In a recent ruling, the district consumer disputes redressal commission of Chandigarh has directed United India Insurance Company to pay Rs 4,77,716 to a Panchkula woman for withholding her car accident claim.
According to media reports, the complainant, Amarjit Kaur Kang, alleged that the insurance company denied her claim based on technicalities, despite the accident being reported and an FIR filed immediately.
Background And Complaint Details
Kang had insured her car with United India Insurance Company from July 28, 2019, to July 27, 2020.
On December 25, 2019, she lent her car to Ravi Bhola, who further entrusted it to his driver, Sumit.
The car met with an accident near the Maloya turn temple in Chandigarh, resulting in significant damages. Kang informed the insurance company about the accident and also submitted an estimate of Rs 14,37,074.56 for repairs.
However, the insurance company closed her claim, citing the non-submission of the driver’s license and failure to arrange a meeting with Sumit. They also alleged that Kang did not inform them about the accident promptly, thus violating the policy’s terms and conditions.
Commission’s Ruling And Implications For Consumers
After reviewing the evidence, the Commission found that an FIR was lodged immediately after the accident, leaving no room for manipulation. They concluded that the insurance company’s actions amounted to a deficiency in service, as the claim was closed solely on technical grounds.
Regarding the compensation, the Commission noted that the estimated repair cost exceeded the Insured Declared Value (IDV) of the car, making it a constructive total loss. Therefore, Kang was entitled to receive the IDV (less excess clause) along with interest, compensation, and litigation costs.
The ruling has significant implications for consumers.
Shashank Agarwal, advocate, Delhi High Court, said that that such decisions would deter malpractices by service providers, adding that insurance companies and other service providers must not exploit the public.
Abhishek A Rastogi, founder, Rastogi Chambers, said that the ruling would reduce ambiguity and allow consumers to receive their rightful compensation without disputes.
This decision sets a precedent and empowers consumers to hold companies accountable for providing fair and timely services. It also serves as a reminder to insurers and other service providers to honour their obligations and refrain from unjustly denying legitimate claims.
