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Insurance company told to pay up for stolen auto - Cannot reject for late premium payment

I: A consumer forum has held that an insurance company cannot reject a claim merely on the ground that the premium was received late. The forum directed IFFCO Tokio General Insurance Company to pay Andheri (E) resident Arvind Pithva the insured amount of Rs1.25 lakh for his stolen autorickshaw along with Rs55,000 compensation.

Pithva had purchased the rickshaw on a loan for Rs1.25 lakh and it was insured with the company. The insurance was valid from June 21, 2008 to June 21, 2009. According to a complaint filed with the Mumbai District Consumer Disputes Redressal Forum, he had parked the rickshaw in front of his house on June 26, 2008, but the next morning, he could not find it.

Pithva filed a complaint with the Andheri police, intimated the company about the theft and filed his claim. But the insurance claim was rejected. The company told Pithva that since the premium was paid on June 25, 2008, it was not liable to pay the insurance amount. The police informed the court that they could not find the thief. Pithva filed the complaint on January 7, 2011 and submitted a copy of the FIR as evidence.

The insurance company filed its reply and iterated its stand. It told the forum that since the cheque for the premium was deposited only on June 25, 2009, the insurance policy was invalid and it was not responsible for reimbursement of the claim. The company stated that the policy was active only from June 27, 2008.

Taking the FIR copy into consideration, the forum observed that it was established that the vehicle was stolen on the intervening night of June 22-23, 2008. It also found substance in Pithva's statement that he had issued the cheque before the incident and it was not his fault that the company encashed it only on June 25, 2008.

The forum pointed out that the insurance papers showed the policy was valid from June 21, 2008. "This proves that the cheque was issued by the complainant before the theft," the forum said.

Article referred: http://articles.timesofindia.indiatimes.com/2013-08-15/mumbai/41413194_1_insurance-claim-consumer-forum-cheque

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