Chamba District Commission Holds HDFC ERGO Life Insurance Co. Liable For Wrongfully Repudiating Personal Accidental Claim

Brief Facts:

Bhagat Ram was the registered owner of a motor vehicle, which was fully and comprehensively insured with HDFC ERGO General Insurance Company Limited (“Insurance Company”) for the period from April 19, 2019, to midnight of April 18, 2020. One day, Mr Bhagat crashed in an accident while driving the said vehicle, leading to his demise. The Complainants, being his legal heirs, made a claim to the Insurance Company accompanied by all necessary documents. However, the Insurance Company rejected the claim. Feeling aggrieved, the Complainants approached the District Consumer Disputes Redressal Commission, Chamba, Himachal Pradesh (“District Commission”) and filed a consumer complaint against the Insurance Company.

In response to the notice, the Insurance Company argued that the Complainants did not report any loss or file any claim for Personal Accident. Furthermore, it emphasized that the accident occurred on February 14, 2020, while the alleged notice, lacking postal receipts, was sent two years later, and the consumer complaint was filed after three years.

Observations by the District Commission:

The District Commission rejected the defence of the Insurance Company, noting that the Complainants' failure to give intimation regarding the 'Personal Accident' claim was not valid. It noted that the Motor Accident Claims Tribunal, Chamba, disposed of the matter related to the Accident Information Report (“AIR”), and referred it to the Secretary District Legal Services Authority, Chamba, for initiating the pre-litigation process. The District Commission presumed that the AIR was forwarded to both the MACT, Chamba and the Insurance Company, by the police. It emphasized that the Insurance Company had a duty to initiate the claim process upon receiving the AIR. It held the Insurance Company failed to take the necessary steps to initiate the claim process.

The District Commission further addressed the argument, presented by the Insurance Company, that the vehicle was being driven in contravention of the insurance policy. However, the District Commission held that the FIR indicated that the accident occurred due to potholes on the road while labourers were filling them. It noted that the accident was not directly linked to the unauthorized persons travelling on the motorcycle. Therefore, the District Commission held the Insurance Company liable for deficiency in services.

Consequently, the District Commission directed the Insurance Company to pay an amount of Rs. 15,00,000/- to the Complainants along with interest at the rate of 9% per annum from the date of the complaint (November 22, 2022) until its realization.