Court Settles Insurance Claim Dispute Partially in Favor of Policyholder.
21 June 2024
Insurance >> Personal Law
A recent court order addressed a dispute between a policyholder and an insurance company regarding a vehicle insurance claim denial.
The case involved a policyholder whose spouse passed away during the policy period. Due to delays in obtaining a No Objection Certificate (NOC) from the loan provider on the vehicle, the policy renewal was done in the deceased's name. The vehicle was subsequently involved in an accident, and the insurance company denied the claim citing the policy wasn't transferred within the stipulated timeframe after the death of the insured.
The lower court (District Forum) ruled in favor of the policyholder, directing the insurance company to pay the full insured declared value (IDV) of the vehicle. However, the State Commission modified this order, directing the company to pay 75% of the IDV on a "non-standard basis" due to minor breaches by both parties.
The policyholder then filed a revision petition against the State Commission's order, seeking the full claim amount. The court ultimately dismissed the revision petition and upheld the State Commission's decision.
The court's reasoning focused on the following points:
- The insurance company was aware of the policyholder's death when they renewed the policy.
- There were minor violations of the contract by both sides - the policy wasn't transferred on time, and it was renewed in the deceased's name.
- Considering these shared lapses, the State Commission's decision to award a partial claim was deemed fair and just.
In conclusion, this case highlights the importance of timely communication and adherence to policy terms for both policyholders and insurance companies. While the insurance company couldn't deny the entire claim entirely due to their own knowledge of the situation, the policyholder's mistakes also justified a partial deduction.