No Disallowance of Claim by Insurance Company Merely on Delay in Reporting Vehicle Theft: Supreme Court

The Supreme Court said on Friday that the insurance company cannot dismiss the claim on the sole basis that there was a delay in notifying it of the theft of a vehicle.

A bench of Judges Sanjiv Khanna and Bela M Trivedi quashed an order of the National Consumer Dispute Redress Commission forwarded by the Oriental Insurance Company Ltd against the order to pay sum insured to Jaina Construction Company Limited in respect of the theft of Tata Camion Aïwa.

The higher court ruled that the NCDRC’s order was “erroneous”.

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“When the complainant filed the FIR immediately after the theft, and when the police after the investigation arrested the accused and also filed an appeal in the relevant court, and when the insured’s claim was not found to have merit, the insurance company may not have denied the claim simply on the grounds that there was a delay in notifying them of the theft,” the bench said.

In the case, the insurance company denied liability for the claim, saying there was a breach of policy condition number one which required immediate notice to the insurer of accidental loss or damage. , and that the plaintiff had implied that there had been theft after the delay of more than five months.

The district consumer forum allowed the plaintiff’s plea of ​​the amount insured with compensation of Rs 10,000 and legal costs of Rs 5,000. The State Commission dismissed the insurance company’s appeal, l requiring you to contact the NCDRC.

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