Percentage Of No Claim Bonus Should Be Reduced From Claimed Amount: Uttarakhand State Commission Modifies Amount Awarded

Thus, the State Commission modified the amount awarded by the District Commission.

Brief facts:

The complainant purchased Volkswagen Vento (car) for Rs. 9,50,500/- on 16.09.2015 and insured it with Bharti AXA General Insurance Company Limited. Later, on 12.09.2016 the car was insured with United India Insurance Company Limited (appellant) for the 2nd year after payment of premium of Rs. 26,246/-.

During subsistence of the policy, the car met with an accident on 25.11.2016 and after calling the appellant the insured car was towed to Dehradun. Upon submission of claim, the appellant deputed a surveyor for inspection of the damaged car. Initially, the surveyor calculated Rs. 8,00,000/- as compensation but reduced it to Rs. 7,00,000/- claiming that the value of the car was wrongly mentioned.

After several requests, in May 2017 the surveyor informed that the insurance company could only pay Rs. 3,43,000/- and the remaining amount of Rs. 3,07,000/- would be paid later on. Afterwards, the complainant was told to repair the car for which he incurred Rs. 6,50,000/- as expenditure.

Despite repeated follow-ups and sending a legal notice, the respondent forfeited the policy. Being aggrieved, the complainant filed a complaint in the District Commission.

Through an order dated 22.05.2019, the District Commission directed the insurance company to pay Rs. 9,50,500/- with 6 % interest and Rs. 5,000/- as litigation cost. Dissatisfied by the order, the insurance company filed an appeal in the Uttarakhand State Consumer Disputes Redressal Commission (State Commission).

Contention of United India Insurance Company:

The appellant contended that the District Commission has overlooked the facts and merits of the case. Additionally, they have failed to consider the written statement and documentary evidence.

Further, the complainant concealed that he has availed No Claim Bonus to the extent of 20%. The appellant also stated that total loss as assessed by surveyor was Rs. 3,43,000/- on repair cash loss basis.

Observation of the State Commission:

The commission observed that the complainant has received No Claim Bonus at 20% amounting to Rs. 4,909.09/- from the previous insurer (Bharti AXA General Insurance Company Limited) of the car. As per the survey report, the net loss on repair basis was Rs. 5,32,676/- but 20% amount of No Claim Bonus was to be deducted from it.

The commission relied on New India Assurance Company Limited Vs. Shinder Pal Singh and another III (2017) CPJ 559 (NC), wherein it was held that if the complainant paid 20% less premium, then by applying principle of equity the insurance company should reduce entitlement under claim by 20%.

Thus, the commission reduced 20 % from the assessed loss of Rs. 5,32,676/- and the net amount come down to Rs. 4,26,140/-. Therefore, the appeal was partly allowed and the amount awarded by the District Commission was modified from Rs. 9,50,500/- to Rs. 4,26,140/-.

Case title: United India Insurance Company Limited vs Sh. Manu Sharma

Case No: First Appeal No. 235 / 2019

Date of Pronouncement: 13.12.2024

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