Forum slaps Rs 24 lakh fine on insurance firm

Refusal to honour a claim has cost an insurance company dear, with the Maharashtra State Consumer forum slapping a hefty fine of Rs 24.3 lakh over and above the claim of Rs 29 lakh on the company.

United India Insurance Company had turned down a claim filed by Dhanera Diamond, an Opera House-based diamond group whose two 254.15 carat diamonds had gone missing in transit while being shifted from one broker to another.

According to the complainant, on November 5, 2003, the diamonds were handed over to broker Chandrakant Shah, who passed them to another brokerage firm, London Star Diamond Company (India), to show to prospective buyers. The diamonds reportedly went missing in transit. A theft complaint was registered with the D B Marg police station. While the complainant named a few persons in the FIR, the case has not been solved till date.

The complainant, who has been availing a ‘Jewellers Block Insurance Policy’ with the insurance company since 1999, had reported the theft and availed of an insurance on diamonds worth Rs 29 lakh.

However, the insurance company turned down the insurance claim stating clauses mentioned in the policy.

United India Insurance claimed that “the policy could be repudiated if the applicant had handed over the insured good to a third party who acted as an agent or a broker”, an alibi that was turned down by the commission.

In its order, the commission chaired by S R Khanzode and Dhanraj Khamatkar, member had observed that this was clearly covered under the definition of deficiency in service as defined under the Consumer Protection Act, 1986.

An additional Rs 25,000 was imposed on the insurance company, as cost to the complainant.

http://www.indianexpress.com/news/forum-slaps-rs-24-lakh-fine-on-insurance-firm/1065618/