It has been very costly for the country’s largest insurance company to reject the claim of one person. The Consumer Commission has ordered the insurance company to pay all the expenses along with the claim amount.
The District Consumer Commission has ordered the country’s largest insurance company Life Insurance Corporation of India – LIC to pay a compensation of Rs 80 lakh to the son of a person killed in a car accident. LIC had initially rejected the claim of giving insurance claim. LIC’s argument was that the victim had not disclosed that he had more than one insurance policy.
This matter is from Hyderabad. The District Consumer Disputes Redressal Commission-III of Hyderabad has given this decision against LIC while considering the petition of 21 year old Surya Snehit.
The District Consumer Disputes Redressal Commission-III, Hyderabad was considering the complaint of Surya Snehit (21). The opposite party (OP) was the Regional Manager, South Central Zone Office, LIC, the Manager of Nizamabad Branch of LIC and the Divisional Manager of Secunderabad Division Office of LIC.
According to the information, the complainant Surya Snehit’s father K. Prabhakar Rao died in a road accident. His body was found in the canal of Thoguta, Telangana. The complainant told that his father had taken an insurance plan of Rs 80 lakh, LIC Amar Policy, from the Life Insurance Corporation of India. The victim had other policies also. Surya’s sister was made the nominee in another policy, which was settled. But LIC rejected the claim of Amar policy made by Surya. The reasoning behind this was that the victim did not disclose that he also had SBI policies.
It was also argued that the policy did not last for a period of three years. LIC said that during the investigation of the policy taken in 2019, it was found that the victim had said that no other policy was purchased in his name. The insurance company alleged that the victim hid the facts due to which it had to reject the claim.
After studying all the evidence and arguments, the Commission said that the LIC policy was taken by the victim before purchasing the SBI policy. The complainant did not mention this as it does not affect Section 45 of the Insurance Laws (Amendment) Act. Describing the process of rejecting the claim by the insurance company as deficient, the Commission ordered that the complainant be entitled to receive the sum assured of Rs 80 lakh and other benefits along with 9 per cent annual interest. Therefore, along with the claim amount of Rs 80 lakh, the insurance company should also pay compensation of Rs 25,000 to the complainant and Rs 5,000 spent on legal action.
