06 June 2024 Insurance Claim/Money Rejected >> Insurance  

A recent court case highlights the importance of transparency when filing insurance claims. Buildmet Fibres Pvt. Ltd., an industrial company, faced a denial of their insurance claim after a fire incident. They had two separate policies with Oriental Insurance Co. Ltd. (Oriental) - one covering their factory at Doddabalapura (Policy No.484) and another for their Unit-II (Policy No.129).

The crux of the dispute arose from a fire at Unit-II on June 10, 2010. Buildmet submitted a claim under Policy No.129. However, Oriental denied the claim on several grounds, including:

• Non-disclosure of previous fire: Buildmet allegedly failed to disclose a fire incident that occurred at their Doddabalapura facility four days prior to obtaining Policy No.129.
• Unclear insurable interest: Oriental questioned whether Buildmet had ownership of the damaged machinery at Unit-II.
• Exaggerated claim amount: The insurer argued that the claim amount submitted by Buildmet was significantly higher than the value of the insured machinery.

Buildmet challenged the denial in the State Consumer Disputes Redressal Commission (State Commission). The State Commission partially allowed their claim, but Oriental appealed this decision.

The court ultimately sided with Oriental, citing the following:

• The surveyor's report, commissioned by Oriental, pointed towards an inflated claim amount and raised doubts about Buildmet's ownership of the machinery.
• The State Commission, according to the court, did not adequately consider the surveyor's findings.
• Invoices presented by Buildmet did not correspond with the location of the damaged machinery or the claimed value.