1. Do insurance companies honour a claim in case a car catches fire?

Do insurance companies honour a claim in case a car catches fire?

With a rapid increase in vehicle population, fire incidents also have been on the rise in India in recent years. Sadly, automakers seem to be doing little to address the safety concerns of customers, and often blame the incidents on tampered wiring. They also hardly give any compensation to the affected person.

By: | Published: February 20, 2017 5:02 PM
Insurers also mostly blame the fire incidents on short circuits or mechanical defects. “Vehicles catch fire either on account of short circuits or mechanical defects. Insurers also mostly blame the fire incidents on short circuits or mechanical defects. “Vehicles catch fire either on account of short circuits or mechanical defects.

With a rapid increase in vehicle population, fire incidents also have been on the rise in India in recent years. Sadly, automakers seem to be doing little to address the safety concerns of customers, and often blame the incidents on tampered wiring. They also hardly give any compensation to the affected person.

But what about the insurance claim? Have you ever wondered what happens to an insurance claim in case a vehicle, say a car, catches fire or is destroyed in a fire incident? Does the claim get honoured in such cases?

Insurers also mostly blame the fire incidents on short circuits or mechanical defects. “Vehicles catch fire either on account of short circuits or mechanical defects. Short circuits in vehicles usually happen when the electrical wiring system is tampered to fit extra accessories. Mechanical defects like oil or fuel leakage, overheating of engine and high pressure at vulnerable parts can also cause fire,” says M Ravichandran, President-TATA AIG General Insurance Company Ltd.

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Besides, owners may fix extra accessories like woofers, amplifiers, headlamps, fog lamps, alarms etc. The vehicle’s battery may not be able to afford such accessories since the design would be limited for the default accessories. This may cause tears in the electric wiring systems, which could eventually leads to sparks.

At times malfunction of the wiring system may also heat up vulnerable parts, causing sudden fires. Installation or replacement LPG gas kits, fitting of accessories like air filters, repairing of air conditioners etc. may also lead to malfunctions.

What to do?

In case of a fire incident, the owner should immediately report the matter to the police and the insurance company. If the owner informs the insurance officials immediately, they may also conduct a spot survey. The insurance company may ask for an FIR report and the cause of accident to carry out their own investigation. If the mishap is a result of a deliberate attempt of the owner to claim insurance, and it’s proven during investigation, the claim will be denied.

Are claims honoured?
In normal cases claims are honourd.

“Loss or damage to a vehicle due to fire, whether external or internal, is covered in the Motor Package Policies. Fire for the purpose of insurance claims means actual ignition with visible flames. Insurance companies honor claims, if there is loss to the vehicle or damage to its parts due to fire. Damage to wirings, electrical or electronic parts due to short circuiting or overheating, however, is not covered unless there is actual fire,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance.

However, the claim generally would not be honoured “if any fire mishap happens due to fitment of an unauthorised accessory and the same is proven during the investigation,” says Ravichandran.

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Precautions to take
Vehicle owners, therefore, must avoid fitting authorised accessories that consume higher voltages. Even in case they wish to fit authorised accessories, they must make sure that the original electric system is not tampered with. “When extra accessories are installed in cars, the mechanic should be extra careful. When repairing, right tools should be used so that the wiring system is not torn,” informs Ravichandran.

It may also be a good idea to keep a small fire extinguisher in the vehicle which may help you in such cases.

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