Insurance firm fined for denying claim for stolen auto

Citing a ruling by the apex court, the District Consumer Disputes Redressal Forum, Chennai (North), directed a private insurance company to pay up the claim amount and also a compensation to an auto-rickshaw owner-driver whose vehicle was stolen more than three years ago. The firm had denied him the insurance amount, maintaining that he had filed the claim eight days after his vehicle was stolen.

Manikandan's vehicle was insured with the Cholamandalam General Insurance Company Limited, he said, adding that the insurance was being renewed without fail. The latest insurance was valid from August 2015 to August 2016.

Manikandan said he had approached the police immediately. The sub-inspector of Pulianthope police station also stated that they received the information the next day itself – though an FIR was filed only on October 9. However, the insurance company said Manikandan informed them on September 18, and contended that they were not liable to pay the insured amount if there was any delay as has been stated in the terms and conditions.

The complainant pointed out that he had obtained a bank loan to purchase the auto in August 2013, and was under obligation to repay the loan. He added that it was his only source of income.

However, the forum cited a Supreme Court judgement that said insurance companies should settle claims on non-standard basis. It held that there was deficiency in service as the claim had been wrongly rejected, and directed the company to pay 75 per cent of the value of the vehicle in the Insurance policy at the time of theft (Rs 82,500). It also directed it to pay Rs 10,000 as compensation, besides a sum of Rs 5,000 towards litigation.

The amount should be paid within six weeks, or pay nine per cent interest till the date of the payment.