Mere Suspicion Cannot Defeat Genuine Claim”: Chandigarh Consumer Commission Holds Shriram General Insurance Liable For Arbitrary Repudiation
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Shri Amrinder Singh Sidhu (President) and Shri B.M. Sharma (Member), has held that mere suspicion regarding the cause of loss, unsupported by cogent evidence, cannot justify repudiation of a motor insurance claim. Observing that the insurer failed to substantiate its allegations of mismatch between the cause...
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Shri Amrinder Singh Sidhu (President) and Shri B.M. Sharma (Member), has held that mere suspicion regarding the cause of loss, unsupported by cogent evidence, cannot justify repudiation of a motor insurance claim.
Observing that the insurer failed to substantiate its allegations of mismatch between the cause of accident and the damages, and could not establish that non-registration of an FIR invalidated the claim, the Commission held Shriram General Insurance Company Limited guilty of deficiency in service and unfair trade practice.
Brief facts
The complainant, Harminder Pal, was the owner of a car, which was insured with Shriram General Insurance Company Limited for the period 03.09.2020 to 02.09.2021 with an Insured Declared Value (IDV) of ₹4,00,000. On 15.12.2020 at about 4:30 AM, the insured vehicle met with an accident while travelling from Nanauta to Chandigarh via Nakur Road. The car, driven by Ravinder Singh, allegedly lost control and collided with a tree, causing severe damage.
Since there was no third-party injury, no FIR was lodged. However, the accident was immediately intimated to the insurer through its toll-free number, upon which the claim was registered and a surveyor was appointed.
Following the spot survey, the damaged vehicle was taken to an authorised repairer, who prepared a repair estimate dated 19.12.2020 for ₹7,30,504.85. The complainant also submitted an affidavit detailing the accident circumstances. The insurer later sought clarifications, which were duly furnished.
Despite this, the insurer repudiated the claim on 05.04.2021, marking it as “No Claim” on the ground that the cause of loss did not match the damages reflected in the photographs.
Aggrieved, the complainant approached the District Consumer Commission alleging arbitrary repudiation. He contended that he had promptly intimated the insurer, cooperated with the survey process, and supplied all required documents.
Contentions of the Insurance Company
Shriram General Insurance Company Limited admitted that the vehicle was insured during the relevant period and that a claim was lodged for the accident dated 15.12.2020. However, it alleged that the driver was driving rashly, with a possibility of drinking and driving, and pointed out that no FIR or MLC was submitted, which it claimed were essential for processing the claim.
The insurer stated that the claim was repudiated due to a mismatch between the stated cause of loss and the damages shown in the photographs. It further submitted that the surveyor assessed the loss at ₹3,75,513.84 and that its liability was governed strictly by the policy terms, denying any deficiency in service and seeking dismissal of the complaint.
Observation and Decision of the Commission
The Commission observed that it was undisputed that the vehicle was insured with the opposite party and that the accident occurred during the currency of the policy. It noted that the claim was repudiated on the ground that the cause of loss did not match the damages shown in the photographs.
The Commission rejected the insurer's defence regarding alleged rash driving and non-registration of FIR, observing that these grounds were not substantiated with cogent evidence. It held that the burden to prove discrepancies or lack of authenticity of the accident lay on the insurer, and mere bald allegations were insufficient.
Holding the repudiation to be deficiency in service and unfair trade practice, the Commission partly allowed the complaint and directed the insurer to pay ₹3,75,514/- (as assessed by the surveyor) with interest at 9% per annum from 05.04.2021 till realisation, along with ₹20,000/- towards compensation and litigation expenses.
Case Title: Harminder Pal v. Shriram General Insurance Company Limited
Case No.: CONSUMER COMPLAINT NO. DC/AB1/44/CC/278/2021