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Consumer body orders insurance firm to pay Rs 25.61 lakh to power company over 'theft
Developing
In Short: The Delhi State Consumer Commission has directed National Insurance Company Ltd to pay Rs 25.61 lakh to a power transmission company after rejecting its insurance claim for a delay in reporting part of a theft.
The Delhi State Consumer Commission has ordered National Insurance Company Ltd to pay Rs 25.61 lakh to a power transmission company after a dispute over an insurance claim for the theft of materials from a 215-km power transmission project.
The commission found that the insurer's rejection of the claim due to a delay in intimation was an unfair trade practice and a deficiency in service, despite the insurer's argument that the power company was not a 'consumer' under the Consumer Protection Act, 2019.
The theft, which involved conductor wire and other materials, was reported to the police on March 30, 2017, and the loss was intimated to the insurer on April 19, 2017, 25 days after detection.
The power transmission company had previously approached the commission seeking payment of the insurance claim, compensation, and litigation costs, alleging that the insurer repeatedly delayed the settlement of the claim before rejecting it through a letter dated October 5, 2020.
The commission's decision highlights the importance of timely reporting and adherence to policy terms in insurance claims, emphasizing that insurers cannot reject claims solely on the basis of delays in intimation.
What's still developing
- The commission said the theft involved material spread across a 215-km project, making it difficult to assess the loss immediately.
- The insured was also required to take steps to minimise the loss, preserve affected parts for inspection, provide information and documents sought by the insurer, and inform the police in case of theft or burglary.
- The body’s president, Justice Sangita Dhingra Sehgal, and member Bimla Kumari heard a consumer complaint filed by a power transmission company, National Insurance Company Limited, over the rejection of an insurance claim arising from theft at its power transmission project.
- It also alleged that the company had failed to promptly report the theft and had violated the policy conditions.
Sources
- The Indian Expresslink