A consumer disputes forum in Hyderabad has directed an insurance firm to pay Rs 5.60 lakh to a 43-year-old businesswoman after determining that the company wrongfully denied her vehicle accident claim without adequate proof.
The bench of the District Consumer Disputes Redressal Commission, comprising President Vakkanti Narasimha Rao and member Suma Vala, held the insurer liable for deficiency in service as well as unfair and restrictive trade practices. The panel concluded that the company failed to submit substantial documentary evidence to back its allegations that the vehicle had suffered damage prior to the crash or that the owner had concealed its condition.
Under the ruling issued on August 18, the insurer must pay the complainant Rs 5 lakh toward the rejected policy claim, Rs 50,000 as compensation for physical trauma and mental agony, and Rs 10,000 to cover legal expenses. The entire amount must be remitted within 45 days.
Dispute Over Accident and Assessment
The matter originated from an incident on July 21, 2021, when the woman’s four-wheeler sustained front-end damage in an accident at Narsingi at around 10 p.m. While an authorized showroom estimated the repair expenses between Rs 4 lakh and Rs 5 lakh, the insurance company’s own surveyor subsequently assessed the total loss at Rs 6.21 lakh under Exhibit B-2.
Because the complainant restricted her claim to Rs 5 lakh under the policy, the commission limited the awarded claim amount to that exact figure.
The complainant formally notified the company about the mishap through a letter dated August 20, 2021. However, the insurer repudiated the claim on October 8, 2021, alleging that the vehicular damage had occurred prior to the reported collision and raising issues regarding ownership changes and non-disclosure.
Insurer Allegations Dismissed for Lack of Proof
Appearing for the insurer, advocate Gangadhar Rao Deshpandey contended that the policyholder breached policy stipulations by waiting eight days before reporting the incident, thereby preventing an immediate investigation. The company further argued that an investigator and surveyor had been engaged, and that a forensic report suggested the damages significantly predated the incident. The insurer also pointed to an ownership transfer dated July 20, 2021, asserting that the vehicle’s pre-existing state was not disclosed when coverage was obtained.
Represented by advocate Ramulu Gobbur, the complainant maintained that the accident fell squarely within the coverage terms and that notification had been submitted appropriately, arguing that the denial caused her unwarranted financial hardship.
Upon reviewing the submissions, the commission found that the insurer had not substantiated its claims of pre-existing damage with cogent documentary proof. The bench added that the assertions concerning ownership transfer and non-disclosure of the vehicle’s condition had similarly failed to meet the required standard of proof, warranting the rejection of the insurer’s defense.
