Insurance.

Cases where the house or vehicle has been completely washed will be categorised under 'complete loss' and full sum insured will be claimable, otherwise, the surveyor will put the case under partial loss and one will get refund for repair or reinstatement. Regular deductibles will apply as in case of jewellery and domestic appliances (usually up to 20% of contents sum insured).

If one survives the calamity, there might be need for medical care, which in the immediate aftermath may be funded by the government. However, there may be situations when one may not receive assistance from the authorities. In such situations, if the insurance documents are not available or the policyholder gets treatment in a non-network hospital, one can always take the reimbursement route when the insured recovers.

"In emergency situations, we are liberal and proactive. In the past, during the Mumbai floods, there were cases where policyholders had lost their documents, but claims have been processed without any hassle on the basis of policy numbers and basic verification documents," says Antony Jacob, Chief Executive Officer, Apollo Munich Health Insurance.

The claims are processed in the same way as it would be in a normal situation; that is, the customer has to pay the bill and then send in the claim for reimbursement up to the level of sum insured, for the medical expenses incurred. Therefore original medical bills will the proof for getting any reimbursement. "It is only in the case of a personal accident that a claimant is advised to produce a government issued death certificate for verification," adds Jacob.