Now Reading: Insurers face higher motor third-party costs after SC rulings
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Insurers face higher motor third-party costs after SC rulings
Non-life insurers are tightening efforts to curb motor third-party fraud and increasing claim provisions after recent Supreme Court rulings. Go Digit General Insurance secured a Madras High Court order on July 29…
The Story in Brief
Non-life insurers are tightening efforts to curb motor third-party fraud and increasing claim provisions after recent Supreme Court rulings. Go Digit General Insurance secured a Madras High Court order on July 29 for a special investigation team in Tamil Nadu to probe fake accidents, forged policies, and false medical reports. Industry executives say fraud is becoming widespread, adding pressure to a strained segment.
The Supreme Court's June ruling in the Shishu Pal case fixed a notional monthly income of Rs 30,000 for homemakers in motor accident claims. Insurers estimate the impact could raise claim outgo by 3-4% initially, rising to 10-12% over 12-18 months. ICICI Lombard made an additional Rs 165 crore provision in the June quarter. Third-party premiums have grown less than 2% annually, while claim costs keep rising.
The Indian Opinion
The narrative that courts are only helping victims misses the mounting strain on insurers and honest policyholders. Fraud and higher payouts both push premiums up, yet enforcement of mandatory insurance remains lax. The test to watch is whether IRDAI's standardisation of occupant cover brings clarity or another round of court battles that delay claims further.
Sources (2): timesofindia.indiatimes.com, economictimes.indiatimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
