The Jammu and Kashmir State Consumer Disputes Redressal Commission has directed ICICI Lombard to pay Rs 22.99 lakh to a resident of Baramulla whose house suffered severe damage during the 2017 flash floods. The commission held the private insurer liable for deficiency in service due to its failure to properly address and settle the policyholder’s claim.
The panel, presided over by President Nighat Sultana and member Maheep Gupta, ordered the compensation for Mohammad Ishaq Rather. The total award includes Rs 15 lakh for physical property damage, Rs 7.64 lakh to account for the delayed settlement—calculated with a 6 percent annual interest rate applied from December 27, 2017, to June 24, 2026—and Rs 35,000 to cover mental agony and litigation expenses.
Failure To Defend Case
Rather’s residential property, which carried a Rs 30 lakh insurance policy with ICICI Lombard, was heavily damaged on April 6, 2017, following intense rains and subsequent flash floods. After the insurer rejected his claim on the grounds that the damage was not caused by an event covered under the policy, Rather turned to the consumer commission for assistance.
According to the commission’s findings, ICICI Lombard failed to mount an effective defense. Although the firm’s representatives appeared before the commission on August 20, 2018, they subsequently failed to attend proceedings for more than six months. This extended absence resulted in the company forfeiting its right to file a formal written response or submit evidence. Additionally, the insurer made no attempt to cross-examine Rather or any witnesses.
Disputed Damage Assessment
On October 9, 2024, legal counsel for ICICI Lombard submitted a “no claim” survey report to the commission. However, the commission noted that the surveyor’s own documentation contradicted the insurer’s stance, as it recorded that the building remained in a damaged condition with major cracks across multiple areas, while the floors and surrounding ground remained unaltered.
The commission remarked that ICICI Lombard was responsible for failing to take the necessary steps to safeguard its interests. It pointed out that the insurer did not even provide photographic records of the damage, which would have allowed the commission to draw its own independent conclusions.
While Rather sought compensation, the commission chose not to classify the incident as a total loss because there was no evidence or claim of a complete structural collapse. Consequently, the panel awarded half of the insured amount as fair compensation on an approximation basis.
Systemic Reforms Recommended
In light of the oversight, the commission advised all insurance companies and banking institutions to review and improve their case monitoring systems to prevent similar avoidable adverse rulings.
