Car insurer directed to reimburse Ludhiana resident’s theft claim of ₹7.30L

Consumer Disputes Redressal Commission directed insurer to pay composite costs and compensation of ₹7,000 to the complainant, a resident of Model Town, Ludhiana

The District Consumer Disputes Redressal Commission directed United India Insurance Co Limited to reimburse a ₹7.3 lakh claim for the theft of a car and pay ₹7,000 as compensation to a Ludhiana-based complainant.

The car insurer of a Ludhiana resident was directed to reimburse his theft claim of ₹7.30L. (iStockphoto)

Deep Aman Singh of Model Town Extension had submitted a complaint against United India Insurance Co Limited, Ludhiana, through its regional manager (referred to as opposite party 1 or OP1) and United India Insurance Co Limited, Hoshiarpur, through its branch manager (OP2)

The complaint

The complainant claimed that he was the registered owner of a Honda City car, which had been insured by the aforementioned insurance company and the policy was valid from December 30, 2017 till December 29, 2018m with an ID value of ₹7,30,000.

The car was stolen by an unidentified person on October 10, 2018, from outside his house, following which a case was registered with the police.

Intimation regarding the theft of the car was also sent to the OPs telephonically on the same date and a claim was registered in the records of the OPs on October 11, 2018.

The complainant said he completed all the formalities as required by the investigator appointed by the OPs and also supplied all the requisite documents including copy of FIR, certified copy of untraced report, report of NCRB and key of the car but despite that the OPs failed to reimburse the claim.

The car was financed and hypothecated with Punjab & Sind Bank for a sum of ₹7,00,000.

The complainant claimed that he continued to pay the instalments to the bank despite the theft, adding that the insurance company repudiated the claim on the ground that the second key of the car was left in the dashboard when it was stolen. He, however, claimed that the said key of the car was damaged and was not working properly and the complainant intended to hand over the same to M/s. Lally Motors, the authorised dealer of Honda City for replacement.

Singh requested the Commission to direct the insurance company to pay the claim of ₹7,30,000 along with interest @12% per annum along with compensation of ₹2,00,000 and litigation expenses of ₹33,000.

However, resisting the complaint, the insurance company pleaded that the claim was correctly repudiated as it was found that the complainant left the second ignition key of the car in the dashboard of the car itself. This act, the insurer said, amounted to gross negligence.

The order

The Commission, in its order, observed that if the car was locked by the complainant, leaving a second key inside cannot be counted as an act of negligence on the part of the complainant.

“The complaint is allowed with direction to OPs to consider and reimburse the claim regarding theft of the car and to pay composite costs and compensation of ₹7,000 to the complainant,” it further said.