Oriental Insurance Told To Pay Rs 2.51 Lakh After Flood Swept Away Car

The Shimla District Consumer Disputes Redressal Commission has directed Oriental Insurance Company to pay Rs 2.11 lakh for a car swept away in floods in July 2023. It also ordered the insurer to pay Rs 25,000 for mental harassment and Rs 15,000 towards litigation costs, taking the total payout to Rs 2.51 lakh.

In its October 31 order, the commission held that the insurer’s failure to settle the claim amounted to deficiency in service and an unfair trade practice. The vehicle was insured when the incident occurred, and the commission found no breach of policy conditions.

Car Was Washed Away In Heavy Rain

The complainant was the registered owner of a car insured with Oriental Insurance from July 26, 2022, to July 25, 2023. The policy’s insured declared value (IDV) for the car was Rs 2.12 lakh.

His driver had parked the car by Hatu Mata Road on July 19, 2023. Floodwater swept it away, and it was never found. The owner reported the loss to the police.

The owner said he informed the insurer, completed the required formalities, and sent a legal notice, but the claim remained unsettled. He then approached the consumer commission, seeking the car’s full IDV and compensation for mental harassment.

Insurer Cited Surveyor’s Assessment

Oriental Insurance argued that its surveyor had assessed the loss at Rs 1.85 lakh after deducting the car’s residual value. It said the owner had accepted this amount through an affidavit and agreed to provide a cancelled registration certificate, but failed to submit the document, according to a recent report by The Indian Express.

The commission noted that the owner’s complaint showed he was dissatisfied with the proposed settlement. It also observed that a surveyor’s assessment is not conclusive and can be departed from.

The order said the insurer was obliged under the policy to indemnify the loss, but had failed to do so before or after the complaint was filed. It directed the company to pay the claim amount along with the compensation and litigation costs.

The owner had informed the insurer and completed the claim formalities, but the matter still went to the consumer commission. Where a claim is disputed, policyholders can approach the consumer commission for redress.

FAQs

How much did Oriental Insurance have to pay the car owner?
The commission ordered Rs 2.11 lakh towards the claim, Rs 25,000 for mental harassment, and Rs 15,000 in litigation costs.

Can an insurer rely solely on a surveyor’s assessment to settle a claim?
The commission said a surveyor’s assessment is not conclusive and may be departed from.

What can a policyholder do if an insurance claim remains unsettled?
After raising the issue with the insurer, the policyholder can approach the relevant consumer commission for redress.