The central government has directed insurance companies in Maharashtra to settle well over 20,000 claims in a week. Private insurance companies said this would be an impossible task given the magnitude of the disaster and the number of claims coming in daily.
"Most large corporate companies will take a week or two to identify the size of claims. Till then, we are making on account payments of 50 to 70 per cent of the likely loss amount," said Kamesh Goyal, CEO Bajaj Allianz General Insurance.
He said that it would take a minimum of two to three weeks for motor claims to be serviced, as work stations are today segregating large and small claims. "We are working with auto manufacturers to expedite the settlement of claims," he added.
Tata AIG General Insurance Company is trying its best to settle claims at the earliest. "We will see that once a claim gets reported, it is settled in a week's time," said K K Mishra senior vice president (claims), Tata AIG General Insurance Company.
Competition is so stiff in the insurance sector that players will do their best to push service and settle claims at the earliest. "When a calamity strikes, priority moves to be with the existing customer as insurance companies transfer people to Mumbai to deal with the crises," added Goyal.
Car service stations however, estimated that it would take at least three to six months to service and repair damaged vehicles on account of the flood.
"We do not have adequate room at our service stations across the city and there are at least 3,000 Maruti cars stranded on Mumbai roads today," said a Maruti service centre chief.
Mishra said that in the case of major loss to vehicle owners, "we are ready to make on account payments depending on the size of the loss. To date however, we have not received any."
Tata AIG believes that with its own surveyors, it will not take much time to settle claims. The private insurer has estimated claims to the extent of Rs 100 crores (Rs 1 billion), of which about 75 per cent is expected to come from the corporate sector.
Even as private insurance companies are offering cashless settlement of motor insurance claims, the damage caused to some garages on account of the floods has affected the speed of repair work, said Kartik Jain, head marketing, ICICI Lombard.
The Maharashtra state government has asked public sector general insurance companies to prioritise settlement of claims, and set aside the routine formalities. In settling claims, insurance companies will have to accept papers provided by the revenue department or the police.
Private insurance companies have asked customers to ensure proper documentation in terms of pictures of their office premises and home belongings affected by the floods.
"We are telling customers to document their goods and not throw things away in order to avoid fudging of claims," said Goyal.
Like most private insurers, ICICI Lombard General Insurance has made on-account payments of 10-30 per cent of the estimated loss prior to the completion of the claim survey.
"This will help provide liquidity to our customers," said Jain. ICICI Lombard has received around 1,000 claims, aggregating to Rs 85 crores (Rs 850 million). Majority of these loss are from corporates.
"We are contacting the motor vehicle owners for shifting the vehicles to selected garages for immediate repairs. Our team has also been proactive in contacting many of our corporate clients directly to enquire and assist in claims intimation and settlement," said Antony Jacob, managing director, Royal Sundaram Alliance Insurance.