14 June 2024 Consumer Protection Act >> Consumer Rights   |   Insurance Claim/Money Rejected >> Insurance  

A recent fire insurance claim dispute highlights the importance of clear evidence for both policyholders and insurers. M/s. Ujala Plastic & Case Company (the policyholder) faced a partial rejection of their claim after a fire ripped through their premises.

The crux of the dispute arose from the surveyor's report, commissioned by the insurance company (OPs) to assess the damages. The report flagged inconsistencies in the policyholder's financial records, particularly a large purchase made just before the fire. Additionally, the debris at the site didn't seem to match the extent of claimed stock loss, raising doubts about the claim's validity.

The policyholder contested the surveyor's findings, providing explanations for the purchase and arguing that the plastic nature of their stock would have resulted in complete combustion, leaving minimal debris.

The State Commission acknowledged the significance of the surveyor's report but also recognized the court's authority to intervene in cases of arbitrary rejections by insurers. While the burden of proof rested on the policyholder to demonstrate the extent of their loss, the commission considered their explanations alongside the surveyor's report.

This resulted in a partial award, granting the policyholder a sum with interest, though lower than their initial claim.

The case demonstrates the intricate interplay between policyholder responsibility and insurer scrutiny. While discrepancies can raise red flags, policyholders who can provide credible explanations have a stronger chance of securing a fair settlement.