Repudiation Of Claim Based On Surveyor Report Without Material Assessments, Shimla District Commission Holds Oriental Insurance Company Liable

Brief Facts:

The Complainant owned a Hyundai Creta which was insured with Oriental Insurance Company Limited (“Insurance Company”) for Rs. 9,50,000/-. On 24.09.2017, the vehicle sustained damage due to stones hitting its lower portion which made it non-functional. The Complainant promptly informed the Insurance Company, which conducted a spot survey and submitted the necessary documents. Initially, the estimated repair cost was Rs. 54,000/-, but upon inspection, it was found to be Rs. 2,59,272/-. Subsequently, the Insurance Company directed a Surveyor & Loss Assessor (“Surveyor”) to reassess the loss. The vehicle was repaired for Rs. 1,70,000/-, and in May 2018, the Complainant visited the Insurance Company's office, where a discharge voucher was executed for Rs. 41,000/-. The Complainant alleged that the Surveyor's assessment was influenced by the Insurance Company's decision to undervalue the claim. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission Shimla (“District Commission”) and filed a consumer complaint against the Insurance Company and the Surveyor.

The Insurance Company argued that it conducted a spot survey immediately upon intimation and appointed an independent Surveyor. The Surveyor recommended settling the claim at Rs. 41,000/- after deducting salvage value and compulsory excess. It denied the Complainant's claim of a higher repair estimate, stating multiple inspections were conducted, and the claim was settled based on the surveyor's report. It refuted allegations of coercion regarding claim acceptance and argued that there was no deficiency in service or unfair trade practices on its part.

The Surveyor didn't appear before the District Commission for proceedings.

Observations by the District Commission:

Referring to the Surveyor's report, the District Commission noted that the loss of certain parts was deemed consequential and was not included in the assessment. However, the Complainant promptly took the damaged vehicle to the authorized agency on the day of the accident and submitted estimates to the Insurance Company and the Surveyor. Despite the Complainant's presentation of repair bills totalling Rs. 1,70,000/-and subsequent payment to the authorized agency, the Insurance Company relied solely on the surveyor's report, which the District Commission found unjustified.

The District Commission held that the Insurance Company failed to prove the cause of consequential damage to certain car parts or the liable party, as it did not conduct a preliminary inspection immediately after the accident. It noted that the Complainant's payment to the authorized agency was undisputed.

Therefore, the District Commission held that the Surveyor's deductions for excess and salvage were impermissible. Therefore, it held that the Surveyor's report, considered final by the Insurance Company, was doubtful. Thus, the Surveyor's report was found unfit for claim settlement.

Consequently, the District Commission ruled in favour of the Complainant and held the Insurance Company liable for deficiency in services. It ordered the Insurance Company to indemnify the entire repair amount of Rs. 1,70,000/- paid to the authorized agency by the Complainant. As the Insurance Company already paid Rs. 41,000/-, it was directed to pay the remaining Rs. 1,29,000/- along with interest. Additionally, the Insurance Company was directed to pay a compensation of Rs. 15,000/- to the Complainant along with Rs. 10,000/- for the litigation costs.

Case Title: Shri Hemant Kumar Verma vs The Oriental Insurance Company Limited

Case Number: C.C. No. 263/2018

Advocate for the Complainant: Mr Peeyush Verma

Advocate for the Opposite Party: Mr Bunesh Pal (for the Insurance Company), None for the Surveyor

Date of Order: June 6^th, 2024