The Delhi State Consumer Commission has held that an insurance company is liable to pay the full value of a stolen vehicle to a policy holder and cannot reduce the amount on account of depreciation.
“In a case of theft of a vehicle which is insured, there is a total loss and the question of depreciation in the insured amount, which is the contractual value under the insurance agreement, would not arise,” the Commission bench comprising President B. A. Zaidi and Member M. L. Sahni said.
The SCDRC dismissed a plea by the Cholamandalam M. S. General Insurance Corporation Ltd challenging a District Consumer Forum’s order to pay Rs. 6.09 lakh claim money and a compensation of Rs. one lakh to complainant Mohd Ibrahim.
“The District Forum was right in not depreciating the contractual value of the insured vehicle while indemnifying the loss of Ibrahim,” it said.
Earlier, the company contended that Mr. Ibrahim concocted a story of theft of his Honda City car for obtaining the claim.
The car, which was insured in 2004, was stolen from a hospital here in the same year.
The insurance company had rejected the claim, saying that the hospital was liable to compensate the owner of the car as the theft had taken place at its parking site.