Odisha train accident: FinMin urges insurance companies to expedite claim settlement

Odisha train crash AFP

The Finance Ministry has asked insurance companies to give an update on the steps they are taking to expedite the claim settlement process for victims of the triple train crash in Balasore district of Odisha on June 2.

In an email to non-life insurance companies, the General Insurance Council has said that it has been receiving “frequent calls from the additional secretary, department of financial services, Ministry of Finance.”

The inquiries pertain to claim settlement process for passengers who may have suffered injuries or died due to the accident, one of the worst rail mishaps that India has witnessed.

They have been asked to provide updates on the steps being taken to proactively identify the victims.

Also read: Life Insurance Corporation eases policy claim settlement process for Odisha train crash victims

“Some members would have tied up with IRCTC and PMSBY (Pradhan Mantri Suraksha Bima Yojana) to offer accident insurance to the train passengers. You are requested to please inform the council urgently whether you have underwritten accident insurance policies in a tie-up with IRCTC and PMSBY and the steps you are taking in proactively identifying the victims and ensuring that their claims are settled expeditiously,” the GI Council's email to insurers, a copy of which Moneycontrol has accessed, says.

PMSBY provides insurance against death or disability due to accidents. The sum assured – which will be the claim amount to be paid out – in case of death is Rs 2 lakh.

In case of total and irrecoverable loss of both eyes, hands or feet, the maximum claim amount is Rs 2 lakh. If the accident victim were to completely lose sight in one eye or use of one hand or foot, the claim amount is restricted to Rs 1 lakh.

Indian Railway Catering and Tourism Corporation (IRCTC) also offers travel insurance through several general insurance companies. Passengers have to opt for this policy at the time of booking rail tickets through the IRCTC portal. The sum assured for death and permanent total disability is Rs 10 lakh, but restricted to Rs 7.5 lakh in case of permanent partial disability.

Upon hospitalisation for treatment of injuries, the policy will hand out Rs 7.5 lakh. The coverage also includes claim settlement of Rs 10,000 for transportation of mortal remains.

“IRCTC will have the list of passengers who had purchased insurance, which insurance companies can use to settle claims. In addition, companies are simplifying other requirements and waiving off the need to produce certain documents. For instance, in this case, there is no need to prove that an accident has taken place – that is known. Usually, an accident report and first information report (FIR) are needed for the claims to be processed. These are being waived off,” said a senior industry official in the know of finance ministry and General Insurance Council’s actions.

All insurance companies – life and non-life - are in the process of finalising their plans to ease requirements for settling claims linked to the mammoth tragedy.

The Life Insurance Corporation of India (LIC) issued a statement on Saturday, announcing its decision to ease claim processing norms. A list of casualties published by the Railways, police or any state or Central authorities will be accepted as proof of death instead of registered death certificates, it said.