“The surveyor assessed the estimated loss at Rs 6.21 lakh under Ex B-2, but the complainant (woman) is claiming Rs 5 lakh towards a rejected claim under the policy, for which we are confined to grant claim to that extent for the deficiency of service and also adoption of unfair and restrictive trade practices committed by the opposite parties (insurance company),” the August 18 order read.
Met with an accident
The woman claimed that she purchased a vehicle, insured with the said insurance company under a policy valid from January 30, 2021 to January 29, 2021. She added that on July 21, 2021, at about 10 pm, her vehicle met with an accident at Narsingi, resulting in damage to its front portion.
The woman intimated the insurance company about the accident through a letter dated August 20, 2021. However, the insurance claim was rejected on October 8, 2021, with the insurer alleging that the damage had occurred before the reported accident and referring to the change of ownership and alleged non-disclosure of the vehicle’s condition.
She added that, as per the showroom estimate, the vehicle required repairs costing approximately Rs 4-5 lakh. The complainant submitted that the claim was covered under the policy and that the accident had been intimated within the stipulated period.
The woman alleged that the repudiation of the insurance claim amounted to deficiency in service and an unfair trade practice, causing her financial loss, hardship and mental agony, and moved the commission. She was represented by advocate Ramulu Gobbur before the commission.
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Insurance company’s defence
The company, through its advocate Gangadhar Rao Deshpandey, argued that the woman approached the company to report damages to the vehicle after 8 days of the alleged loss. It was added that the delay in intimating the loss was not explained by the complainant and that immediate intimation was required under the policy to enable timely investigation of the loss.
It was added that a surveyor and investigator were appointed to assess the loss and verify the facts. According to the insurer, a forensic report showed that the damage had occurred much before the date of the alleged accident. The insurer also relied on the vehicle’s ownership being transferred on July 20, 2021, just four days before the alleged accident, and alleged that the vehicle’s pre-existing condition had not been disclosed while obtaining the policy.
The lawyer added that since the complainant failed to comply with the policy terms and conditions and did not furnish the required documents, she was not entitled to claim any amount under the policy.
‘Damage before accident not proved’
The commission found that the allegation that the vehicle had suffered damage before the reported accident was not proved with substantial documentary evidence.
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“The allegation of change of ownership and non-disclosure of the vehicle’s condition also has not been proved beyond any reasonable doubt, for which the said contention is rejected,” it added.
The commission noted that the surveyor had assessed the estimated loss at Rs 6.21 lakh, but the woman had claimed Rs 5 lakh under the policy. It therefore restricted the award to Rs 5 lakh.
Accordingly, the commission directed the company to pay Rs 5 lakh towards the rejected claim amount under the policy and to pay Rs 50,000 towards compensation for mental agony and physical trauma caused to the complainant. The insurance company was also directed to pay Rs. 10,000 towards costs of the litigation within 45 days.
Takeaway
The ruling shows that an insurer must substantiate allegations of pre-existing damage and non-disclosure when relying on them to reject an insurance claim.
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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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