The State Consumer Disputes Redressal Commission has ordered an insurance company to pay Rs 2 lakhs to a Delhi resident for delay in offering the settlement of claim for car theft and causing him mental agony.
The commission also asked the company to pay him Rs 25,000 as costs apart from ordering it to replace his stolen car in a month by making a direct payment to the dealer for an equivalent model.
Pankaj Maheshwari had filed a complaint online with Maharashtra’s State Consumer Commission in January 2019 against SBI General Insurance Co. stating that the company had failed to settle the insurance claim for theft of his Toyota Fortuner. The vehicle had been stolen in February 2017. The policy he had bought from them by paying a premium of around Rs. 50,000 was still valid. He claimed that though he had reported the theft to the police and the insurance company promptly, the insurance company had not settled his claim. He had sent numerous e-mails, made calls and visits to their office.
Maheshwari had purchased an additional protection, which included a ‘Return to Invoice’ rider, according to which he was entitled to a new vehicle or the equivalent money in case of a loss. The rider was applicable in case of a theft too.
The insurance company opposed the complaint stating that the model of the vehicle which was stolen was no longer being manufactured. They planned to settle the claim on the invoice value but Maheshwari refused. The commission found that the company had not followed its own complaint management policy, nor followed the claim procedure of the Insurance Regulatory and Development Authority (IRDA). According to IRDA rules, the insurer must offer a settlement within 30 days on the receipt of a survey report.
The commission observed that the company had issued the first offer of settlement after around six months after the theft. Commission President Justice AP Bhangale and member Dr SK Kakade also stated that the insurer had tried to settle the claim at a lower value than the value of new vehicle available of equivalent model. “We think that there is a deficiency in service in not providing proper and timely settlement of the claim as per the regulations of the IRDA,” the commission said and ordered the company to replace the vehicle with an equivalent vehicle by direct payment to the dealer.
It also ordered them to pay Rs 2 lakhs as compensation for mental agony and harassment, stating that the complainant had to suffer mentally as the claim was not settled in time.