Hyderabad: Insurance firm fined Rs 79 lakh for deficiency in service
Hyderabad: The Hyderabad District Consumer Forum-1 has directed an insurance company to compensate a policyholder by paying over Rs 79 lakh for deficiency in services and indulging unfair trade practice. The consumer forum directed the company to make the payment within 45 days from the date of receipt of the order. Hitesh Kumar Kedia, owner […]
Hyderabad: The Hyderabad District Consumer Forum-1 has directed an insurance company to compensate a policyholder by paying over Rs 79 lakh for deficiency in services and indulging unfair trade practice.
The consumer forum directed the company to make the payment within 45 days from the date of receipt of the order. Hitesh Kumar Kedia, owner of Binjusaria Ispat Pvt Ltd, of Chandulal Baradari, Hyderabad, had filed a case against New India Assurance Company from which he had purchased a standard fire and special peril policy on 25 Feb 2018.
Subsequently, the complainant took add-on coverage to the said policy by making the required payment which included ‘Spontaneous Combustion’ for his sponge iron stock of Rs 20 crore. It is stated that due to spontaneous combustion (an outbreak of fire without application of heat from an external source), on 5 October 2018, the sponge iron stock worth Rs 79,70,000 was damaged. The company had rejected its claim on the grounds that the loss or damage was not caused by ‘Spontaneous Combustion by Fire.’
Holding the insurance company guilty of deficiency in services, the forum ordered the insurance company to pay Rs 79,70,000 to the complainant, along with interest at the rate of 9% per annum from the date of repudiation of his claim till payment. The complainant was also awarded Rs 3 lakh towards compensation for harassment and agony caused, along with Rs 20,000 towards litigation expenses.
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