Insurance firm told to pay consumer Rs2 lakh

Insurance firm told to pay consumer Rs2 lakh

The State Consumer Dispute Redressal Commission recently penalised the New India Assurance company for failing to abide by its promise. The commission asked the firm to pay Rs2 lakh to the complainant with 12 per cent interest on the amount from 2004. Furthermore, the commission also directed the firm to pay an additional Rs25,000 towards the mental agony suffered by the complainant along with Rs5,000 for his legal expenses.

The State Consumer Dispute Redressal Commission recently penalised the New India Assurance company for failing to abide by its promise. The commission asked the firm to pay Rs2 lakh to the complainant with 12 per cent interest on the amount from 2004. Furthermore, the commission also directed the firm to pay an additional Rs25,000 towards the mental agony suffered by the complainant along with Rs5,000 for his legal expenses.

The case dates back to 2004 when the son of complainant Girish Kumar Sheth, a resident of Kemps Corner, was driving a vehicle owned by the complainant. There were four others in the car. The vehicle met with an accident and Sheth's son died on the spot. Sheth then claimed the insurance amount from the firm where the vehicle was insured. But the claim was repudiated on the ground that as per norms the vehicle had to be driven by the owner to claim the insurance amount.

Sheth then moved the district consumer forum, which had turned down the complainant's plea. Aggrieved by this order, the complainant approached the state commission. However, the insurance firm took the same stand again.

The state commission, after going through the arguments advanced by the complainant and the insurance firm, said: "It would not be open for the insurance company to refuse to honour the claims of five persons, who may be traveling in the insured vehicle at the relevant time. (Here there is a case for compensating for only one death). Insurance company claims that accident cover was provided only to owner/driver or a paid-driver but not to a person like insured's son. This is thoroughly illogical and irrelevant and if, we may so say, inhuman and cruel."

The commission further said: "In the present case, it is not the case of insurance company that the deceased was not holding a valid driving license or that there was any other breach of terms of policy. Deceased did hold a valid driving license and, therefore, to repudiate the claim on account of such death was most unfortunate and thoroughly unjustified."

Source: http://www.dnaindia.com/mumbai/report-insurance-firm-told-to-pay-consumer-rs2-lakh-2085019