IN A road accident, loss can be human or financial. File an FIR with police, contact insurer as soon as possible

While nothing can be done to compensate human loss, financial losses can be curtailed. Financial loss due to an accident can be categorised into two forms. One, where two vehicles are involved, and other, where one vehicle and some pedestrian or immovable asset is involved.

Claims settlement in cases where two vehicles are involved is a bit trickier and involves litigation. Assuming a vehicle insured with insurer 'A' meets with an accident against another car insured by 'B', the car owner has the option of claiming damages either under his comprehensive policy with insurer A or insurer B (provided owner of another car insured with B is at fault on road and responsible for loss) under third-party property damages section.

Insurer A will settle claim and can take letter of subrogation from customer and sue insurer B to recover the claim. In this process, customers will be compelled to file FIR and there will be lot of litigation between insurers. Lot of court cases mean lot of legal fees and unproductive costs

To avoid such costs, insurers have signed up an agreement amongst themselves where each of the insurers will settle their respective damage claims and do not sue another insurer.

However, if the customer does not have comprehensive policy and has only third-party liability policy, he always has the option of claiming from insurer B.

Buying a third-party insurance cover is mandatory according to the prevailing laws. However, decision to a buy a comprehensive cover lies with the vehicle owner.

Right after accident, it is very important to share details like insurance company name, insurance policy number, vehicle registration number and driving license number. If possible, one should have a copy made of these documents.

If the damage to vehicle is too much, then police should be informed. A copy of report, panchnama or FIR should be obtained for further use, if the cases are to be taken to a court.

You should make sure that you do not enter into any agreement with your legal adviser over the insurance claim compensation.

One should not open any joint-account or sign any power of attorney in favour of the lawyer.

A second category of claim arises when a vehicle damages some immovable asset or some pedestrian is hit. In this case, the affected party approaches the police, and based on their report, insurance company pays out the compensation.

Claims are paid out of third-party liability portion of the vehicle insurance and depend on the age and earning capacity of the affected party. In case of property loss, different criteria are considered.