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CLAIM PROCEDURE
The following is the procedure to be followed by an insured in the event
of damage to the insured machinery. First the insured has to submit a claim form duly completed and signed.
It also has to be checked that both the item and the risk involved are
insured under the policy. It is also essential at the outset to check
whether there is any machinery loss of Profits Insurance in force
covering the damaged machinery. If so, immediate action is necessary for
minimizing the loss under the Machinery Breakdown policy. A qualified surveyor who is also an engineer is deputed to assess the
loss. This surveyor then scrutinizes claims estimates, determine the
cause of the accident and certify that the charges claimed for repairs
are reasonable. An up - to - date copy of the policy should be made
available to this surveyor, if engaged in the initial stage so that he
is fully acquainted with the terms, conditions and excess under the
policy. LOSS SETTLEMENT PROCEDURE Partial Loss Basis In cases where the damage can be repaired, the basis of indemnification
is the cost of restoration to working order based on the customary daily
rates of wages together with normal freight and erection costs and other
duties. Customs duties and dues, if any have been included in the sum
insured. In such cases of repairable damage, no deduction is made for
wear and tear, depreciation, etc. For parts with limited life, depreciation factor has to be taken into
consideration.
Total Loss Basis If the cost of the repair as mentioned above equals or exceeds the
actual value of the machinery insured immediately before the occurrence
of the damage the settlement shall be made on Total Loss Basis. Under total loss basis, the basis of indemnification is the market value
of the item immediately before the accident plus the cost of removing
the damaged machinery less the value of the salvage. Any extra charges incurred towards repairs, such as Express Delivery,
Overtime and holiday rates and wages, are payable only if special
provision for these items has been made in the policy in consideration
of which an additional premium is charged. All costs of alterations, additions, improvements and overhauls carried
out on the occasion of a repair are to be borne by the insured. The Cost
of provisional repairs will be borne by the insure if such repairs
constitute part of the final repairs and do not increase total repair
expenses. The insurer will make payments only after being satisfied by
production of the necessary bills and documents, that the repairs have
been effected or replacement have taken place as the case may be. POSITION AFTER A CLAIM
The insured is not entitled to abandon any property to the insured
whether taken possession of by the insurer or not. From the day of the loss the sum insured for the remainder period of
insurance is reduced by the amount of compensation. To prevent under
insurance during the remaining period of insurance the sum insured must
be reinstated. The premium will be calculated pro - rata from the day the
repaired item is again put to work up to the date of expiry of the
policy.
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