No technical pleas to reject claims
Malan Nivruti Kamble had taken a loan from IndusInd Bank to purchase a dumper. It was insured for ~22.76 lakh under ‘Miscellaneous Class D Vehicles — Tippers — Package Policy’ issued by Shriram General Insurance.
On July 16 2012, the dumper was stolen from the road side where it was parked. When the incident occurred, the dumper was covered under the policy for the period January 1, 2012 to December 31, 2012. When Kamble noticed the theft, she immediately reported it to the police. Simultaneously, the insurer was also telephonically intimated under reference number 102526.
The police investigated the complaint, and filed a closure report stating that the incident was true but the culprits could not be detected. Kamble, then, asked for the claim to be settled.
The surveyor and investigator appointed by the insurer found that the claim was genuine. Yet, the company sent a letter on August 1, 2012 repudiating the claim on the ground that written intimation about the loss was given belatedly on July 21, 2012, six days after the theft. It said that the delay was a breach of policy conditions.
Kamble filed a complaint before the Maharashtra State Consumer Commission. After considering the rival contentions, the Commission directed the insurer to pay ~22.76 lakh towards the insured value of the dumper along with interest at 9 per cent per annum from the date of repudiation. It ordered that compliance should be done within 45 days, otherwise the interest rate would stand hiked to 12 per cent for the period of delay. In addition, compensation of ~50,000 and litigation costs of ~25,000 were also awarded.
Meanwhile, since Kamble had lost her livelihood and the insurance company did not settle her claim, she defaulted in repayment of the loan to IndusInd Bank. Consequently, the bank attached her house and auctioned it to recover its dues.
Shriram General Insurance challenged the State Commission's order. The National Commission observed that Kamble had specifically averred that intimation had been given promptly on the very next day which was acknowledged by allocating a complaint/claim number. This had not been disputed by the insurer. Hence, it was improper to allege delay in intimation. Further, even if a delay of six days was assumed, that by itself would not be a ground for repudiation without examining its genuineness.
Accordingly, in its order of December 1, 2017 delivered by the National Commission Bench comprising of President Justice D K Jain and Member M Shreehsa, observed that any repudiation would have to be made on valid grounds. If a claim is repudiated purely on technical objections, policyholders would lose confidence in insurers. It concluded that the claim had been rightly allowed by the State Commission and that the rate of 9 per cent interest, compensation and costs were reasonable. However, the enhance interest rate of 12 per cent was made applicable after four weeks from the date of the National Commission's order.
The insurer rejected the claim citing delay in intimation. The Commission rejected this argument