Fire Insurance Claim rejected due to direct entry of rain water

In the matter of Mr. Jagdish Lal Sharma
Vs
The National Insurance Company Ltd.

Insurance Ombudsman Date of award – 28.03.2016

The complainant had taken a Fire insurance policy no. 354301/11/14/3100000613 w.e.f. 13.03.15 to 12.03.2016. He alleged that during the currency of policy his premises and contents therein suffered a loss of Rs. 19.37 Lacs due to entry of rain water into the building but the claim was rejected by the Insurance Company on the ground that loss due to direct entry of rain water was not covered under the policy.

The Insurance Company vide its Grievance Management Services had informed to the complainant that the loss due to direct entry of rain water was not covered under the policy. The root cause of entry of water was foreseen in nature. Furthermore the operating peril is due to “Direct entry of rain water” which is not covered in the policy. Apart from this, the property of the complainant remained unoccupied for more than 60 days and as per policy condition no. 3 (b) if the building becomes unoccupied and so remains for a period of more than 30 days, the insurance ceases to attach as regards the property affected. Hence Insurance Company had rejected the claim and communicated to the complainant accordingly.

I heard both the sides, the complainant as well as the Insurance Company. During the course of personal hearing the complainant stated that rain water entered the building through gaps/holes left by earlier tenants (HDFC Bank) after removal of ACs outlets etc.

The Insurance Company reiterated that loss to building and contents occurred due to direct entry of rain water which was not covered under the policy terms and conditions. On perusal of papers placed on record, I find that the damage to building and contents attributed due to direct entry of rain water through holes/ gaps which were due to removal of ACs/Outlets by the earlier tenant. As per clause no.VI of the standard fire and special perils policy covers “the loss, destruction or damage directly caused by storm, cyclone, typhoon, tempest, hurricane, tornado, flood or inundation.” In the instant case operating peril was direct entry of rain water which was not covered under policy terms and conditions as stated above. Therefore I uphold the decision of the Insurance Company. Accordingly the complaint filed by the complainant is hereby disposed off.