Drive away from flood damage woes with expert tips to claim car insurance

The recent torrential rains in Himachal Pradesh, Uttarakhand, Delhi, and Gurugram have resulted in devastating floods, causing significant damage to lives and properties. As the affected regions deal with the aftermath, general insurance companies are preparing themselves for an influx of claims. While the full extent of the damage is yet to be determined, insurance experts believe that the impact on car insurance claims may be substantial, while home insurance claims are expected to be minimal due to low penetration rates.

According to media reports, approximately 50-55 claims have been received from car owners so far. Since the heavy rains occurred over the weekend when fewer people were likely to venture out, the number of claims may be limited. However, the situation is still being assessed, and a clearer picture is expected to emerge in the next two to three days.

How to claim car insurance? 

Sanjeev Kumar Rout from National Insurance Company explained that insurers and original equipment manufacturers (OEMs) reach an agreement on the quantification of loss based on the level of water submergence. 
"If the water reaches the dashboard level or higher, the vehicle is considered a total loss. High-end vehicles may have electronic parts located at lower levels, which affects the assessment. The policyholder is then paid the IDV minus the excess or compulsory deductible," he said.

In the case of cars that have been swept away or extensively damaged by floods, insurers typically treat such incidents as total loss cases. If the cost of repairing the vehicle exceeds 75 per cent of its insured declared value (IDV), an amount equal to the IDV is paid out. For repairs costing less than this limit, the insurer covers the repair expenses. "In situations involving severe damage, insurers may consider additional parameters such as the level of water submergence to determine if it qualifies as a total loss," he added.

To file a claim, an FIR (First Information Report) and a police investigation are usually necessary. However, if the insured car has been swept away and cannot be located, insurers may require a non-traceable certificate issued by the police after investigating the circumstances surrounding the disappearance of the vehicle during the floods.

Amit Gupta from SAG Infotech suggested going through your coverage. "Review your car insurance policy to understand what type of coverage you have. Typical coverage that may apply in a flood situation includes comprehensive coverage, which covers damage caused by non-collision events such as floods," he said.

Besides the physical damage caused by floods, the claim settlement for car insurance takes into account the depreciation of parts. However, policyholders who have purchased a zero-depreciation add-on will receive the actual value of the parts without depreciation deductions. Additional add-ons such as engine protection covers and consumable covers can also prove beneficial in such situations.

There is also a growing trend of innovative add-ons such as pay-as-you-drive and motor floater covers. However, the terms and conditions of these add-ons vary among insurers. If the pay-as-you-use coverage was deactivated at the time of the incident, coverage for that period may not be applicable. Policyholders are advised to inquire with their insurance provider regarding individual policy clauses and coverage details.