Consumer rights
Claim by the book
Pushpa Girimaji

When you buy an insurance cover for your vehicle, you must not only ask the insurance company about the procedure to be followed in case of a claim, but also read carefully the terms and conditions mentioned in the policy. Failure to follow the conditions may jeopardise your claim settlement.

And that’s exactly what happened to Dharam Singh, who had bought a truck for Rs 2,50,000, with financial help from MGF (India) Ltd. On May 17, 1991, the truck was hijacked along with the driver, by some unknown miscreants. Now, when something like that happens, one immediately lodges an FIR in the hope that the police would trace the vehicle and the driver. Even if one is not very confident about the police’s ability to trace the vehicle, one still has to file such a complaint immediately because that is one of the conditions governing the policy. And one has to also immediately inform the insurance company, so that without losing time, they can start their investigation. In Dharam Singh’s case the central point was that he did not follow either of these conditions.

Section 1 of the policy said: "1.Notice shall be given in writing to the company immediately upon the occurrence of any accident or loss or damage and in the event of any claim`85. In case of theft or other criminal act, which may be subject of claim under this policy, the insured shall give immediate notice to the police`85."

However, for reasons best known to him, Dharam Singh lodged a police complaint after a delay of nearly two months. May be, he thought that he could get back the vehicle without the help of the police, but as far as the insurance company was concerned, by that delay, he had breached the policy condition. He also delayed informing the financier and only through a letter dated July 17, 1991, intimated the financier of the theft of the vehicle. Following this, the finance company said it had sent letters to the insurance company and had also followed them up with reminders. The insurance company however said it had not got any letters and in fact it came to know of the theft for the very first time through the letter of the financier dated June 11, 1993.

The dispute went before the consumer court at the state level, and the insurance company was asked to pay the insured amount along with the interest and compensation.. However, the apex consumer court before which the insurer filed an appeal disagreed with this view.

The National Consumer Disputes Redressal Commission pointed out that the complainants did not have any proof of having sent those letters to the insurance company, in the form of acknowledgements of receipt of the letters. They had also not submitted affidavits of the persons who had delivered these letters to the insurer, to prove that they had been submitted to the insurance company.

Said the Commission: "In the circumstances, we have no hesitation in holding that the said five letters were not sent and delivered to the appellant insurance company and copies thereof filed by the respondent number 2 (financier) have been forged obviously to cover up the delay in intimating the insurance company of the occurrence.

"Undisputedly, the FIR was lodged only on July 15, 1991. In our view, the conduct of the owner of the vehicle in having waited for about two months for lodging the report with the police is unnatural and raises suspicion in regard to the manner in which the insured truck was lost."

Saying that there was also a clear breach of condition no 1 of the policy on the part of the insurance policy holder, the apex consumer court said there was no deficiency on the part of the insurance company in rejecting the claim. It therefore set aside the order of the State Commission and even awarded Rs 10,000 as costs to the insurance company. (The New India Assurance Company vs Shri Dharam singh, First appeal no 426 of 2004, decided on July 4, 2006)

So always read the policy conditions carefully and follow them scrupulously. Do not give the insurer an opportunity to repudiate your claim. And whenever you make a claim or send any letter with regard to the claim, send it by registered post-acknowledgement due or send it personally and have someone at the insurance office sign the photocopy saying that they have received it. And keep all correspondence safe.