Man wins Rs 2.5 lakh payout from Oriental Insurance after losing car in 2023 floods

The Shimla district consumer commission has directed Oriental Insurance Company to compensate a vehicle owner whose car was swept away in the July 2023 floods, and directed it to pay the claim amount of Rs 2.11 lakh.

A bench of president Baldev Singh and member Nidhi Sharma also awarded Rs 25,000 as compensation for mental harassment and agony and a sum of Rs 15,000 as litigation charges. “…as per the terms and conditions of the policy, the opposite party (insurer) was under obligation to indemnify the loss, but the opposite party has failed to do so before and after filing of the present complaint,” the October 31 order said.

The commission noted that the insurer was liable to compensate the complainant for the loss, harassment as well as litigation expenses, as it had failed to pay the settlement amount agreed upon. This amounted to deficiency in service and an unfair trade practice.

‘No breach of policy conditions’

The order noted that the car was insured at the time of the incident and there was no violation of policy terms and condition. The insurer claimed that it could not complete the settlement because the complainant had failed to submit a cancelled registration certificate after agreeing to accept Rs 1.85 lakh. However, the commission observed that by filing a complaint, the complainant had clearly indicated dissatisfaction with the settlement amount.

Regarding the surveyor’s assessment, the order remarked, “It is not that sacrosanct that it cannot be departed from. It is not conclusive.”

Vehicle washed away in flood: Order

The man filed a complaint against the Oriental Insurance Company before the consumer commission. The complainant was the registered owner of a car insured with the company from July 26, 2022, to July 25, 2023, for an Insured Declared Value (IDV) of Rs 2.12 lakh.

On the night of July 19, 2023, the complainant’s driver parked the vehicle on the Hatu Mata Road side. Heavy rainfall triggered a flood that washed the car away. A police report was lodged, and the vehicle remained completely untraceable. Despite notifying the insurance company, completing the required formalities, and issuing a legal notice, he claimed that his claim went unsettled.

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Then he filed a complaint alleging deficiency in service and unfair trade practice, seeking the full IDV of Rs 2.12 lakh and compensation for mental harassment.

Owner failed to submit RC: Insurer

The insurance company contested the complaint, arguing that its surveyor had assessed the loss at Rs 1.85 lakh after the residual value of the car was deducted from the total claim payout.

According to the insurer, the complainant had consented to this amount via an affidavit and agreed to submit a cancelled registration certificate, but he failed to provide the document and instead initiated legal proceedings.

Takeaway

The judgment protects the complainant during natural disasters by establishing that insurers cannot deduct wreck value when a flood-swept car remains untraceable.

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Consumers facing similar grievances may contact the consumer helpline in their respective states (Himachal Pradesh: 1800-180-8087) or dial the National Consumer Helpline at 1915 for assistance.

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