The state consumer commission has asked a bank to compensate a consumer whose insurance claim was rejected because the bank failed to forward a letter stating his change in address in time.
As per the complaint filed by Iftakar Barkati, he had hypothecated stocks worth Rs7,32,913 with Canara Bank against a loan. The bank had insured the stock with The New Indian Assurance Co.
While renewing the policy, Barkati had written to the bank about a change of address. However, the policy was renewed for the stock in the old address as the bank failed to forward the letter stating the chance to the insurance company before the policy was renewed.
Meanwhile the stock was damaged in 2005, but the insurance company rejected the claim stating that it was stored at a place not mentioned in the policy.
Barkati moved district consumer forum. The district forum directed the insurance company and bank to pay the claim amount with 9% interest and Rs10,000 towards the cost of complaint.
The insurance company however, challenged the order of the district forum before the state consumer commission contending that no written request was received regarding the change of address. However, the bank pleaded that they were not responsible for a lapse by the insurance company in not changing the address prior to renewal of the policy.
The consumer commission observed that district forum had erroneously placed the liability of the claim mainly against the insurance company. It further held that the Bank was obligated to verify the business address and that the bank was responsible for deficiency in service. It directed the bank to pay the entire claim.