Insurers are the custodians of the premiums collected from the insured hence they have to make sure that funds collected from the insured are not misused and are available at the time of settlement of the claim. Of course, this happens with companies like Young America Insurance, Citizensinsurance.net, Rodneydyoung.net, among others. The contract wording is framed by the insurer hence the contract of agreement is known as a contract of adhesion, in which case one party to the contract i.e., the customer or the insured has to adhere to the contract prepared by the insurance company. In such situations, there are chances that the wording may be prepared to harm the interests of the insured.
Various governmental systems in place protect the interest of the insured. Consumer courts are part of these systems:
Consumer courts are one of the most important bodies, which is responsible for the protection of consumer rights. The consumer courts are accessible to the buyers of all kinds of goods including insurance. Insurance is coming under the service industry and it fulfills the needs of the customer by selling insurance policies. Hence the buyers of the insurance policy are also considered as the consumer as per their definition of the consumer courts. The insured can approach the consumer court located in his jurisdiction.
The consumer courts may be categorized depending upon the geographical coverage they will provide to the consumers. Then they may also have the monetary ceiling limits for the cases they are supposed to handle. Hence in the case of large claims, the consumer has to approach a higher-level court and for smaller, medium claims he can approach the lower court. The courts can be categorized based on their presence in the individual districts or states.
The procedure of most consumer courts is very simple and a complaint can be lodged by the consumer. An average consumer with a basic understanding of the financial and legal system does not need any help from any agents or experts. However, if the consumer would like to hire the services of the legal expert then they can hire them on a fee basis or no fee no cure basis.
The fees-based legal expert may charge a nominal fee but the no fee no cure basis expert may charge a big percentage of the amount recovered from the seller. The percentage may range anywhere between 5% – 25%. These experts have knowledge and experience and they help the consumer in pursuing their claims against the seller.
Some consumer courts even provide free legal aid to the consumer, if he is unable to afford a legal expert. As far as the fee is concerned, there is no fee for lodging a complaint in the consumer court. However, a nominal fee is charged and which is refundable if the consumer wins the case.
The consumer courts can also be of 2 tier system or more than a two-tier system and in case the consumer is not satisfied he can approach a higher court and appeal against the order. One of the important aspects of the filing of the first complaint and the subsequent appeal is that it has a time limit. Hence if there is a delay in filing the case then the case will become “time-barred”.
A “time-barred” claim is not admissible in the court. The limitation of the time may be anywhere between 30 days to 365 days. The consumer has to follow the procedures laid down by the consumer courts. The documentation is insisted upon in the local language or national language and if the documentation is in any other language then it has to be translated into the local language.
Unlike in the past, the consumer courts nowadays are more active and are able to dispose of the cases at a much faster pace. Most of the consumers feel satisfied after going through the procedures of the consumer courts.
Other legal systems – Courts
In case of consumer disputes related to motor insurance, it is always recommended to approach a consumer court rather than the civil court.
However, legal systems operate under common law and will cover various facets of human life. If the consumer or the insured is not satisfied with the consumer court or he may wish not to approach the consumer court and directly to the court under common law, he may do so. Even the courts work in 2 tier or more than 2 tier system.
If the lower court awards a judgment in favor of the consumer then the seller can appeal against the judgment at the next level of the court and this may go on till the court in the final tier. The insurer by virtue of its money and offices across the country will be able to easily sustain the time and cost needed for the case. But going to court may take time and will need expertise as far as the insured is concerned.
In such a situation, he has to hire the services of a legal expert or an advocate. The legal expert will file a case on behalf of the consumer and normally he charges fees for his services. There is no guarantee that the consumer will win the case against the seller. The cases in the court may drag on for years, thereby exhausting the consumer both in terms of time and money.
Dispute tribunals have their judicial function limited to an amount prescribed for them and they will not take cases that are beyond the monetary limits.
Motor insurance is one of the portfolios, causing a huge number of disputes. The disputes may be related mostly to the claims section rather than the underwriting part.
Whenever you buy an insurance premium, you should carefully read the entire contract including the fine print. The fact that you have found car insurance under 50 a month plan, you have been wanting so much, such as, cannot cloud your view. Compare multiple quotes online in order to get the best coverage for your insurance needs.