Skip to main content

Settling stolen car insurance can’t be delayed for long

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

Comments

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...

Loss of earning capacity, and not percentage of disability, must decide compensation, says HC

While computing compensation claims of accident victims, the victim's loss of earning capacity shall outweigh the percentage/extent of his disability, the Madras high court has felt. Justice R Mahadevan, enhancing the compensation payable to an injured driver by Rs 2 lakh, said: "In cases for compensation, it is not the disability, which is partial or total, alone that matters, it is the loss in earning capacity as a result of accident that is to be considered." R Murali, driver of a mixed concrete vehicle, met with an accident in January 2009 and suffered injuries in hip, right leg and ankle. He claimed loss of 100% earning capacity and sought appropriate compensation along with 12% interest rate. However, as the disability certificate issued by a doctor pegged the percentage of his disability at 60%, the deputy commissioner of labour-II, awarded Rs 3.12 lakh as compensation, by fixing the monthly income at Rs 4,000. Aggrieved by the poor package, Murali filed the...

Section 138 NI Act: Omission To Mention Nature Of Debt Or Liability In Notice Does Not Render It Invalid

In Crl.MC.No. 3289 of 2015, B.SURENDRA DAS vs STATE OF KERALA, the court was considering a petition seeking to quash the criminal proceedings on the ground that no demand for payment of the amount of the cheque was made by the complainant as per the notice sent by him and therefore, the notice is defective and the proceedings initiated against the accused pursuant to such notice cannot be sustained. The court observed that there is no statutory requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. All the complainant has to do is to raise a demand for payment which is a notice to the debtor giving him time to pay but there is no format in which the notice is to be sent.