Baramulla Consumer District Commission Holds Insurance Company Liable For Non-Settlement Of Genuine Claim Amounts

Brief background:

The complainant purchased a vehicle truck TATA Signa from Fear Deal TATA motors in Srinagar and got it insured with Reliance General Insurance company for an amount of Rs. 29 lakhs. A premium of Rs. 22,283/- was paid by the complainant. During the subsistence of the policy, the truck got extensively damaged in an accident which was then handed over for repair to Lala Enterprises, Jammu. Simultaneously, a claim was lodged with the insurance company and all relevant documents as demanded were submitted. However, despite furnishing all information, the claim was delayed on one pretext or the other for about 5 months. Consequently, the claim was repudiated by the company without affording the complainant any opportunity for presenting her case. The complainant was regularly paying installments of Rs. 56,600 towards bank loan for the insured vehicle and Rs. 15000/- per month for parking charges of the vehicle which is stationed in the workshop of the repairer. Thus, due to heavy losses incurred by the complainant and mental agony suffered by her, a complaint was filed before the consumer forum praying for appropriate compensation.

The Insurance company denied all the allegations and argued that documents required for due processing of claims were not submitted by the complainant.

Observations:

The bench observed that the company was under an obligation to settle the claim of the complainant within 45 days from the date of submission of all relevant documents. No evidence has been submitted by the company to show that the complainant has failed to register her claim. It was further observed that repudiation of claims by the company without giving any plausible reasons is arbitrary and not tenable.

It was held that non-settlement of genuine claims of the complainant and failure to adhere to standards and guidelines is 'deficiency in service' on the part of the Insurance Company.

Thus, the complaint was allowed by the commission with the following reliefs:

1. Insured amount of Rs. 29 lacs along with interest @8% p.a.
2. Rs. 20 lacs as compensation for mental agony and harassment.
3. Refund of parking charges paid by the complainant
4. Rs. 50,000 as litigation charges
5. Rs. 20,000 to be deposited in Consumer Welfare Fund at Baramulla

Case name: Asifa Begum vs General manager, Fear Deal tata motors & ors.

Case number: Consumer complaint 24/2023

Date of decision: 02.12.2024