Motor insurance claims to get faster and fairer? What changes as IRDAI tightens rules

Motor insurance policyholders may see quicker claim settlements after the Insurance Regulatory and Development Authority of India (IRDAI) issued tighter norms governing claim handling by insurers.

The changes form part of IRDAI’s Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers Regulations, 2024, and focus on timelines, disclosures and accountability in motor insurance claims.

Board-approved claim policies mandated

Under the revised framework, insurers are required to put in place a board-approved motor claim settlement policy. The regulator said this is intended to ensure consistency in claim decisions and reduce discretion at the operational level.

Insurers must also disclose details of surveyors or loss assessors involved in a claim, including their role and appointment, to the policyholder.

Deductions to require explanation

The regulator has mandated that any deduction made while settling a claim must be supported by documentary evidence and explained to the policyholder. The norms also caution insurers against coercive practices during claim settlement. The regulator has also indicated that persistent violations could invite supervisory action, including penalties. Industry executives said insurers may need to recalibrate processes and invest in technology to meet the tighter standards, particularly as claim volumes rise.

Motor insurance complaints decline marginally

Regulatory data shows that motor insurance accounted for 26.18 per cent of total insurance complaints in FY24. The share declined to 24.8 per cent in FY25.

Ombudsman resolves bulk of cases

Between FY23 and FY25, Insurance Ombudsmen received 10,156 complaints related to motor insurance. Of these, 9,943 cases were disposed of through awards, withdrawals or rulings that they were not maintainable. A small number remain under process.

Survey norms eased for small claims

For motor insurance claims below Rs 50,000, IRDAI has removed the requirement of mandatory physical inspection by a surveyor. Insurers may assess such claims through digital and app-based mechanisms.

The regulator has also reiterated oversight of surveyors under existing regulations and said instances of misconduct or negligence must be reported. IRDAI retains the power to suspend surveyor licences in such cases.