Insurance Co fined for repudiating claim

Avneet Kaur

Jalandhar, October 21

The District Consumer Disputes Redressal Forum has directed Tata AIG General Insurance Company Limited, Jalandhar, to pay Rs 3.40 lakh to a Roop Nagar resident who had purchased insurance for his vehicle that later got damaged due to a landslide. The forum has also asked the firm to pay an additional Rs 50,000 as litigation expenses and for causing mental and physical harassment.

Madan Mohan Lal, a resident of Roop Nagar, through his attorney Sanjeev Kumar, had filed a complaint against the insurance company from which he had purchased the insurance for his car. Later, his vehicle was completely damaged due to a sudden landslide and falling of stones on the roadside, while he was travelling to Himachal Pradesh on July 17, 2014.

As per the complainant, the falling stones hit the insured car and its windscreen was damaged and the stones lying on the road damaged the engine of the car badly. As a result, the car was not in a condition to be used, hence, it was taken to a service centre and the opposite party was intimated about it.

Meanwhile, he said, he repeatedly visited the insurance company and showed necessary bills and documents as well as the insurance copy where it was mentioned that if the vehicle meets with any unavoidable situation, including, earthquake, hailstorm or any by other means, the complete insurance of the vehicle was promised.

He said he gave a bill of Rs 4,51,861 to the company’s workshop and later asked the firm to reimburse the claim, but to no avail as they rejected the plea.

The complainant stated that the insurer and the workshop, as per the preliminary estimate, assessed the damage to the amount of Rs 3,50,000 to Rs 4,00,000, while the insured declared value (IDV) of the vehicle was Rs 7,80,000, but the claim was repudiated on frivolous grounds that the damage parts were not covered in the policy.

The opposite party, in its reply, stated that that the loss was assessed to the tune of Rs 29,927. The cause of loss as stated by the insured in the claim form was “a stone that fell from the top of a hill hit the windscreen of the vehicle due to which the vehicle got imbalanced and fell into a ditch”. However, as per the observations made by their surveyor in his report says that the damages present on the engine and allied parts were not allowed as the damage to the engine and its allied parts was possible only if the vehicle was driven without the engine oil after the accident which leads to the engine failure.

“Hence, the engine and allied parts are not covered under the insurance policy, as it is a consequential loss. Thus, the claim to the tune of Rs 29,927 has been approved,” the party said.

The forum observed that the opposite party has wrongly and illegally framed the claim to the amount of Rs 29,927, whereas the complainant is entitled for the total loss caused to the insured vehicle as assessed by the workshop, i.e. Rs.3,44,890. Hence, the forum directed the insurance company to pay the said claim amount to the complainant with interest at the rate of 12 per cent per annum.