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UPMSP Vocational Insurance study materials
UPMSP Vocational Insurance study resources

UPMSP Vocational Insurance: Claims Management and Settlement: Surveyors, Timelines, Salvage and Subrogation

UPMSP Vocational Insurance · Work through your exam, one topic at a time.

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Claims Management and Settlement: Surveyors, Timelines, Salvage and Subrogation

Domain 7 tests the claim file, not just the definition: who surveys the loss, which documents are called for, within what time the insurer must pay, and how salvage and fraud change the number.

The claim chain

  1. Intimation to the insurer or TPA with the policy number and a description of the event.
  2. Registration, issue of a claim number and collection of documents - claim form, FIR or police complaint where needed, bills, discharge summary, repair estimate.
  3. Survey: a licensed surveyor under the IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015 assesses property and fire losses above ₹1 lakh; motor own-damage losses are assessed by a motor surveyor or investigator.
  4. Assessment and settlement: the insurer admits or repudiates in writing with reasons; a partial or ex-gratia settlement must be recorded.

Rules that shape the number

  • Indemnity: pay the loss or the sum insured, whichever is lower, after depreciation, deductible and salvage.
  • Salvage is deducted, because the insured keeps the damaged property.
  • Subrogation passes the insured's recovery rights to the insurer once the claim is paid.
  • Timelines: the 2024 health master circular requires cashless authorisation within one hour and final discharge within three hours; motor third-party claims should be settled within 30 days of the final report, and delay attracts interest under the Motor Vehicles Act.
  • Fraud: inflated bills, back-dated policies and staged theft are moral hazard; the insurer may repudiate and file an FIR.

Worked example

A fire loss of ₹10,00,000 on stock insured for ₹8,00,000 against a value of ₹10,00,000. Salvage realised ₹1,00,000. Net loss = ₹9,00,000. Apply the 80% average: ₹9,00,000 × 0.8 = ₹7,20,000. Deduct the ₹10,000 policy excess → ₹7,10,000 payable.

Traps

  • Repairing or disposing of damaged stock before the surveyor inspects it.
  • Reporting months late without a valid reason - delay can defeat the claim.
  • Adding salvage to the payable amount instead of deducting it.