1. It has been that large number of claims are repudiated because of discrepancy in physical address on value at risk in claim form. In many policies, the bank writes the address of residence mentioned in the Aadhar Card as value at risk at the time of providing loan. When the claims are lodged, the insured mentionsthe address of risk different than given in the policy. When the surveyor does not find the damaged property on the address mentioned in the policy bond,he concludes the claim as noclaim in the first instance.
a) The reason of above differences is because of wrong filling of proposal form by the outsourcing agent of the Bank. The agents often visits casually, and completes the proposals without physical verification of the risk as well as without consulting the insured. The Bank is also not obtaining consent or signature by the insured on proposal form.
b) Many times insured is having more than one warehouse. The address of all warehouses covered are not mentioned in the proposal form and at the time of claim, it gets rejected.
c) Many times insured is taking policy under Cash Credit Loan(CC) of godown only, whereas the policy is being issued on address of the shop.
d) Many times insurance policy are based on stock value against which loan has been taken + 25%, whereas actual cost of stock held by the insured is many times more. In large number of claims, insuredsuffers huge under insurance and gets negligible value of the claim. This is also happening because insureds are not being consulted at the time of deciding the Sum Insured and the policy is being issued based on his loan value only.
2. The bank is not providing copy of Insurance Policy to Insured and due to ignorance of the policy condition it leads to delay in intimation and rejection of the claim also.
3. Hence in my opinion following steps should be taken urgently:-
- Proposal form should be compulsorilysigned by the insured after filling it properly.
- The Agent must visit the premises and must complete the claim form by physical verification of shops, godown, warehouse.
- The Agent should also verify the required documents e ownership of the premises rent receipts and other details as per policy.
- The agent should also verify the fire fighting facilities and other safety norms required as per proposal form. It must be taken as declaration by insured in proposal form.
- The photograph of the shop or godown or warehouse must be taken by the agent and be uploaded with the proposal form.
- The size of the shop and other relevant details, including specification of the building and the shop, must be declared in the proposal form.
- The proposal form is not comprehensive hence there should be provision of supplementary information about the risk inspection of the building either submitted by the inspection report of Insurance Surveyor or self declaration by the insured because all the policies within 50 crores under Bharat Laghu Udyam policy and Bharat Small Udyam Policy and Bharat Griha Raksha Policy are reinstatement basis policy and there is choice of rate of construction of the building and many other facilities for Insured.
- The Banks currently does not have any awareness meeting with insured and surveyor. There should be annual provision for the banks to organize one small interactive programme with the Surveyors, Insured and agents about changes in the policy, rate of premium and terms & condition etc. The cost should be beared by the agents or banks as per IRDAI Act 2000.
- The bank usually collects the standard rate of premium for the company which has tie-up with the bank. Whereas as per market practice there are provisions of discount. Banks do not compare the rate, and consequently collect the highest rate from the insured. They are deducting the money from the bank account without information to insured.
In Bancassurance there should be more transparency about the product being sold, premium charged and proper coverage of assets. This effort will prevent misselling and help to reduce dissatisfaction of insured and rejection of claims. Selling of General Insurance products needs technical expertise and knowledge about product. Our penetration is still very low and if the confidence of customer is eroded it creates a ripple effect.
