Court cases arising from motor accident insurance claims are set to reduce following the passing of the Insurance Third Party Risks amendment bill 2013 by parliament last Thursday.
The bill seeks to reduce time it takes for a claim to be paid out from the usual 90 days to 60 days and also calls for parties to commit to an arbitration process in case of any disagreements over compensation rather than sue each other.
“The claimant or judgment debtor or his representative shall upon receipt of the admission of liability shall allow the insurer a period of not more than sixty days to settle the claim or judgment out of court and both the insurer and the claimant or judgment debtor or his representative commit to arbitration or mediation during that period before resorting to court,” says a new subsection under clause 3A of the bill.
Also the amendments have given the Insurance Regulatory Authority a say on how much can be paid to a victim in the event his or her injuries from a motor accident are not covered under the structured compensation schedule given under the bill.
The set payments per stipulated injuries are meant to cushion insurers from hefty awards given to victims in some court cases and also expedite claims payment in the event of an accident.
Insurance companies have for a long time complained of unwarranted compensation payouts given via court rulings which they said had made financial planning impossible and also left them vulnerable to unscrupulous lawyers, victims and rogue traffic cops who exaggerate accident reports.
News Source: theSTAR