Can't Repudiate Insurance Claim Solely Based On Late Intimation, Prayagraj District Commission Holds United India Insurance Co. Liable

Brief Facts:

Dr. Anurag Mishra (“Complainant”) insured his two-wheeler, a Hero Splendor Plus motorbike with United Indian Insurance Company (“Insurance Company”). The policy number was valid until March 30, 2018. On July 9, 2017, the Complainant discovered the theft of the insured vehicle while attending a religious event at Tularam Bagh around 3 AM. There were immediate efforts to locate the stolen vehicle and the Complainant reported the incident to the Jaarjataun police station and filed an FIR.

Due to unforeseen circumstances, such as the sudden death of the Complainant's father and the illness of his mother, he was unable to inform the Insurance Company promptly. The Complainant was aware of the requirement for filing a claim and had intended to provide the necessary information, but due to personal challenges and lack of awareness, he couldn't do so. Subsequent police investigations were unsuccessful, leading to the final report being filed.

Despite the Complainant's efforts, the Insurance Company informed him that his claim would not be processed as he failed to provide information promptly. He argued that the fundamental question was whether the stolen vehicle was insured or not when the theft occurred. Due to the Complainant's lack of awareness and emotional distress, he could not promptly submit the necessary information to the Insurance Company.

Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Prayagraj (“District Commission”) and filed a consumer complaint against the Insurance Company. The Insurance Company didn't appear before the District Commission.

Observations by the District Commission:

The District Commission held that the Complainant promptly reported the theft on the same day, and the police filed the final report. Despite the Complainant's prompt reporting of the theft and submission of necessary documents, the Insurance Company delayed providing information to him. The bench observed that the Complainant, facing personal challenges like the sudden demise of his father and his mother's illness, could not immediately fulfil the formalities required by the Insurance Company.

The District Commission noted that the Insurance Company, through its letter, acknowledged the theft claim but rejected it solely on the grounds of delayed reporting. It ignored the fact that the insured vehicle was stolen within the policy period. Therefore, the District Commission held the Insurance Company's decision to reject the claim due to delayed notification was unjust.

Therefore, the District Commission held the Insurance Company liable for deficiency in services. Consequently, the District Commission directed the Insurance Company to pay the Complainant, within two months from the date of the decision, an amount of Rs. 29,500/- along with an 8% annual interest, covering the Insured Declared Value of the stolen two-wheeler. Additionally, the Insurance Company was directed to pay Rs. 5,000/- as compensation for mental distress and Rs. 2,000/- as litigation expenses.

Case Title: Dr Anurag Mishra vs United India Insurance Company

Click here to read / download order