Chandigarh District Commission Holds Go Digit Insurance Liable For Failure To Settle Genuine Accidental Claim Timely

Brief Facts:

Mr. Mukesh Kumara (“Complainant”) owned a BMW X3 which was insured with Go Digit General Insurance Ltd. (“Insurance Company”) from 19.08.2019 to 19.08.2020. On 09.12.2019, the Complainant's friend, Mr. Parav Sharma, borrowed the car. While driving the case, he lost control, colliding with a roadside tree and causing damage. The injured driver was taken to the General Hospital. The repair shop, Sai Moto Corp, informed the insurance company about the claim, which led to the appointment of a surveyor and investigator. Despite the insurance company's claim settlement commitment within 30 days, it failed to meet this deadline. The Complainant raised several grievances through email but didn't receive any satisfactory response. The insurance company, thereafter, send a letter to the Complainant raising queries about the Complainant submitting all required documents. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company argued that a previous claim involving the alleged Complainant showed a similar modus operandi. It suspected wrongful claims, as the previous owner confirmed selling the vehicle for Rs. 5 lakhs, while Complainant claimed an IDV of Rs. 13,80,000/-. Despite requests, it argued that the Complainant failed to provide proof of purchase, payment transactions, or bank statements. It claimed that material facts were misrepresented by the Complainant during the policy procurement.

Observations by the District Commission:

The District Commission noted that the claim was rejected by the insurance company based on the Complainant's alleged non-cooperation and failure to respond to communications. However, the District Commission observed that the Complainant submitted replies to all queries raised by the insurance company.

Furthermore, the District Commission noted that the licensed insurance claim surveyor and loss assessor/investigator, in an affidavit submitted by the Complainant, assessed the damage to the vehicle at Rs. 1,291,329.90/-. This amount exceeded 75% of the Insured Declared Value (IDV) of Rs. 13,80,000/-. Given that the assessed amount for repairs surpassed the prescribed limit, the District Commission held it a case of total loss of the vehicle. Further, the District Commission held the insurance company liable for deficiency in services.

Consequently, the District Commission held that the Complainant was entitled to receive the IDV of Rs. 13,80,000/-, minus the salvage value of Rs. 43,919.90/-. Therefore, it directed the insurance company to pay Rs. 13,36,080/- (IDV value minus salvage) to the Complainant, along with interest at a rate of 9% per annum from the date of filing the complaint onwards. The insurance company was also ordered to pay a compensation of Rs. 20,000/- for the mental agony and harassment caused to the Complainant along with Rs. 10,000/- for the litigation costs incurred by him.