New truck falls 40 feet one day after delivery: Why HDFC ERGO must now pay Rs 23.75 lakh to consumer
The national consumer commission was hearing an appeal filed by HDFC ERGO against Telangana state consumer commission ordering the payment of Rs 23.75 lakh.
A Bench comprising AVM J Rajendra (Retd.), Presiding Member, and Justice Anoop Kumar Mendiratta, Member was hearing an appeal filed by the company and upheld the verdict of the Telangana State Consumer Disputes Redressal Commission.
“The claim, as such, is liable to be settled by the Insurance Company treating it to be the case of total loss. The independent estimates submitted by the complainant could not have been brushed aside by the Insurance Company,” the NCDRC order said on February 10.
The damage to the vehicle is of all the major parts and is a clear case of total loss of vehicle, said the national consumer commission. (Image enhanced using AI)
NCDRC: Surveyor’s report not final word
Surveyor’s report is not the last and final word and is not so sacrosanct as to be incapable of being departed from.
The surveyor without any cogent reasons appears to have simply taken up the repair value for the chassis in order to bring the claim below 75% of the ‘Insured Declared Value‘ (IDV).
The estimates obtained by the consumer clearly reflect that the cost of repairs exceeds 75% of the insured value.
We do not find any reasons to differ from the findings arrived at by the state consumer commission.
The damage to the vehicle is of all the major parts and is a clear case of total loss of vehicle.
We further hold that the state consumer commission rightly dismissed the preliminary objections taken on behalf of the insurance company holding that the complainant falls within the purview of ‘consumer’ under the Consumer Protection Act, 1986.
Finding no infirmity in the state consumer commission’s order, the NCDRC dismissed the appeal and imposed additional costs of Rs 10,000 on the insurer.
It directed compliance within six weeks, failing which the amount would carry simple interest at 8 per cent per annum until realization.
The vehicle was insured with HDFC ERGO for an IDV of Rs 25 lakh for the period June 18, 2013 to June 17, 2014.
On June 19, 2013, the very next day after purchase, the truck of the consumer met with a serious accident.
It hit a divider and fell from a height of about 40 feet from a bridge into a ditch.
The chassis broke and the vehicle suffered extensive damage.
The incident was reported to the police and the insurer.
A surveyor deputed by the insurance company inspected the vehicle and advised that it be shifted to a workshop.
The consumer lodged a claim treating the case as one of total loss.
Insurer closed consumer’s claim as ‘no claim’
The insurer closed the claim as “no claim” on October 3, 2013.
The company alleged that the consumer had failed to produce the vehicle for re-inspection and had not furnished required documents.
HDFC ERGO relied on its surveyor’s report dated October 10, 2013, which assessed the net loss at Rs 11,39,880 on a repair basis, significantly below 75% of the IDV.
Arguing before the NCDRC, the insurer contended that the surveyor’s report, prepared under Section 64-UM of the Insurance Act, 1938, could not be brushed aside and that the vehicle was repairable.
Complainant relied on independent assessments
The consumer, on the other hand, produced multiple independent assessments, including estimates from authorised workshops, placing the repair cost above Rs 22 lakh.
The consumer argued that under the policy and General Regulation 8 (GR-8) of the Indian Motor Tariff, a vehicle is deemed a “constructive total loss” if the repair cost exceeds 75% of the IDV.
In this case, 75% of the IDV of Rs 25 lakh worked out to Rs 18.75 lakh.
The consumer contended that the extent of damage including a broken chassis, cracked engine block, and damaged axles made the vehicle beyond economical repair.
It observed that when a brand-new vehicle suffers such extensive structural damage, merely calculating the cost of individual spare parts “will not serve the purpose,” as connected components must also be replaced to restore roadworthiness.
The state consumer commission had further held that the insurer appeared to have taken a “frivolous defence” to reduce its liability.
It had directed payment of Rs 23,75,000 with 6% interest to the consumer from the date of complaint, along with Rs 5,000 as costs.
Vineet Upadhyay is an Assistant Editor with The Indian Express, where he leads specialized coverage of the Indian judicial system.
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The damage to the vehicle is of all the major parts and is a clear case of total loss of vehicle, said the national consumer commission. (Image enhanced using AI)