CHENNAI: If your Insurance policy is above Rs 50 lakh and your insurance company is refusing to pay the amount. Think twice before approaching the Ombudsman as the maximum amount of award by Insurance ombudsman is Rs 20 lakh only.
Nearly seventeen years have passed since the Insurance Ombudsman was set up in 1998, but the ombudsman has yet to be given the power to decide on claims grievance worth more than Rs 20 lakh.
“In 2012, it was decided to increase the maximum amount of award by insurance ombudsman to Rs 50 lakh but it is yet to be implemented,” rues Insurance Ombudsman, Virander Kumar,
“The values have gone up. The world has changed. Now the price of a car is above Rs 20 lakh. An ordinary man is insuring him for above Rs 20 lakh Even some motor vehicle insurance, medical insurance and even personal accident policies are above 50 lakh. But a insured can only seek a claim of Rs 20 lakh from the Ombudsman,” says Kumar.
Interestingly, the consumer courts are there to take up the policies above Rs 20 lakh but they find the cases too technical and Ombudsman is the only body which can handle all these technicalities.
Even some consumer forums have asked the consumers to approach the Ombudsman, says a official with Ombudsman.
Interestingly, the Ombudsman is handicapped in taking up group insurance or fire insurance policy by corporates. They are only eligible to take up individual policies.
However, the redressal of public grievance mechanism has been effective when it comes to Ombudsman. “On an average 61 per cent of cases are settled in the favour of insured and 39 per cent in the favour of the company,” says Kumar.
Interestingly, since 1999, Insurance ombudsman has resolved 2.35 lakh cases and awarded Rs 222 crore as claims, says Kumar.
Interestingly, the biggest fraud in the insurance sector is committed by the agents and Kumar agrees to it. “Most of the complaints we get is related to agents cheating the individual. We forward these complaints to the insurance companies but at times no action is taken against them,” he says.
However, things are going to change soon with the amendment to the Insurance Act. “The Ordinance has been passed but the Act is yet to be published. Once it is effective then the agents would be fined heavily,” says Kumar.