Full insurance claim need not be honoured: Forum

CHENNAI: An individual cannot receive the full amount mentioned in his insurance claim without “a proper and justified assessment of the extent of loss” of insured goods. This holds good even if the amount claimed is lower than the insured value of goods, the National Consumer Disputes’ Redressal Commission (NCDRC), New Delhi has said. Presiding member Suresh Chandra made note of this while dismissing a petition by G K Kannan of Theni district.
In his complaint, Kannan said he ran a poultry farm with 15 sheds which was insured with United India Insurance Company Limited for Rs 19,12,500 from December 2003 to December 2004. A fire in July 2004 destroyed the sheds, the animals and some of the apparatus as well. While Kannan lodged a claim for Rs 26.5 lakh, the insurance firm deemed this excessive and agreed to pay Rs 4.16 lakh after a surveyor from the company inspected the damage.
Disagreeing with this estimate, Kannan approached the District Consumer Forum in Dindigul seeking Rs 17.7 lakh for the losses and Rs 1 lakh for mental agony. Representatives of the insurance firm maintained that his policy covered the sheds and surrounding infrastructure but not the animals. As a result, the district forum ordered that Kannan be paid Rs 5.87 lakh.
He then moved the State Consumer Disputes’ Redressal Commission which dismissed his plea, noting that the insurance company had honoured the claim as per the terms and conditions of the policy and did not repudiate it altogether. In his review petition filed with the NCDRC, Kannan’s main contention was that since the total insured value under the policy was Rs 19,12,500, his claim for Rs 17.7 lakh was “well within the insured amount” and should be honoured.
However, Suresh Chandra of the NCDRC, who passed the order, said that merely because the insured value was of a higher amount, it did not mean that the policy holder would be entitled to get the full amount claimed without a proper assessment of the extent of loss to the insured property.