Insurance Company Cannot Reject Cattle Insurance Claim On Basis Of Undisclosed Cooling Period Clause: Baramulla Consumer Commission
The District Consumer Disputes Redressal Commission, Baramulla/Bandipora, comprising Peerzada Qousar Hussain (President) and Nyla Yaseen (Member), held New India Assurance Co. Ltd. liable for deficiency in service and unfair trade practice for arbitrarily repudiating a cattle insurance claim on the ground that the death occurred within an alleged two-day cooling period, without placing any cogent policy condition on record to substantiate the defence.
Brief Facts
The complainant, Showket Ahmed Dar, had purchased a cattle insurance policy from New India Assurance Co. Ltd. for his livestock, valid from 28-03-2024 to 27-03-2025. During the subsistence of the policy, the insured cattle died on 20-04-2024. The complainant informed the insurer and submitted the required documents for settlement of the claim. However, the insurer repudiated the claim on the ground of a “cooling period” of two days under the policy terms and conditions.
Aggrieved by the rejection of the claim, the complainant approached the District Consumer Disputes Redressal Commission, Baramulla/Bandipora, alleging deficiency in service and unfair trade practice on the part of the insurer.
The insurer, in its written statement, contended that the claim had rightly been closed as “No Claim” since the death had occurred within the cooling period prescribed under the policy.
Observations and Decision
The Commission observed that it was an admitted fact that the cattle insurance policy was valid at the time of death of the insured cattle and that the insurer had failed to place on record any cogent policy condition clearly establishing the applicability of the alleged two-day cooling period.
The Commission held that such a condition could not be arbitrarily invoked to defeat a genuine claim unless it had been specifically mentioned in the policy and properly disclosed to the complainant at the time of purchase. Holding that the insurance company had arbitrarily and illegally repudiated the claim, the Commission found it liable for deficiency in service and unfair trade practice.
Accordingly, it directed the insurer to pay the insured amount of ₹55,000 with 7% interest from the date of filing of the complaint till realization, along with ₹20,000 as compensation for mental agony and harassment caused to the complainant.
Case Title: Showket Ahmed Dar Vs. New India Assurance Company
Case No.: 61/2024