One would typically need a comprehensive insurance, as this is the only form of insurance that reimburses you in the case of car theft
In June, Rohit Mehta’s (name changed) car was stolen while he was participating in a marathon at Bandra Kurla Complex, Mumbai. Car theft is a problem that hassles every city in the country. Delhi has become the capital of India in terms of car thefts as well. According to Delhi police records, the number of car thefts increased from 36,702 in 2016 to 39,080 in 2017 and has been steadily rising. Mumbai sees 10 cars thefts on an average every day. Most of the stolen cars are not recovered, leaving car owners stranded.
After a couple of weeks, Mehta’s claim to the insurance company for his stolen car was rejected. “My insurance claim was rejected stating that I was late to notify the police and the insurance provider after my car was stolen. Also, there were discrepancy raised by the insurance company in the supporting documents submitted,” he explained. Often insurance buyers suffer when claims gets rejected due to lack of knowledge. Here is the procedure to claim insurance when a car gets stolen from industry experts.
Immediate steps to follow after a car is stolen
Amitabh Jain, Head – Motor & Health Underwriting & Claims at ICICI Lombard, said, “If the car gets stolen, a person should immediately report the theft to the nearby police station and lodge an FIR. After this, the insured should inform about the theft claim to the insurance company and lodge a claim.”
Brijesh Parnami, Executive Director & CEO at Essel Finance Wealth Services, said, “Most car insurance providers have a time limit for the same as mentioned under the terms and conditions of the insurance policy. So, read it carefully while purchasing motor insurance.”
A person should immediately gather all original vehicle documents, set of original keys and keep it ready to submit it to surveyors appointed by the insurance company.
Purchase a comprehensive car insurance policy
Make sure that your insurance policy covers theft of the insured vehicle when you purchase it. Navin Chandani, Chief Business Development Officer, BankBazaar.com, said, “You would typically need comprehensive insurance as this is the only form of insurance that reimburses you in case of car theft. Comprehensive insurance is optional and you should verify with your insurance provider that your policy does include this coverage. All the gadgets that you have installed in the car may require a separate add-on cover and may not be covered under the comprehensive policy.”
In case of car theft, the insurer is supposed to pay the insured declared value (IDV) of the car to the owner. Animesh Das, Head of Product Strategy, ACKO General Insurance, recommends selecting the right IDV of the car at the time of purchase.
Steps to be taken to claim insurance when a car gets stolen
Devendra Rane, Founder and CTO, Coverfox, lists certain important steps to claim an insurance when a car gets stolen:
i. First Information Report (FIR): The policyholder after informing the insurer about the theft of the vehicle must lodge a First Information Report (FIR) with the nearest police station immediately. There should not be any delay in completing this activity. The owner must also procure a copy of the FIR, which is of utmost importance in processing the claim.
ii. Claim form: The policyholder should then visit the branch of the insurer or contact the customer service centre of the insurance company and fill the required claim forms. The latter should be supported with documents like:
– Insurance policy document
– Photocopy of driving licence
– Photocopy of registration certificate book
– FIR copy in original, etc.
iii. Intimation to the Regional Transport Office (RTO): The insured must also inform the local RTO office where the vehicle was registered through a letter addressed to the RTO informing them about theft of the vehicle.
iv. Approval and settlement: The policyholder then needs to collect the ‘Non-Traceable Report’ from the police station and submit the same to the insurer. On receipt of this crucial report from the police, the insurer approves the claim and directs the owner to transfer the stolen vehicle in the name of the insurance company. The insured must transfer the registration certificate through relevant forms such as form 26, 28, 29, 30 and 35 along with all sets of original keys, car purchase invoice and a letter of subrogation to the insurance company.
v. Reimbursement: The amount approved as per the surveyor’s report will be paid within seven working days to the insured. One must also note that if the vehicle was purchased on a loan then the insurance company will pay the bank from where the loan was procured.
Why your car theft insurance claim may get rejected?
Das said, “A car theft claim can be rejected if a car with a non-commercial licence is given on rent, for commercial purpose or has an invalid registration certificate.”
Owner carelessness is the other most critical factor leading to outright claim rejection of stolen vehicles by the insurer. Rane explained, “There have been numerous instances where the vehicle owner has shown a lacklustre attitude towards ensuring proper safety of their vehicles. For instance, leaving the windows open or forgetting to properly lock the doors while parking the vehicle and leaving the keys in the ignition with doors unlocked.”
Jain said, “Insurance claim is also rejected if there is a misrepresentation of facts related to theft of the vehicle.”
“If you haven’t transferred the car to your name in the policy copy, especially if you are buying a used car, the policy is considered null and any claims made would be rejected,” Chandani added.
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