Motor insurance: cashless mode woeful for online buyers

A feud between online vehicle insurance aggregators and service stations has left thousands of people in the lurch as they are forced to pay for costly repairs, despite owning an insurance promising cashless treatment.

T V Srinivasa Murthy bought insurance for his new car from Policybazaar by paying Rs 12,600. When the vehicle met with an accident, the insurer Oriental Insurance Company gave him a list of service stations to approach for cashless repair.

“However, I was shocked when I was told at service centre that they will extend cashless repairs only if the policy is issued by the respective service station,” he told DH, questioning the rationale behind such a stance.

‘Arm-twisting’

Aggregators, who sell insurance with huge discounts, blame the arm-twisting by service centres and vehicle dealers for the general disenchantment over the vehicle insurance policies bought online.

Sajja Praveen Chowdary, business unit head - motor insurance at Policybazaar.com, said the problem goes deeper.

“The issue is not limited to cashless treatment. We have sold over 11.5 lakh insurance policies for private cars and 5% of the customers complain to us about problems faced at service stations,” Chowdary said.

Noting that denial of cashless service has been a major problem, Chowdary said that it amounts to violation of Insurance Regulatory and Development Authority (IRDA) guidelines.

“The dealers and service stations continue to force vehicle buyers to get insurance from the same outlet, which leads to discrimination against policies bought online. This clearly violates IRDA guidelines,” Chowdary said.

Delay in settlement

Managers of two leading authorised dealers in the city, who also provide service, said the problem was mainly due to delay in settlement of insurance bought online.

“Settlement of insurance bought at my outlet happens within a day or two whereas those bought online take 15 days in the case of public insurance companies,” a manager told DH.

Another said private insurance companies settle the claim in three days whereas public companies take more than two or three weeks.

He, however, admitted that insisting vehicle buyers to get insurance locally helps them in meeting targets.

Cashless facility

Sources in Oriental Insurance Company said it had cashless facility with a number of service centres in Bengaluru and the same was extended to insurance policies issued online through the Policybazaar portal.

“Instructions in this regard have been issued to all the surveyors. In case the workshop where the vehicle is repaired is not in a tie-up with us, cashless facility is readily available on request from the insured,” they said and added that individual complaints were resolved in due time.