Settling stolen car insurance can’t be delayed for long
When a vehicle is stolen, the insurance company is liable to indemnify the loss. But what happens when the vehicle is traced after a considerable lapse of time? Can the insurance company refuse to settle the claim? This issue was decided in an interesting case before the West Bengal State Commission in ICICI Lombard General Insurance Co Ltd v/s Dredging & Desiltation Co Pvt Ltd, in Appeal No 748 of 2013 decided on 22.1.2015.
Case Study: The insured had a Tata Indica which was insured by ICICI Lombard. It was stolen on 30.6.2007. The loss was intimated to the insurance firm. The papers sought to process the claim were also submitted.
In mid-July, the insurance firm asked the insured to sign documents for transfer of the vehicle in its favour, should it be traced. All documents were executed. The insured then bought a new car on 22.8.2008.
Surprisingly, the insurance firm sat over the claim. After more than 15 months, the insurance company asked the insured to withdraw the claim, contending that the stolen vehicle with a fake number plate but similar engine and chassis number had been traced by the police. Else, the insurance company threatened to treat the claim as "no claim" and close the file.
The insured filed a consumer complaint before the Kolkata district forum, which was contested by ICICI. As the forum allowed the complaint, holding the insurance company liable to settle the claim, ICICI appealed to the state commission.
The commission observed that the vehicle was traced after two years. In the intervening period, the insured complied with all formalities for processing the claim. Even the vehicle transfer forms were signed. Thereafter, a new vehicle was purchased. The insurance firm was at fault for sitting over the claim for a long time. Now, after a lapse of over two years, there would hardly be any point taking delivery of the recovered vehicle which was in a dilapidated condition.
The commission indicted ICICI for adopting delaying tactics by demanding documents in phases over a year, instead of asking for everything at one go. The commission observed that a vehicle is purchased to serve everyday needs. If a claim is held up for an inordinate period on the off chance that the vehicle might be recovered, it frustrates the very purpose of opting for insurance. When the insured has purchased a new vehicle after a considerable period of time, it cannot be compelled to accept the stolen car, which is presumably not in a roadworthy condition.
Accordingly, the commission held that the insured was entitled to get the claim. It directed the insurance company to pay the depreciated value of Rs3,89,338 and take over the recovered vehicle.
Article referred: http://timesofindia.indiatimes.com/business/india-business/Settling-stolen-car-insurance-cant-be-delayed-for-long/articleshow/46016018.cms
When a vehicle is stolen, the insurance company is liable to indemnify the loss. But what happens when the vehicle is traced after a considerable lapse of time? Can the insurance company refuse to settle the claim? This issue was decided in an interesting case before the West Bengal State Commission in ICICI Lombard General Insurance Co Ltd v/s Dredging & Desiltation Co Pvt Ltd, in Appeal No 748 of 2013 decided on 22.1.2015.
Case Study: The insured had a Tata Indica which was insured by ICICI Lombard. It was stolen on 30.6.2007. The loss was intimated to the insurance firm. The papers sought to process the claim were also submitted.
In mid-July, the insurance firm asked the insured to sign documents for transfer of the vehicle in its favour, should it be traced. All documents were executed. The insured then bought a new car on 22.8.2008.
Surprisingly, the insurance firm sat over the claim. After more than 15 months, the insurance company asked the insured to withdraw the claim, contending that the stolen vehicle with a fake number plate but similar engine and chassis number had been traced by the police. Else, the insurance company threatened to treat the claim as "no claim" and close the file.
The insured filed a consumer complaint before the Kolkata district forum, which was contested by ICICI. As the forum allowed the complaint, holding the insurance company liable to settle the claim, ICICI appealed to the state commission.
The commission observed that the vehicle was traced after two years. In the intervening period, the insured complied with all formalities for processing the claim. Even the vehicle transfer forms were signed. Thereafter, a new vehicle was purchased. The insurance firm was at fault for sitting over the claim for a long time. Now, after a lapse of over two years, there would hardly be any point taking delivery of the recovered vehicle which was in a dilapidated condition.
The commission indicted ICICI for adopting delaying tactics by demanding documents in phases over a year, instead of asking for everything at one go. The commission observed that a vehicle is purchased to serve everyday needs. If a claim is held up for an inordinate period on the off chance that the vehicle might be recovered, it frustrates the very purpose of opting for insurance. When the insured has purchased a new vehicle after a considerable period of time, it cannot be compelled to accept the stolen car, which is presumably not in a roadworthy condition.
Accordingly, the commission held that the insured was entitled to get the claim. It directed the insurance company to pay the depreciated value of Rs3,89,338 and take over the recovered vehicle.
Article referred: http://timesofindia.indiatimes.com/business/india-business/Settling-stolen-car-insurance-cant-be-delayed-for-long/articleshow/46016018.cms
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