General insurers see a surge in claims from flood-hit customers; total value may touch 2015 level

Amid widespread havoc caused by the Michaung cyclone and floods in Chennai and its suburbs, the number of insurance claims may not be substantial this time when compared with the 2015 floods, but value-wise it is likely to be as big as the previous one, according to general insurers.

Record rains and the consequent floods damaged several hundred cars as also factories in Chennai and its neighburhoods in the past few days. As the city is limping back to normalcy, general insurance companies have started seeing a surge in motor claims as flood-hit vehicles have started arriving at workshops and seeking insurance coverage for the expenses.

number of claims

“The number of claims started increasing yesterday. We estimate that all general insurance is likely to get total motor claims of 10,000 plus and another about 1,000 for non-motor claims as per initial indications. So far we have received more than 300 claims and all general insurers put together would have received about 5000 claims. A lot of people are unable to take the vehicles to garages and those claims will come next , N K Sidhu, General Manager, United India Insurance Co Ltd.

M Chandrasekar, Deputy General Manager, New India Assurance felt that overall claims would be lower this time, but value-wise it would be as big as last time or maybe more than last time as inflation and other things should be taken into account.

New India had paid 4,000 non-motor claims and 10,000 motor claims during the 2015 floods. “This time, I think the number of claims in the motor may not be very high. However, we are yet to get feedback from badly affected vehicle-rich areas such as OMR, Velachery, etc. We have so far received 550 claims in motor. This is excluding dealer claims, which are yet to come,” he added.

“The water has started receding, and we’re starting to receive insurance claims. It’s much less than what we have seen before, at this stage. It’s roughly 60 to 70% of the numbers that we have seen before. We’ll have a clearer picture as we get more claim intimations and information. The situation in Chennai is still chaotic, and people mainly focus on caring for themselves,” said TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance.

According to estimates, general insurers took a massive hit of about ₹5000 crore due to claims post-2015 floods with the motor segment accounting for the highest. The total number of claims including all categories received by the general insurance companies then was about 50,000.

Top carmaker Maruti Suzuki India Ltd (MSIL) said the company’s service outlets have reported about 500 flood-hit vehicles in Chennai and 25 vehicles in Nellore, Andhra Pradesh.

“The average flow of MSIL vehicles is uniform and we are not expecting high increase in numbers because even before the cyclone hit, Maruti Suzuki had pro-actively sent out SMS to 7 lac customers on what precautions to take for minimizing damage,” said Rahul Bharti, Executive Director, Corporate Affairs, MSIL.

“We are also working with Tamil Nadu Govt, Guidance Dept for coordination support,” he added.

Post-2015 floods period, about 6500 flood-impacted Maruti Suzuki vehicles came to its workshops.

flood-affected cars

“As of now, we have observed a moderate increase in the flow of flood-affected cars at our service workshops and our dealers are attending to customers. We have also attended to a few electric cars which were affected by floods. No major issues have been reported or observed, said a spokesperson of Tata Motors Ltd.

Meanwhile, Tata Motors has offered an extension of the standard warranty period, extended warranty period, annual maintenance contract period, and free service period for vehicles in the affected region. The contracts expiring between December 1 and to 15 will be valid until December 31, 2023

Meanwhile, State Finance Minister Thangam Thennarasu had a meeting with representatives of 13 general insurance companies to ensure speedy disposal of claims for the flood-hit vehicle customers of insurers. He urged the companies to visit the spots to assess the damage to the vehicles to get the claims on time.

Thennarasu also assured that the government would arrange to provide some temporary space for servicing the damaged vehicles.

Sidhu of UII said the general insurers assured to relax general guidelines as a measure of support to the flood-hit customers. “UII will be relaxing certain norms, while other insurers will also give some waivers,” he added.