• Posted by CERC India
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SC condones delay in filing claim, tells insurer to pay up 


Om Prakash got his truck insured with Reliance General Insurance Co. Ltd. The truck was stolen in Rajasthan on 23 March 2010. Om Prakash visited the insurance company’s office but found it closed. The Rajasthan police insisted that the complainant accompany the police while searching for the truck. Hence he could only lodge a claim on 31st in Hissar.

The insurance company agreed to pay Rs. 7.85 lakh but did not settle the claim. Om Prakash sent a legal notice. Reliance General changed its tune and repudiated the claim on the grounds that it had not been informed about the theft immediately. Distressed, Om Prakash filed a complaint in the District Forum which dismissed the complaint.

He then appealed to the Haryana State Commission and then the National Commission. When neither heeded his appeal, he approached the Supreme Court.   

The Verdict 

The Supreme Court observed that it was true that the complainant had lodged the claim eight days after the theft but he had given convincing reasons for the delay. Moreover, the claim was genuine. It ordered the insurer to pay Rs. 7.85 lakh as well as compensation of Rs. 50,000 to Om Prakash with interest at 8% from the date of filing till realization.

Point of law 

According to the SC, rejection of claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. 

[Source: The order of the Supreme Court of India, New Delhi dated 4 October 2017 on Civil appeal no. 15611 of 2017]

United India pulled up for violating policy terms

Settled in court 2

Ashwin Dave had a mediclaim policy, covering his wife Kalpana as well, with United India Insurance Co. Ltd. Kalpana underwent a knee replacement surgery at Apollo Hospital. The hospital obtained Rs. 2.14 lakh as cashless provision. At the time of discharge, Ashwin was asked to pay Rs. 9,052 more and Rs. 4,096 for medicines. A claim was filed for the extra expenses of Rs. 13,148.   

After repeated reminders, the insurance company responded that the claim stood rejected. It said Rs. 2.14 lakh was the maximum amount payable for a PPN (preferred provider network) hospital for this disease.

Aggrieved, Ashwin contacted Consumer Education and Research Society (CERS), Ahmedabad.  CERS found that the rejection of the claim was not legally sustainable as the terms and conditions of the policy did not mention anything about a contract with a PPN hospital. A complaint was lodged before the District Forum. 


The Forum ruled in favour of Ashwin and Kalpana. It observed that the PPN contract was between the hospital and the insurance company. There was no evidence that the consumer was informed or his consent was taken on the conditions of the contract. The Forum concluded that it was an unfair trade practice by the insurance company. It ordered the insurance company to pay Rs. 13,148 to the couple with 9% interest, Rs. 2,000 towards compensation for mental harassment and Rs. 1,000 towards litigation costs.

Point of law

 An insurance company is bound to inform the policyholder about all terms and conditions.

[Source: The order of the Consumer Disputes Redressal Forum, Ahmedabad, dated 7 October 2017 on Complaint case no. 740/2015]


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