Insurance can’t be denied for delay in alerting about theft

BENGALURU: Delay in informing the insurer about the theft of the vehicle is no grounds to deny the customer his/her rightful claim, a Bengaluru consumer court has ruled, ordering a firm to settle its dues towards a farmer’s stolen scooter.

On January 25, 2016, a Honda Dio scooter of Satish R, 31, from Attibele was stolen from his compound. The farmer rushed to Attibele police station only to be told by officers to search for it thoroughly. After combing the area and enquiring with people, Satish informed the Reliance General Insurance Company Ltd on MG Road that his scooter that was insured with the firm for a monthly premium of Rs 1,223 had been stolen. But, the insurer insisted on an FIR to take proceedings forward.

After running around for over a month, the farmer managed to obtain an FIR from Attibele police on February 29, 2016. With the investigation concluding the scooter was indeed stolen and remained untraceable, Satish submitted all documents to the company seeking Rs 38,000.

But his claim was rejected, stating that he had violated the code of informing the insurer on time regarding the theft. Satish approached the Bengaluru IVth Additional District Consumer Redressal Forum on November 16, 2017.

The Reliance lawyer argued the customer had alerted about the theft only a month later and obtained an FIR a few days after that. It was violation of policy terms and conditions and the delay had jeopardised the police probe and the insurer’s investigation into the vehicle theft claim.

After close to 31 months of litigation, the judges noted that the customer had been denied his money despite paying the dues to his insurer. The Supreme Court has ruled that delay in intimation doesn’t hold good in cases where a person has genuinely lost his/her vehicle and there is a police report confirming it.

On June 2, the court ordered the firm to pay the insured value, Rs 38,000 of the scooter with an additional 7% interest, Rs 10,000 towards litigation expenses, all within 45 days from the order.

Source: The Times of India