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Oriental Insurance Company to pay compensation for wrongfully denying Lost Car Claim

Distressed by the Claim Refusal by Oriental Insurance Company Limited on grounds of “Delay in Filing the Claim”, Mr. Kohli, a Mumbai resident and the car

By: MIC Newsdesk | 
Read Time: 2 minutes, 19 seconds | 
Last Updated: 15-06-2013

Distressed by the Claim Refusal by Oriental Insurance Company Limited on grounds of “Delay in Filing the Claim”, Mr. Kohli, a Mumbai resident and the car owner whose car was lost the very next of buying the same, filed a complaint with Consumer Dispute Redressal Forum and has been compensated for the same.

The Facts:

Mr. Chetan Kohli had purchased a Bolero Sport 7 star vehicle on 18th December 2009 for a sum of Rs. 4.86 lakh. On the very next day morning the car was stolen. As soon as he was intimated about the theft of his car, he immediately filed an FIR with police and lodged a Lost Car Insurance Claim with the insurance company. The Insurance Company had then asked Mr. Kohli to submit all the original papers of the car, which Mr. Kohli did not have at that time. He had however intimated the Insurer that the car being new, the papers had still not been received from the RTO office. Thus, the Insurance Company, had advised him to collect all the legal documents and then file a claim.

Mr. Kohli could finally get the papers in March 2010. But, when he lodged a claim along with the papers, insurance company denied the same stating that claim was not informed within the mandatory 48 hours. Distressed by the order of the insurance company, Mr. Kohli filed a complaint with Mumbai District Consumer Disputes Redressal Forum in August 2010. In the forum, he argued that mandatory time period was not informed to him and that he was wrongly told to get the registration papers first and then approach the insurance company. Insurance company also re-iterated the same, which in fact worked in favour of Mr. Kohli.

On hearing both the parties, the forum passed the order in favor of Mr. Kohli and directed the insurance company to pay Rs. 4.86 lakh towards the claim and Rs. 1.54 lakh as compensation.  The forum in its order said that Mr. Kohli had in particular informed the insurer that he did not have the documents immediately after the theft of his car and that under such cases the claim cannot be denied. The order read out that, “We therefore hold that the insurance company cannot deny the valid claim of the claimant on the position that there was no communication within the mandatory time limit. The forum also clarified that the stipulation with regard to time limit in informing insurance claim is not mandatory but is directory.”

Forum also quoted a State Commission order which spelled that mandatory 48 hours clause is for the interest of the claimant and not for the benefit of the insurance company. The purpose of this clause is that an insurer can scrutinize the claim and assist the claimant as soon as possible.

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