No denial of claim to insurance holders on the grounds of delayed filing, says SC
October 09, 2017In a big relief to claimants of insurance policies, the Supreme Court has ruled that insurance claims cannot be denied to a person merely on the grounds of delay in filing the claim.
With this landmark ruling, the bench comprising of Justice R K Agrawal and Justice S Abdul Nazeer has set aside the judgments pronounced by various consumer courts, including the National Consumer Disputes Redressal Commission(NCDRC) which ruled that insurance companies can deny the benefit of cover because of delay in filing the claims.
In the present matter, a person filed an insurance claim after eight days his insured truck was stolen. However, his claim was rejected on the ground that he has delayed in filing the claim. As per the terms of the policy, the policyholder was required to inform the firm immediately after accidental loss or damage to the vehicle.
The Supreme Court while directing the Reliance General Insurance Company to pay 8.35 lakhs to the insurance claimant held that “mechanical” denials on technical bases will only erode the confidence of the people in the insurance industry.
Justice Nazeer noted that “Technically, the owner is under an obligation to intimate the insurer as soon as possible about the theft of the vehicle. Nevertheless, this condition should not stop the genuine claims for settlement, particularly in circumstances where the delay is intimation or submission of documents is due to unavoidable circumstances. If the insurer rejects the claim of the then it needs to be on valid grounds.”
While deciding the settlement of such insurance claims, the insurer needs to be practical and understand that the person who has lost his vehicle will not approach an insurance company straight away. He will first try and find his vehicle. If the person claiming the insurance satisfactorily explains the reason of delay then his claim should not be rejected.
The bench said that the condition denying the delay shall not be a shelter to repudiate the insurance claims which have otherwise proved to be genuine. The court highlighted that the Consumer Protection Act was meant to protect the interest of the consumers.
With this landmark ruling, the bench comprising of Justice R K Agrawal and Justice S Abdul Nazeer has set aside the judgments pronounced by various consumer courts, including the National Consumer Disputes Redressal Commission(NCDRC) which ruled that insurance companies can deny the benefit of cover because of delay in filing the claims.
In the present matter, a person filed an insurance claim after eight days his insured truck was stolen. However, his claim was rejected on the ground that he has delayed in filing the claim. As per the terms of the policy, the policyholder was required to inform the firm immediately after accidental loss or damage to the vehicle.
The Supreme Court while directing the Reliance General Insurance Company to pay 8.35 lakhs to the insurance claimant held that “mechanical” denials on technical bases will only erode the confidence of the people in the insurance industry.
Justice Nazeer noted that “Technically, the owner is under an obligation to intimate the insurer as soon as possible about the theft of the vehicle. Nevertheless, this condition should not stop the genuine claims for settlement, particularly in circumstances where the delay is intimation or submission of documents is due to unavoidable circumstances. If the insurer rejects the claim of the then it needs to be on valid grounds.”
While deciding the settlement of such insurance claims, the insurer needs to be practical and understand that the person who has lost his vehicle will not approach an insurance company straight away. He will first try and find his vehicle. If the person claiming the insurance satisfactorily explains the reason of delay then his claim should not be rejected.
The bench said that the condition denying the delay shall not be a shelter to repudiate the insurance claims which have otherwise proved to be genuine. The court highlighted that the Consumer Protection Act was meant to protect the interest of the consumers.
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