A district consumer disputes redressal commission in Chhattisgarh has held that an insurance company cannot reject a claim by citing policy exclusions that were never provided to the customer, ordering the insurer to pay over Rs 2 lakh in damages and compensation for rainwater damage to a luxury vehicle.
A three-member bench comprising President Dakeshwar Prasad Sharma and members Nirupma Pradhan and Anil Kumar Agnihotri directed the insurer to disburse Rs 1.75 lakh toward vehicle repair costs. In its August 24 order, the commission also instructed the company to pay Rs 20,000 for mental agony and Rs 7,000 to cover litigation expenses.
The panel held that turning down a claim under exclusionary provisions that were withheld from the policyholder constituted both a deficiency in service and an unfair trade practice, rendering those clauses legally unenforceable.
Water Ingress and Claim Repudiation
The dispute arose after rainwater entered the complainant’s car in August 2021 through a driver-side window that had been left slightly open. The water ingress caused extensive damage to the vehicle’s infotainment unit and other internal components.
The vehicle was covered under a private car insurance policy that was active from November 29, 2020, to November 28, 2021. Following the incident, the car owner incurred Rs 2.73 lakh in repair costs. An independent surveyor appointed by the insurance company assessed the admissible loss at Rs 1.98 lakh.
Despite the assessment, the insurer formally repudiated the claim on February 4, 2022. The company asserted that the policy did not cover rainwater damage and argued that leaving the vehicle’s window open amounted to gross negligence, which violated the terms of the insurance contract.
Omission of Key Documents
The car owner subsequently approached the consumer forum, contending that the insurer had never furnished the complete set of terms and conditions when issuing the policy. Consequently, he argued, the company could not invoke hidden exclusion clauses at a later stage to deny coverage.
During the proceedings, the commission scrutinised the documentation submitted by both parties. Evidence showed that the insurer had initially issued a four-page policy document to the customer, complete with distinct page numbers. However, when presenting its case before the forum, the insurance company produced only three pages of that document.
The company also introduced a separate, six-page booklet containing its detailed terms, conditions, and exclusions.
Unsupplied Exclusions Declared Ineffective
The commission ruled that this standalone six-page text could not be regarded as part of the vehicle’s insurance policy, as the original package given to the insured comprised only four pages.
The bench established that because the insurer failed to supply the policyholder with the relevant terms, conditions, and exclusion clauses at the time of purchase, those restrictions were not binding on the complainant.
