Whenever you purchase an insurance policy, make sure you don’t misrepresent the facts as it could really jeopardize your claim and cause you immense financial loss. A recent consumer court ruling upholding the repudiation of an auto insurance claim really makes this point clear.
The focal point of this case was the dismissal of a claim made by Vinod Kumar, a resident of Mysore, following an accident involving his vehicle – a Volkswagen Jetta, on September 16, 2014. Purchased in 2012, the vehicle was insured with Bajaj Allianz. General Insurance Company from January 8, 2014 to January 8, 2015. Kumar had paid ??30,003 towards the premium
In response to Kumar’s complaint to the consumer court, the insurance company argued that the policy was flawed because the policyholder provided false information when purchasing the policy.
The insurer’s case was that the policy owner claimed the car was insured the previous year with Reliance General Insurance and was entitled to a 20 percent discount as a “No Claim Bonus” (PNE). However, the check issued by the consumer to Reliance General Insurance the previous year had been refused and the insurer had therefore not issued the policy at all. Thus, he did not have an automobile insurance policy the previous year and was not entitled to the NCB. Thus, because of false statements and the suppression of material facts, the policy was flawed and the insurer was not required to compensate the loss.
The National Consumer Disputes Appeals Board agreed with the lower consumer courts that the insurer was justified in not honoring the claim. Quoting the Supreme Court in Life Insurance Corporation of India Vs. Smt. Asha Goel and Reliance Life Insurance Co Vs. Rekhaben Nareshbhai Rathod, the Commission said there was no illegality in maintaining the repudiation of the claim. (Vinod Kumar Vs Manager, Bajaj Allianz General Insurance Company, RP No 2277 of 2019, decided on August 4, 2021)
So the consumer not only lost the huge premium he paid for the insurance, but also the insurance money to repair the car. On the other hand, if he had told the truth, he might not have gotten the 20% premium discount, but his policy would be intact and the insurer would have had no reason to reject it. his claim.
Consumers may not be aware that if an auto insurance policy lapses for even one day, the vehicle must be inspected by the insurer before issuing a policy. And even if the policyholder has not made any claims before, if a comprehensive policy is allowed to expire for more than 90 days, the accrued benefit of the âNo Claim Bonusâ is lost. In other words, if you have a good PNE under your belt, it is important to make sure that there is no break in your vehicle insurance.
So always pay your premium on time, preferably via an electronic payment method, and make sure the policy is issued immediately. Under the Motor Vehicle Act, you cannot drive your vehicle on public roads without liability insurance. And remember, the insurance contract is a contract of the highest good faith and both parties to the contract must ensure that there is no misinformation or non-disclosure of material facts.
Usually, when you change insurer during a renewal or when you take out a new policy on a new car, to benefit from the NCB reduction, you must produce a certificate from your old insurer. In fact, if you look at the insurance regulator’s webpage for policyholders, it says that the proof can be the renewal notice from the current insurer or your original expiring policy as well as an attestation. from your previous insurer, indicating that you have filed no claims on the expiration policy. Obviously, in this case, the insurer did not show due diligence and demanded this proof from the consumer! And in addition, earned a hefty premium, without having to fulfill his part of the insurance contract.