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Insurance firm ordered to pay over Rs 4 lakh for car theft claim

Oriental Insurance has been ordered to fork out over Rs 4 lakh to a Mulund-based man after it rejected his claim using trickery. After his car was stolen, he had filed an insurance claim but owing to a delay in procuring the car’s registration certificate (RC) book, his claim was unfairly rejected.

On December 18, 2009 Chetan Kohli purchased an SUV for Rs 4,86,549. On January 8, 2010, his car was stolen and Kohli registered an FIR the next day with the Mulund police. Kohli then notified the insurance company via telephone that his car was stolen and they directed him to approach the office with all the car’s documents.


Representational picture

It was then that Kohli told the company that he was yet to receive the car’s RC book a document that is normally given some time after the car’s purchase, which is when they suggested that he gather all his papers together and only then file his claim. Kohli finally gave his formal claim to the company after receiving the RC book on April 6. This apparently ran afoul of the contract, which stipulated that a claim for vehicle theft was not payable if it was not reported within 48 hours.

Court ruling
Taking note of a Supreme Court decision that stated the 48-hour condition was “directory” and not “mandatory”, the South Mumbai Consumer Disputes Redressal Commission ultimately held the decision in Kohli’s favour.

After all, the vehicle was stolen less than a month after being purchased. “Repudiation... is not justifiable... the opposite party cannot repudiate the genuine claim of the insured simply on the ground that there was no communication within the stipulated point of time,” the court observed.

The court further observed that the company is to pay the entire amount of the vehicle with 9 per cent interest from 2010 onwards. The court, additionally, slapped a fine of Rs 20,000 on the company for causing mental agony and inconvenience by their unfair trade practices. 

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