National Insurance Told To Pay Rs 4 Lakh After Fire Claim Dispute

A consumer commission in Jammu and Kashmir has directed National Insurance Company to pay Rs 4 lakh to a shopkeeper whose insured stock and other items were destroyed in a fire over a decade ago.

The District Consumer Disputes Redressal Commission (DCDRC), Baramulla/Bandipora, observed that the insurer could not claim that no insurance claim had been lodged while simultaneously relying on a surveyor’s report prepared after the fire.

The order was passed by commission president Peerzada Qousar Hussain and member Nyla Yaseen in a complaint filed by Manzoor Ahmad Dar against J&K Grameen Bank and National Insurance Company.

Shop And Stock Destroyed In Fire

Dar operated Manzoor Kiryana Store at Jalsheeri in Baramulla. The shop was insured with National Insurance Company when it was gutted in a fire on January 11, 2015, according to a recent report by LiveLaw.in.

According to the complaint, the fire destroyed the stock kept inside the shop, along with a refrigerator, computer and several other items. Dar estimated the total loss at around Rs 7 lakh.

He told the commission that the insurer was informed soon after the incident and that a surveyor had visited the damaged premises. Dar said he had completed the required formalities, but the insurer did not settle his claim.

National Insurance denied any deficiency in service. It argued that Dar had not properly lodged or registered the claim. It also questioned whether the complaint had been filed within the prescribed limitation period.

The insurer maintained that the loss could be settled only based on an assessment conducted by an approved surveyor.

Insurer’s Stand Found Contradictory

The commission found the insurer’s position inconsistent. It noted that the surveyor’s visit and the preparation of a survey report showed that the insurance company had received information about the fire and had initiated the claim assessment process.

The surveyor had assessed the loss at Rs 1.35 lakh. However, the commission found that the report did not offer convincing reasons for restricting the loss to that amount.

It also considered the police report and the report prepared by the Fire and Emergency Services. Both supported the shopkeeper’s claim that the fire had caused extensive damage to the insured stock and other property.

The commission, therefore, declined to rely entirely on the surveyor’s reduced valuation.

Insurer Given Four Weeks To Pay

National Insurance was directed to pay Dar Rs 4 lakh, along with interest at six per cent a year from the date on which the complaint was filed until the amount is paid.

The commission also awarded Rs 50,000 as compensation for mental agony and Rs 30,000 towards litigation expenses.

The insurer was given four weeks to comply with the order. In case of failure, the awarded amount, including compensation, will carry interest at seven per cent a year from the date of filing of the complaint until payment.

The ruling shows that while a surveyor’s report is an important part of an insurance claim, its assessment may be questioned when the findings are unsupported or contradict other available evidence.

FAQs

1. Why did the commission reject National Insurance’s claim that no fire claim was lodged?

The commission said the insurer’s stand was contradictory because it had appointed a surveyor who visited the premises and assessed the loss.

2. Is a surveyor’s assessment final in an insurance claim?

No. A consumer commission may reject or question the assessment if it lacks adequate reasons or conflicts with other supporting evidence.

3. What compensation was awarded to the shopkeeper?

National Insurance was ordered to pay Rs 4 lakh with interest, Rs 50,000 for mental agony, and Rs 30,000 towards litigation expenses.