Insurance company penalised for wrongfully dismissing claims

The UT Consumer Forum on Friday slapped fines of Rs 5 lakh and Rs 2.4 lakh on the Chandigarh branch of the New India Insurance Company Limited in two separate cases for wrongfully dismissing insurance claims.

Written by Shivani Yadav | Chandigarh | Published:June 23, 2012 3:21 am

The UT Consumer Forum on Friday slapped fines of Rs 5 lakh and Rs 2.4 lakh on the Chandigarh branch of the New India Insurance Company Limited in two separate cases for wrongfully dismissing insurance claims.

The first case involved a consignment of fruits which was stolen by a mob,after the truck carrying it met with an accident. The owner of the consignment,Anoop Singh,a resident of Panchkula who deals in the purchase and sale of fruits,had obtained a Marine Insurance Policy,which covers all type of risks and losses,from the company. Anoop had sent the consignment in August 2010 from Chandigarh to Bangalore in a truck that met with an accident on the way,after which a mob of about 50 people from nearby villages gathered and took away the apples.

The surveyor from the insurance company went to the spot and made inquiries from nearby villagers,who confirmed the looting of apples after the accident. However,the truck driver,unaware of the value of the consignment,wrongly mentioned the loss of apples to be of Rs 3 lakh instead of Rs 5 lakh. The Forum ruled that the policy was ‘Value Agreed Policy’,and that the consignment had violated the value previously agreed upon,and so the claim was dismissed. The consumer forum,however,found the company guilty of wrongfully dismissing the claim and fined it Rs 5 lakh. It also fined the company Rs 15,000 as compensation and Rs 10,000 as litigation costs.

The second case involved a claim filed by a resident of District Kaitha in Haryana,Vikramjeet Singh,to compensate him for repairs costing Rs 2.4 lakhs to a vehicle he had insured with the company,after it met with an accident in 2008. The company,however,turned down the claim saying that the fitness certificate of the vehicle had expired four months beforethe accident. Vikramjeet,later,produced another fitness certificate that he had got made in 2008 and that was valid till 2009 and covered the period of the accident,but it was not accepted by the company. The court fined the insurance company Rs 2.4 lakhs,along with another Rs 10,000 as litigation costs.

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