Delay In Settling Insurance Claim Amount To Deficiency In Service, South Goa District Commission Holds TATA AIG General Insurance Co. Liable

Brief Facts:

Dr. D. J. alias Domingos J De Souza (“Complainant”) was involved in an incident, where the Complainant's Maruti Vitara Brezza Car suffered damage to its right side (front and back door) in a collision with an Omni Vehicle. Despite the Complainant's active TATA AIG comprehensive motor policy, valid until 20/02/2023, subsequent efforts to contact the police and TATA AIG General Insurance Co. Ltd. (“Insurance Company”) proved unfruitful. The Complainant, having failed to secure police assistance, left the scene and, later, informed the insurance company via email and claimed payments for necessary repairs. Despite an inspection by an anonymous insurance surveyor in February 2023, there was no subsequent response from the insurance company regarding approval and repair. He paid Rs. 10,500/- insurance premium towards a comprehensive policy which offered extensive coverage against multiple types of losses including protection against third-party liabilities as well as cover for damages to the insured vehicle. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, South Goa (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company denied any deficiency of service, contending that the Complainant has not presented accurate facts and has concealed crucial information. The insurance company challenged the authenticity of the Complainant's email communication, asserting that it was directed to the wrong email address belonging to TATA AIA Life Insurance Co, not TATA AIG General Insurance Co. Ltd. It questioned the absence of essential documents, such as the claim form and emails. Emphasizing the Complainant's failure to promptly notify it after the accident for the appointment of a surveyor, it disputed the legitimacy of servicing of the vehicle submitted by the Complainant, asserting that it lacked the necessary endorsement the insurance company and emphasized the absence of an actual bill.

Observations by the District Commission:

The District Commission held that a delay in settling an insurance claim constitutes a deficiency in service. While acknowledging discrepancies in the dates and information presented by the Complainant, particularly as a senior citizen, the District Commission relied on accurate dates and information found in the attachments submitted with the Complaint.

The District Commission noted the distinction between ordinary claims and those associated with theft, highlighting that delayed claims due to accidents or theft may not be automatically denied relief if valid explanations are provided. Recognizing the distinction between Tata AIA Life Insurance Company Limited and Tata AIG General Insurance Company Limited, the District Commission held that errors in communication channels could lead to misdirected claims due to the potential connection between these entities within the Tata Group. The District Commission held that it was the duty of Tata Group to resolve misdirected claims.

The District Commission referred to “Policyholder Servicing Turnaround Times" outlined by IRDAI and held that the delay in settling the claim constitutes a service deficiency. Therefore, it held that the insurance company is liable for deficiency in services.

Consequently, the District Commission directed the insurance company to pay the cost of repairing the vehicle at Rs. 17,531.26/- to the Complainant. Additionally, the insurance company was directed to pay a compensation of Rs. 5,000/- to the Complainant.