Rohtak District Commission Holds New India Assurance Co. Liable For Wrongful Repudiation Of Valid Damaged Car Claim

Brief Facts:

The Complainant owned an 'i20 Sportz' car insured with New India Assurance Company Ltd. ("Insurance Company"). On May 14, 2017, while the Complainant's relative, Sumit, was driving the car from Rohtak to Ahmadabad, an accident occurred in Bhichhiwada, Rajasthan, resulting in injuries to Sumit and his friend Manjeet Singh. Subsequently, the damaged car was transported back to Rohtak. Despite promptly informing the Insurance Company and providing all necessary documents, the Complainant's claim for compensation, including repair charges amounting to Rs. 8,50,000/-, was not settled by the Insurance Company. The Complainant made several communications with the Insurance Company but didn't receive a satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Rohtak, Haryana ("District Commission") and filed a consumer complaint against the Insurance Company.

In response, the Insurance Company contended that there was a breach of insurance policy terms as the accident occurred on May 14, 2017, but the intimation was provided to the insurance company on June 9, 2017, by the Complainant. Additionally, the insured received compensation from the owner of the offending vehicle, leading to a compromise, and thus, seeking compensation from the Insurance Company would amount to double recovery. Furthermore, it contended that the final survey conducted by a surveyor assessed the loss at Rs. 1,74,310/-, which was significantly less than the Complainant's estimate.

Observations by the District Commission:

The District Commission noted that the Insurance Company argued the surveyor wrote five letters to the Complainant requesting the relevant documents, but the Complainant failed to submit them. However, discrepancies were found in the evidence provided by the Insurance Company. Only a 'No Claim Letter' was presented, leading the District Commission to conclude there was no proof of delivery or receipt of the letters by the Complainant. Furthermore, the documents presented by the Insurance Company to support their claim of compensation received by the Complainant from the owner of the offending vehicle lacked authentication, being mere photocopies without accompanying affidavits. Therefore, the District Commission determined that the Insurance Company's repudiation was unjust and indicative of deficient service.

Regarding the assessment of the vehicle's loss, the Insurance Company contended that the Complainant suffered a loss of Rs. 1,73,310/-, while the Complainant's estimate exceeded the Insured Declared Value (IDV) of the vehicle. However, upon reviewing photographs of the vehicle's condition, the District Commission concluded that the cost of repair surpassed 75% of the IDV, making it a total loss.

Consequently, the District Commission directed the Insurance Company to pay Rs. 3,70,000/- to the Complainant along with interest at 9% per annum from the date of filing the complaint. Additionally, the Insurance Company was instructed to pay Rs. 5,000 as compensation and Rs. 5,000/- for litigation costs.