ICICI Lombard asked to pay Rs 3.38 lakh to customer

Holding ICICI Lombard General Insurance Co. Ltd. ‘clearly negligent’ in repudiating a vehicle accident claim, the State Consumer Disputes Redressal Commission has asked it to pay, with interest, Rs. 3.38L to a policy holder. 

Of this amount, Rs 50,000 is to be paid for the mental harassment and agony caused to him. If this is not paid within a month of the order, an interest of 12 per cent will be levied on the company. 

The appeal had been filed with the state commission, as a district forum had dismissed the policy holder’s complaint.

The man, a Prabhadevi resident, had paid a premium of about Rs 22,000 for his Hyundai car. It had met with an accident on 29 June, 2013 when the insurance policy for the car was in force. He was commuting by his Hyundai car from Chembur towards South Mumbai when, while averting a collision with a heavy vehicle which was approaching from the opposite direction, he had hit a road divider. The car would not start after the accident. He had got it repaired at a cost of around Rs. 2.78 lakhs.

The insurance company relied on its surveyor’s report and agreed to pay only a little over Rs 33,000 and repudiated the claim of Rs 2.78 lakhs, stating that there were no external damages to the vehicle. 

Before the commission and well as earlier before the lower forum, ICICI Lombard had stated that the damage was due to a ‘mechanical failure’ and that this is excluded in the terms and conditions of the policy.

Justice AP Bhangale and member Dr SK Kakade said in their order that they found that the survey report does not mention the term ‘mechanical failure’ and found that the insurance company was clearly negligent in not approving the claim. 

Regarding the order of the district forum in which it had dismissed the customer’s claim, the state commission said that the district forum ‘erred’ in finding that there was no sufficient evidence that the expenses were incurred by the customer. The forum should have accepted tax invoices as evidence, the order stated. The commission also said that the district forum erred in accepting the theory of mechanical failure, based on which it had dismissed the complaint, noting that the survey report nowhere mentions the term.

“It is our opinion that the appellant, the original complainant, is entitled for the reimbursement of the expenditure incurred and recovery of the claim amount,” it said, but declined to order a compensation of Rs 5 lakhs for mental agony as claimed and directed payment of Rs 50,000 instead.

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