Soon, the insurance policyholders will not be faced with rejected claims simply because they have left out some documents. In its latest mandate, the Insurance Regulatory and Development Authority of India (Irdai) said that general insurers should reject no claim for 'want of documents'. Insurance providers have been asked to collect all necessary documents at the time of issuing policies to customers. In addition to this, Irdai has also mandated insurers to roll out a product with a policy duration of less than a year. The product could be with or without extension provisions or periodic review based on specified criteria that may include reported or settled claims.
Speaking on the no claim rejection on the grounds of ‘Want of Documents’, Sharad Bajaj, COO of InsuranceDekho said: “This Irdai circular represents a significant step forward, ensuring that no claim is unfairly rejected due to missing documents. It provides much-needed relief to customers, guaranteeing uninterrupted claims processing and enhancing transparency in the insurance sector. This move by IRDAI promotes customer trust and reinforces the commitment to fair and prompt claim settlements, ultimately benefiting policyholders across the board.”
“The customer may be required to submit only those documents directly related to claim settlement,” the circular stated. This move comes as a huge relief for insurers who have ever fretted over claim rejections due to insufficient documents. This is what Irdai’s new mandate means for you:
No Rejections Over ‘Missing Documents’: Even if you have not handed in a specific document, your claim(s) won’t be turned down by the insurer. But wait, this doesn’t mean you don’t have to submit the necessary and crucial documents.
Remember: The Insurer is supposed to collect all the necessary documents/papers from you at the time of issuing the policy. So make sure you turn in the authentic and all required documents to your policy agent when you are purchasing the policy.
Documents Required For Claim: In the event of filing a claim, you have to produce basic documents/paper including driving licence, permit, repair bills (only in cases where cashless is not available), FIR, etc., which are directly related to your claim.
Irdai in its circular stated: “Necessary documents, such as the claim form, driving licence, permit, fitness certificate, FIR, untraced report, fire brigade report, post-mortem report, books of accounts, stock register, wage register, and repair bills (only in cases where cashless is not available), will be requested (by the insurer) at the time of claim settlement.”
Reasons For Claim Rejections: As per the new rule, your claims cannot be rejected if the breach of policy conditions is irrelevant to the loss. The regulator has said that the delays by the policyholder will not be considered valid grounds for rejection of claims unless they increase the loss.
Quick Claim Settlements via Surveyors: You no longer need to worry about the delayed claim settlement. Now, the general insurers also need to assign surveyors through the General Insurance Council’s (GIC’s) tech-based solution within more than 24 hours of receiving a claim report. The assigned ‘Surveyors’ are expected to submit their reports to the insurance company in no more than 15 days. An insurance surveyor would assess losses when an insurance claim is filed.
Irdai has cracked down on the delayed timelines of claim settlement and has mandated that upon receipt of the report by the Surveyor, the company shall settle the claim within 7 days. “Any delays beyond the stipulated timelines would be a violation, subject to penalties,” it said.
This Master Circular is a game-changer for insurance claim processes and simplifies procedures for customers, requiring only essential documents at the time of claim, like FIRs or claim forms. “Irdai is striving to enhance transparency and efficiency in the insurance sector by enforcing strict timelines for surveyor allocation and claim settlement. This would benefit policyholders with smoother and more reliable claim experiences,” Bajaj remarked.
HDFC Life Spokesperson welcomed the Irdai's ‘progressive reforms’ for Life Insurance products. “Measures such as a simplified Customer Information Sheet, training programs, mandatory policy loans to enhance liquidity, introduction of variable annuities, extended free look period, robust processes to address customer grievances, and higher value to customers on early exits should further the Regulator’s vision of insurance for all by 2047,” HDFC Life said in a press release.
“Going further, insurers will also need to work on their quality assessment during the initial onboarding documentation process for policyholders to ensure that no crucial details are missed when processing claims,” Bajaj concluded.
