“There is every obligation cost upon the opposite party (insurance company) to come to the rescue of the nominee of the insured in case of sudden death of the insured. As such, non-settlement of the claim by the opposite party is nothing but deficiency of service which amounts to unfair trade practice,” the September 23 order read.
‘Died in accident’
The woman claimed that her husband was a fisherman and a member of the Fisheries Industrial Co-Operative Society of Mallapur village. She added that the Telangana government had contributed the premium for fishermen covered under the group insurance scheme, including her husband.
As per the policy, the sum assured was Rs 5 lakh in case of accidental death. Her husband died on October 11, 2023, while travelling from Mallapur to Chinthalachanda village on his motorcycle to go fishing in the Godavari river. He fell from the motorcycle into a pond and drowned, according to the records.
She informed the insurer and submitted the relevant documents to claim the sum assured, but the claim was not settled. Aggrieved, she approached the commission, where she was represented by advocate M Ravinder Reddy.
Insurance company’s defence
The insurance company, through advocate M D Amzad Kha, argued that the complainant was not entitled to the sum assured because her husband’s death was not accidental but was caused by a pre-existing health condition. It was added that the policy excluded such a death from its terms. The lawyer further said that, as the death was not accidental and was caused by a sudden attack of “fits”, the society had no legal obligation to pay the sum assured.
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‘No proof man was good swimmer’
The commission noted that although the woman did not produce the insurance policy, its existence was not disputed by the insurer, which itself produced a copy of the policy. “Thus, the contention of the complainant that her husband obtained the group insurance policy under the Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme and that the premium is being paid by the Government is also proved,” it added.
The commission also noted that the documents on record showed that the woman’s husband died due to drowning. It found that there was no eyewitness to his death. “The husband of the complainant may have the existing disease of fits, but the circumstances of the accident disclose that he fell from his bike into the pond and thereby he died due to drowning,” it further noted.
The commission also rejected the insurer’s contention that the fisherman was a good swimmer, noting that no evidence was produced to support the claim.
Noting that the complainant, as the wife of a fisherman who depended on her husband’s earnings, was left without a source of income after his sudden death, the commission said, “The object of issuing group insurance policy relating to accidental death will be defeated if the claim is rejected by the opposite party (insurance company) on the presumptions and assumptions.”
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Accordingly, the commission directed the insurer to pay the complainant a sum of Rs 5 lakh, which is the sum assured under the subject policy, and also directed it to pay compensation of Rs 10,000 for the mental agony caused to the complainant, besides costs of Rs 5,000.
Takeaway
This ruling highlights that insurers cannot reject a claim without solid evidence to support the grounds on which the claim is rejected.
Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.
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