The National Consumer Disputes Redressal Commission (NCDRC) on February 15 upheld an order passed by the Haryana State Commission and dismissed a plea filed by National Insurance Co. Ltd justifying the repudiation of a claim for insurance cover on a stolen vehicle.
The national forum held that the insurance company “was expected to make a clear stipulation in the insurance contract”.
Previously, the Rohtak district forum had directed the insurance firm to pay the complainant over ₹6 lakh as cover for a vehicle which was stolen within a year being insured.
ADVERTISEMENT
Vehicle not registered
The insurance firm had contended that the claim was repudiated as the vehicle had not been registered within the stipulated period of time, which was in violation of the Motor Vehicles Act.
“It was pleaded that non-registration of a motor vehicle with the transport authority is a violation of [relevant sections] of the Motor Vehicles Act, 1988, as well as the terms and conditions of the insurance policy. Had the vehicle been registered, it would have been easy for the police to trace the same. On the aforesaid allegations, the opposite party justified the repudiation of the insurance claim,” observed the NCDRC.
ADVERTISEMENT
However, the commission held that the repudiation of the claim based on “the commission of offence” under relevant sections of the Motor Vehicles Act “prior to the theft” was not justified.
“The company, instead of providing the insurance cover for one month, issued the policy for one year and charged premium without making it clear to the insured that in case the person failed to get the vehicle registered within a month from the date of purchase, the cover would stand withdrawn,” the NCDRC said.