New India Assurance wrongful claim denial

Kullu District Commission Finds New India Assurance Co. At Fault for Wrongfully Rejecting Valid Claim

July 29, 2024

The District Consumer Disputes Redressal Commission in Kullu (Himachal Pradesh), chaired by Mr. Purender Vaidya (President) and Ms. Manchali (Member), determined that an FIR filed by an uninvolved third party could not be used by the insurance company to dispute the insured’s account of the accident. Consequently, New India Assurance Co. Ltd. was found liable for wrongfully denying a legitimate accident claim.

Case Summary

The Complainant, owner of a Maruti Alto K10 insured with New India Assurance Co. Ltd., reported an accident on September 21, 2020. The vehicle was severely damaged when it swerved off the road to avoid a cow. An FIR was lodged with the Kullu Police Station, and the Complainant submitted a claim to the Insurance Company with all necessary documents. However, the Insurance Company repudiated the claim. The Complainant then filed a complaint with the District Consumer Disputes Redressal Commission in Kullu.

The Insurance Company argued that there was no service deficiency and accused the Complainant of suppressing material facts, alleging that the accident was due to reckless driving rather than attempting to avoid a cow. They also claimed that the reported injuries did not align with the accident’s circumstances, implying misrepresentation.

Commission’s Findings

The District Commission noted that the FIR was filed by a third party not directly involved in the accident and did not provide detailed information. As such, it was not considered substantial evidence against the Complainant’s claim. The Commission found that the police final report and the driver’s license supported the Complainant’s version of the events.

A surveyor’s report from the Insurance Company valued the vehicle’s IDV at Rs. 2,29,110, but the assessed value was Rs. 2,04,500. After accounting for the excess clause and salvage value, the final settlement amount was Rs. 1,78,500.

The Commission concluded that the repudiation of the claim was unjustified. New India Assurance Co. Ltd. was ordered to pay Rs. 1,78,500 to the Complainant, along with 6% annual interest from the date of the complaint. Additionally, the Insurance Company was directed to compensate Rs. 25,000 for mental distress and Rs. 5,000 for litigation expenses.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

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President Citizens Justice Forum https://citizensjusticeforum.in