Mizoram Man Gets Rs 5 Lakh Compensation After Insurance Dispute

The Mizoram State Consumer Disputes Redressal Commission has pulled up National Insurance Company Limited (NICL) for denying a claim to a policyholder after cancelling his policy without consent, according to a recent Times of India report. The panel has ordered the insurer to pay Rs 5 lakh as compensation within 60 days.

Policy Cancelled, Claim Rejected

ZD Lalremthanga of Vaivakawn, Aizawl, had purchased a Standard Fire and Special Perils Insurance policy in September 2019. The cover was for Rs 1 crore and the annual premium paid was Rs 32,450.

Just a few months later, in April 2020, NICL cancelled the policy on its own and asked Lalremthanga to share his bank details so the premium could be refunded. He refused, saying he had bought the policy in good faith and had never agreed to such a cancellation.

The dispute came to a head when a landslide destroyed his building. In March 2021, Lalremthanga filed a claim with NICL, only to be told it would not be honoured because the policy had been cancelled. With no relief from the company, he moved the State Consumer Commission.

Commission Finds Deficiency In Service

The commission ruled that NICL’s unilateral cancellation and denial of claim amounted to “deficient service.” It said the insurer had failed to protect the interests of its customer and had not adhered to the principle of fairness. While Lalremthanga had sought a much larger payout, the panel decided on a compensation of Rs 5 lakh.

Consumer lawyers say the order is a reminder that policyholders have legal recourse when insurers act unilaterally. “Once a premium is paid, an insurance contract is binding on both sides. If companies walk away without consent, courts and commissions will step in,” said a Guwahati-based lawyer familiar with similar disputes.

The case also highlights the importance of reading policy documents carefully and keeping a record of all correspondence with insurers. In recent years, consumer panels across the Northeast have become more active in directing insurers to settle genuine claims and penalising them for arbitrary cancellations.

The order has struck a chord with policyholders in Mizoram, who view it as a push for stronger accountability in the sector. In a state often hit by landslides and floods, residents say the judgment underlines the importance of dependable insurance cover and of insurers honouring the promises made in their policies.