Consumer Commission Awards ₹1.24 Crore in Fire Insurance Dispute. Under-Assessment of Losses Leads to Consumer Victory. The State Consumer Disputes Redressal Commission upheld findings of deficiency in service against an insurance company and directed payment exceeding ₹1.23 crore in a major fire insurance dispute.
Background
A manufacturing unit suffered a devastating fire causing substantial damage to stock and assets.
The company submitted an insurance claim exceeding ₹2.28 crore.
After assessment, the insurer’s surveyor calculated the admissible loss at approximately ₹32 lakh, which was paid to the insured.
Dispute Over Settlement
The insured accepted the payment under protest and subsequently approached the consumer commission alleging that the claim had been grossly undervalued.
The company argued that extraordinary circumstances following the fire made immediate preparation of a complete inventory difficult.
Insurance Company’s Defence
The insurer contended that the surveyor’s report was accurate and argued that the dispute had already been settled through a discharge voucher executed by the insured.
Commission’s Findings
The commission rejected the insurer’s contentions and held that acceptance of payment under protest does not amount to full and final settlement.
It found that the insurer had significantly under-assessed the loss and was therefore deficient in service.
Relief Granted
The commission recalculated the payable amount and directed payment of approximately ₹1.24 crore along with 9% annual interest.
Key Legal Takeaway
Acceptance of an insurance payment under protest does not necessarily extinguish a policyholder’s right to challenge an inadequate settlement before a consumer forum.
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