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Consumer Forum Cases in Insurance against insurance company
 
Gaurav Gupta Vs The New India Assurance Co. Ltd. (In the New Delhi District Consumer Forum 2012)
Case: Truck was stolen and claim was lodged for Rs 9.73 Lakh. Claim was rejected. Gaurav Gupta took the case to New Delhi District Consumer Forum.
Judgment: Consumer Forum decided that claim was rejected by the insurance company (New India Assurance Co. Ltd.) on imaginary speculations. Insurance company has been directed to pay Rs 9.73 Lakh + compensation of Rs 1.5 Lakh for rejecting his claim on imaginary speculations.
Asansol Mini Bus Association and Federation of West Bengal Truck Operators Association VS Insurance Regulatory and Development Authority (IRDA)
In the court of Calcutta High Court
Case: The increase in third party premium by the Insurance Regulatory and Development Authority (IRDA) has been challenged in Calcutta High Court on the ground that they were not given a fair hearing.
Judgment: The Calcutta High Court, in an order on June 18, 2012, quashed a notification by the insurance regulator raising premium on motor vehicles for third-party cover.
Implications: It is not clear what implications the order will have on premium. IRDA is likely to go in for appeal. However, the court rejected the request to stay the order. Although IRDA has not provided any directions to general insurance companies, most of the insurers would have got a copy of the order as several are party to the suit.
Asansol Mini Bus Association and Federation of West Bengal Truck Operators Association VS Insurance Regulatory and Development Authority (IRDA)
In the court of Calcutta High Court
Case: The increase in third party premium by the Insurance Regulatory and Development Authority (IRDA) has been challenged in Calcutta High Court on the ground that they were not given a fair hearing.
Judgment: The Calcutta High Court, in an order on June 18, 2012, quashed a notification by the insurance regulator raising premium on motor vehicles for third-party cover.
Implications: It is not clear what implications the order will have on premium. IRDA is likely to go in for appeal. However, the court rejected the request to stay the order. Although IRDA has not provided any directions to general insurance companies, most of the insurers would have got a copy of the order as several are party to the suit.
Refusal to renew a policy amounts to unfair practice
In this case Biman Bose vs. United India Insurance Company the insurer had refused to renew mediclaim policy of Biman Bose and his wife Alka Bose. The plea of Biman Bose was that he was being victimised because of the case he had slapped on the insurer. The judgement of the Supreme Court was that the refusal to renew the policy was arbitrary and unfair. Company was fined and asked to reinstate policy.
This case answers questions or fear of many customers who feel –Will it be that in the event of a claim the insurance company will refuse to renew the policy.
Insurer shouldn’t take over 6 months to settle claim
In this case Kunti Devi had complained to IRDA that HDFC Standard Life had not settled claim even after 12 months. The stand of the company was that it was investigating the cause of death and will take some more time.
IRDA ruled that investigation should not take more than 6 months from the date of claim. Insurer was fined Rs 5 lakhs. With such cases we get the confidence that insurance companies will move towards settlement of the case within a reasonable time.
Shiv Kumar Gupta vs New India Assurance Co. Ltd.
A district consumer forum has ordered New India Assurance Co. Ltd. in May 2012 to pay a policy-holder Rs.60,000 for refusing to reimburse expenses incurred on hospitalization.
Shiv Kumar Gupta had spent Rs.45,252 on his son’s hospital stay in 2010. The district consumer disputes redressal forum has ordered the company to reimburse the amount and also pay Rs.10,000 as compensation for “harassment’ and “mental agony” and Rs.5,000 as litigation cost.
The insurance company refused to pay claiming Gupta had not provided all documents. Gupta informed the third party administrator of the company of his son’s hospitalization on December 7, 2010 and submitted documents. He was told his claim was being processed. The company later rejected it arguing that doctor’s prescription slip and IPD paper were missing.
“Despite the fact that the insurance company has received the policy premium when the benefits were required to be extended to the complaint / family members it closed the claim without valid reason,” said the forum.
S N Bansal vs Orientl Insurance Company Ltd March 10,2008
Rakesh Bansal was to deposit jewelllery in his bank locker. When he found the parking lot at the bank full, he decided to visit a doctor first. The jewellery he perhaps thought, was safe under neat his seat. However, when he returned, he found his car itself missing. He was fortunate to have an insurance covers for his vehicle and householder’s policy for the jewellery. Or so he thought till the insurance company repudiated his claim. After he lodged a complaint with the insurance ombudsman in Delhi, the company argued that it would indemnify the loss of the car but not the jewellery, as he had not taken: due care and caution” as required under the policy.
The ombudsman however dismissed the contention and directed the insurer to pay the claim amount.
Sadhan Chakra borty Vs the New India Assurance Company Ltd (May 23, 2007)
In this case the insurance company did not send a surveyor/ Investigator for three months after the theft of jewellery was reported by the client. As the time had passed the client got grills and the latch fixed. After a gap of 3 months when the surveyor went for visit he reported that there were no signs of “violent and forcible entry” and hence rejected the claim. The ombudsman held that this argument of insurance company was unacceptable. The company was instructed to pay.
Madras High Court raps Insurance Company
In a knuckle jerking judgment, recently Madras High Court has admonished a PSU in a MACT appeal. Here is part reproduction of what appeared in Press
“Making a mockery of the national litigation policy, which aims to bring down new cases and appeals by the government, a public sector insurance company has filed an appeal against an accident compensation of `6,000. Worse, it has been fighting the case for the past eight years, and has incurred`.6,100/- as case expenditure alone. Rapping the National Insurance Company Limited for the thoughtless action, Justice K Chandru of the Madras high court has dismissed its revision petition, describing it as abuse of the process of law.
The matter relates to a road accident on June 24, 2001, when a van met with an accident injuring three persons near Sevattipatti in Dharmapuri district. After taking treatment, the injured made claims and they were examined by the claims tribunal. In March 2002, the tribunal ordered `.6,000/- each to the claimants. The insurance company challenged the award in the high court, that too after a delay of 1,331 days.
Dismissing the company's petition on Thursday last, the judge quoted extensively from Union law minister M Veerappa Moily's statements decrying compulsive appeals and litigation for the sake of litigating. "Today, in the field of insurance, where there are private operators are also, a public sector insurer must think twice before venturing into a litigation and must consciously make a cost-benefit analysis. They should not end up being penny-wise pound-foolish," Justice Chandru observed.”
Whilst driving a judgment admonishing Insurer, the Hon’ble Judge observed that there was no explicable reason for the delay in filing appeal and also pointed out to the provision of appeals which prohibited appeals when amount is less than Rs.10000/-
It would be unfair to make any comment without knowing full facts of the case; yet the amount involved does not make it a fit case for appeal, even if any substantial point of law had been involved. From the little information available, this appears to be a petition filed by persons travelling in a goods carrier after tipping off the driver of the van. Obviously, the Goods carrier is not intended for passenger traffic and the Insurers should not be fastened with liability where none exists.
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