Consumer forum tells insurance firm to pay ‘insured declared value’ of car

HYDERABAD: A six-year-long trial calculated in win for a consumer against an insurance company which was directed by the Hyderabad District Consumer Forum-II to pay `7.25 lakh in compensation to a car owner.

The complaint, in a peculiar way, made by Srinivasa Babu against ICICI Lombard General Insurance, brought to light by a consumer’s claim which exceeds Insured Declared Value (IDV).

The businessman, a native of Andhra Pradesh, was coming to Hyderabad when he met with an accident in Mahbubnagar on March 4, 2009. Srinivasa Babu, his wife and friend sustained bleeding injuries and his car, a Chevrolet Spark, was severely damaged in the accident.

When Babu approached the service centre in Hyderabad for repairs, an estimate for rebuilding of the car was given quoting charges of `4.3 lakh which surpassed the vehicle’s insurance amount of `3.2 lakh.

Aggrieved Babu took up the issue of full coverage of the cost of repairs with the insurance company several times. But even after eight months and lodging of four complaints and incurring demurrage (charges for parking the car in workshop awaiting repairs), the insurance company did not relent.

However, after a year, the company inspected the vehicle at the service centre and estimated the repair costs at `2.10 lakh. It asked the customer to keep the car cut open and initiate further repairs by raising the same issue with the repairer. Taking cognisance of the case, the forum observed that the insurance company, in order to avoid the claim, had intentionally dragged its feet amounting to deficiency of service.
It took a serious view of ICICI Lombard General Insurance ‘unreasonably’ closing and ‘simply’ dragging the issue.

It directed the insurance company to pay IDV of `3.2 lakh along with interest at 18 per cent calculated from the day of the complaint. In addition, a compensation of `50,000 for the mental agony caused and `10,000 towards court charges are also to be paid by the company.