Delay in intimation of theft no reason to deny claim: Consumer Panel

Ramkrishan Upadhyay

Chandigarh, May 4

Delay in intimating theft is no valid reason to deny the claim. Observing this, the District Consumer Disputes Redressal Commission has directed an insurance company to pay Rs 50,631 i.e. Insured Declared Value (IDV) of the stolen scooter to a resident, along with interest @ 9 per cent per annum from the date of the rejection of the claim.

The commission also directed the company to pay Rs 15,000 for causing mental agony and physical harassment and Rs 10,000 as litigation cost to the complainant.

The commission pronounced the order on a complaint of Kanwaljit Kaur, a resident of Kharar, Mohali district.

Kaur, in the complaint filed through advocate Devinder Kumar, said she had purchased a Honda Activa scooter in 2018. The vehicle was stolen from the parking of Fragrance Garden, Sector 36, Chandigarh, on November 23, 2018. Intimation about the theft was given to the police after a delay of five days. The insurance company, Shriram General Insurance Company, was intimated about the theft after a delay of 74 days from the date of the alleged theft.

She alleged that the insurance company had repudiated her claim on the ground that there was a delay of 74 days in informing the company about the theft.

The company justified its stand and said as per condition No.1 of the policy, the claim had to be intimated to the insurance company immediately upon the occurrence of any accidental loss or damage. The complainant had failed to inform the insurance company about the theft of the vehicle well within time. Hence, the claim of the complainant was rightfully repudiated vide letter dated August 1, 2019 being in violation of the terms and conditions of the policy. Pleading that there is no deficiency in service on its part, a prayer for the dismissal of the complaint was made.

After hearing the arguments, the commission said it was true that there was a delay of 74 days on part of the complainant in informing and lodging its claim before the insurance company. Nonetheless, it is pertinent to note that the insurance company had not repudiated the claim on the ground that it was not genuine. It had repudiated the claim only on the grounds of delay.

When the complainant had lodged the FIR within a reasonable period after the theft of the vehicle, and when the police had issued non-traceable certificate under Section 173 of the CrPC, the insurance company could not have repudiated the claim merely on the ground that there was a delay in intimating the insurance company about the occurrence of the theft.

The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy holders in the insurance industry. The commission said in view of this, the company is directed to pay Rs 50,631 (i.e. Insured Declared Value (IDV) of the vehicle) to the complainant, along with interest @ 9 per cent per annum. The commission also directed the firm to pay Rs 15,000 for causing harassment and Rs 10,000 as litigation cost.