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SC wants insurance firms to develop app for accident claims — what it is & how it’ll help

SC asks General Insurance Council to develop a mobile app for settlement of claims in road accident cases. ThePrint explains how it will speed up the disposal of compensation cases.

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New Delhi: Last week, the Supreme Court fixed a two-month deadline for the General Insurance Council (GIC) to develop a mobile app for speedy settlement of third-party claims for compensation in case of road accidents. Police would have to upload the details of the accident on the app within 48 hours of it taking place. 

The police must then file a detailed report within 90 days. After this, insurance companies would have 30 days to compensate the claimant with a fixed amount, or else fight it out in court.

A bench led by Justice Sanjay Kishan Kaul rejected GIC’s plea for “some enlarged time” to develop the app, saying that if the insurance companies are not able to do it, the court would call upon the government to do so, and impose the app on the insurance companies.

The top court order of 16 November is an outcome of 10-month-long deliberations on how to expedite cases of compensation pending before the Motor Accident Claims Tribunal (MACT).

In its order, the court noted that the bulk of MACT cases were pending in various MACT courts across the country, with more than 25 per cent being over three years old. Thirty-five per cent of all cases pending in Maharashtra’s trial courts are insurance claims arising from motor accidents, the order also noted.

Following an earlier order issued on 26 October, all stakeholders such as the police, insurance companies and MACT courts will have to use the application once it is developed.

ThePrint explains how this app will speed up the disposal of compensation cases.


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Two provisions of Motor Vehicles Act

A third-party insurance claim can be filed invoking two provisions of the Motor Vehicles Act, 1988: sections 166 and 163A.

Under section 163A, there is a straitjacket formula for compensation with no provision to contest such claims. While Rs 5 lakh can be demanded in case of a death, Rs 2.5 lakh is the fixed amount paid in case an accident causes permanent disability.

Although this is a speedy process for settling compensation claims in accident cases, victims and their families don’t usually opt for it due to the ceiling fixed on the claim amount.

Experts working in the field of MACT cases told ThePrint that victims and their families demand higher compensation, for which section 166 applications are filed. Such claims are usually contested by the insurance companies, leading to a trial as in a civil case.

“Compensation sought under this provision is calculated on the basis of factors such as the age of the victim, his or her income, and number of dependents. With younger victims and higher incomes, the compensation can go up to crores,” explained a lawyer.

The claimants in MACT cases, who generally don’t come from affluent backgrounds, tend to take their time to file claims.


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The new app

The new app will, however, make it compulsory for the police to upload the details of the accident within 48 hours of it taking place. This information will immediately be fed into the system of the insurance company with which the offending vehicle is insured, and also the MACT court in whose jurisdiction the accident takes place.

After this, the police will be required to produce the claimant before the MACT court within 90 days, along with a detailed accident report. This would include documents such as the charge sheet, the victim’s profile, information regarding the claimant, and proof of the victim’s income and their dependents.

A GIC official, on condition of anonymity, told ThePrint: “These documents can even be uploaded on the app before the police take the claimant physically to the court.”

He explained that the objective of developing the app was to do away with the paperwork in the current procedure. “Once an accident is reported, the police have to send a notice under the Motor Vehicles Act to the owner of the vehicle and to the insurance company for their responses. This is a time-consuming process, but the app can do away with it all.”

The app will be connected to three digital databanks: Vahan, the databank of vehicles, Saarthi, that of drivers’ licences, and the Insurance Information bureau, a body of insurance companies under the Insurance Regulatory and Development Authority. This means that the police will no longer have to reach out to the owner or the insurance company individually. Once the vehicle number is fed into the app, it will automatically throw up results on them.  

“The app will help the police save a lot of time that is otherwise spent finding whether or not the owner’s driving licence and the vehicle’s insurance are valid,” the officer said.

He added that the police’s detailed action report will now be treated as the claim petition, making it no longer compulsory for the claimant to file a separate application.

No more fake claims

Once the police file their detailed accident report, the insurance company will have 30 days to settle the matter by offering a fixed amount to the claimant, or else it can fight out the case.

“Since the insurance company would be fed information about the vehicle long before the matter reaches court, it cannot give excuses to drag it out,” the lawyer said.

With the onus now on the police to upload details of the accident on the app, the lawyer added, the fake claims that tend to be filed in smaller cities will stop. Recently, he pointed out, the Supreme Court took note of such a scam involving lawyers in Uttar Pradesh that led to the suspension of a few advocates there.

“Currently, there is no mechanism to inform the MACT or insurance company from the spot. This gives leeway to the police to keep probing the incidents. In many cases, it has been found that lawyers connive with the police to lodge false claims,” the lawyer said.

In such cases, he claimed, the police impound a vehicle that they have already seized in connection with another crime, and file documents before the MACT court. Eyewitnesses are also planted to support the police theory, resulting in the MACT directing insurance companies to pay up.

(Edited by Rohan Manoj)


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