Insurance claims not time-bound: Panel

The Maharashtra State Consumer Disputes Redressal Commission recently held that filing an insurance claim late cannot be the reason for rejecting it.

The commission, while upholding a district forum’s order, directed The Oriental Insurance Company Ltd to pay the widow of a man who died in a 2006 accident the entire claim of Rs 1 lakh plus a compensation of Rs 46,000 even though the claim had been filed well past the one-month ‘deadline’. The commission held that the deadline was not a “mandatory condition”, but a kind of directive.

Referring to past orders, the commission observed, “This commission has constantly held that giving intimation within specified period or within one month is not a ‘mandatory condition’, but it is a ‘directory’ in nature and breach of this condition does not empower appellant insurance company to forfeit or foreclose the insurance claim required to be duly settled….”

Shri Vitthal Sahakari Sakhar Kharkhana Ltd had subscribed to a Group Janata Personal Accident Insurance Policy to provide insurance cover to members in their factory. During the term of the policy, one of the members, Vitthal Gawande, died in a road accident on December 31, 2006.

The insurance claim was filed on January 18, 2008. The insurance company repudiated the insurance claim on the grounds of non-compliance of terms and conditions incorporated in the policy document. Aggrieved with the repudiation, in 2009, Vitthal Sahakari Sakhar Kharkhana alongwith Gavande’s wife Rani Gavande filed a consumer complaint before the district forum in Solapur.

On December 7, 2010 the district passed an order in their favour. Aggrieved, the insurance company filed an appeal in the state commission.

According to the commission, the only point challenged by the insurance company was that the terms and conditions of the policy was violated by the complainants as intimation of the claim was not received within a stipulated period but after almost 13 months.

The advocate, on behalf of the insurance company, submitted that as per the terms and conditions a claim under the Group Janata Personal Accident Insurance Policy was required to be brought to the notice of the insurance company within one month of the date of the incident leading to the claim.

The commission observed that during the arguments, the insurance company did not point out the penal provisions for non-compliance of the policy condition. The commission then dismissed the appeal.

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