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Old 16th December 2011, 12:37   #1
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Default The devil is in the details - consequential damage

This should actually get into my BMW ownership log:
http://www.team-bhp.com/forum/test-d...ml#post2598064

But this whole "consequential damage" concept freaked me out so much that I felt deserves a topic of its own.

As can be seen from the above thread, my 520D went over a stone, which cracked the transmission oil pan at the bottom. The transmission died in 'Park' mode and the car could not be budged. They tried to drag the car onto the two truck and I am not sure what else they did to get the car on the tow truck. (Btw, the car died at around 5:30am and they were able to get the car on tow truck at around 10pm!!)

Luckily I have the BMW-Secure which is some kind of top-up insurance. So full damage of approx 7.75 lakhs is covered. Today I called the insurance person to casually check how much was covered by regular insurance and how much was covered by Secure. He told me that since the accident only resulted in oil-leakage and oil-pan-damage very little was covered by insurance and the actual transmission (which is ~90% of the damage) replacement is covered by Secure as it is considered "consequential damage". I couldn't ask further details because I nearly fainted.

Since I am fully covered one way or the other maybe the issue is not such a serious one in my case. But I am shocked to learn that there is such a clause called "consequential damage" and it looks like insurance has lot of scope for foul play.

How to protect oneself against any denial of claims due to this "consequential damage" thingy?
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Old 16th December 2011, 13:48   #2
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Default Re: The devil is in the details - consequential damage

Few threads I found on the forum related to consequential damage:
http://www.team-bhp.com/forum/indian...insurance.html (Ritz engine seized post-accident. Possible to claim from insurance?)

http://www.team-bhp.com/forum/indian...-cheaters.html (Swift Dzrie Vdi Rightful Insurance claim denied - Beware of Royal Sundaram CHEATERS !)

Bajaj Allianz DriveAssure covers the following:
Consequential damage to engine and transmission arising out of leakage of lubricating oil due to accidental means.

So what I can make out from this is, if accident only caused coolant/oil-leakage and nothing more - but the engine and transmission were damaged because either you drove without knowledge or it was towed incorrectly, etc. you will not be covered by insurance for engine/transmission-repairs.
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Old 16th December 2011, 13:59   #3
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Default Re: The devil is in the details - consequential damage

Damage due to incorrect towing would fall under the category of negligent use rather than accident so it would be denied . For example , if the tow truck meets with an accident while carrying a car no insurance can be claimed for any damage to the car .
For any insurance matter where one feels that justice is being denied , please raise an issue with IRDA - I found them to be pretty good , just copying them makes the insurance company sit up and take notice . Resolution is tracked through an IRDA designated number and resolution is tracked for completion within 15 days
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Old 16th December 2011, 14:06   #4
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Default Re: The devil is in the details - consequential damage

Sorry to hear about the damage androdev, but thanks for informing.

Now, I need to find out of I can add cover for "consequential damage" to my existing insurance plan.

It is definitely a must for premium cars, else the repair bill itself will be the cost of an entry level sedan as in your case!
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Old 16th December 2011, 15:00   #5
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Default Re: The devil is in the details - consequential damage

Wow, never thought there would be a clause like this, majority of engine related damages do happen as a consequence of something happening incorrectly. These insurance companies do think about every detail before they sell stuff sadly, we don't always check all of it. Thanks for the info & sorry to hear about your car. I have heard plenty of good things about BMW's after sales support. This just adds one more feather to their cap. Bravo !
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Old 25th December 2011, 19:48   #6
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Default Re: The devil is in the details - consequential damage

Quote:
Originally Posted by androdev View Post
This should actually get into my BMW ownership log:
http://www.team-bhp.com/forum/test-d...ml#post2598064

But this whole "consequential damage" concept freaked me out so much that I felt deserves a topic of its own.

As can be seen from the above thread, my 520D went over a stone, which cracked the transmission oil pan at the bottom. The transmission died in 'Park' mode and the car could not be budged. They tried to drag the car onto the two truck and I am not sure what else they did to get the car on the tow truck. (Btw, the car died at around 5:30am and they were able to get the car on tow truck at around 10pm!!)

Luckily I have the BMW-Secure which is some kind of top-up insurance. So full damage of approx 7.75 lakhs is covered. Today I called the insurance person to casually check how much was covered by regular insurance and how much was covered by Secure. He told me that since the accident only resulted in oil-leakage and oil-pan-damage very little was covered by insurance and the actual transmission (which is ~90% of the damage) replacement is covered by Secure as it is considered "consequential damage". I couldn't ask further details because I nearly fainted.

Since I am fully covered one way or the other maybe the issue is not such a serious one in my case. But I am shocked to learn that there is such a clause called "consequential damage" and it looks like insurance has lot of scope for foul play.

How to protect oneself against any denial of claims due to this "consequential damage" thingy?
I believe it affects all of us. I mean, in principle there are risks associated with driving a car and therefore the insurance thing comes up. So, I pay a premium to cover my risks. Period. Then come the clause churners applying *(s) to the basic idea of risk cover. It then starts becoming confusing much like our tax system. The *s mean that all those risks are excluded (read saving money by the insurance company) but the premium is not lowered down in the same manner. Then we are introduced to a 'new' risk cover with premium payment 'on top'. We are told now everything is covered! Blah! Just wait till *(s) start getting added to the top-up risk cover as well.

In your case, Bajaj Allianz made a good position on the claim ratio of the basic insurance policy. Then, to pay for the repair, it destroyed the claim ratio of the BMW Secure policy (much smaller premium). I feel, the basic insurance cover would result in savings for BA but they will not lower the basic insurance premium to pass on the benefit to the customer. On the other hand (if this is a general practice) the premium on Secure would go up gradually (a fact). So, the prices seldom come down. They only go up.

It would be interesting to check if only the 'consequential damage' parts were billed to Secure or if everything including the base plate, the sump, mountings et al was dumped on it. Oh these insurers.
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