In a landmark ruling, the Madhya Pradesh State Consumer Disputes Redressal Commission has directed United India Insurance to pay ₹6.97 lakh to an Indore-based trader, rejecting the insurer’s claim denial on the grounds of late intimation. The court denounced the firm’s reliance on “technical excuses” and reaffirmed consumer protection principles.
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The Incident
In a scathing rebuke of predatory insurance practices, the Madhya Pradesh State Consumer Disputes Redressal Commission has ordered United India Insurance Company to pay ₹6.97 lakh with interest to an Indore-based trader after the firm denied a legitimate claim, citing a 48-hour intimation delay. The case highlights a common grievance in the insurance sector, claims being rejected on technical grounds, even when policyholders meet substantive requirements.
The complainant, operating under M/s Sitaram Narayan, had purchased a Marine Cargo Open Insurance Policy from United India Insurance covering goods worth ₹50 lakh from October 2009 to October 2010.
In August 2010, a tanker carrying refined soybean oil met with an accident while en route from Ashoknagar to Shajapur. The trader informed the insurer soon after, and a surveyor was appointed, who inspected the accident site and submitted a report.
But when the firm submitted a formal claim, the insurer rejected it, citing a violation of policy conditions, specifically, the failure to notify the company within 48 hours.
The Legal Dispute
Contesting the rejection, the trader filed a case with the State Consumer Commission, arguing that although the intimation was delayed slightly, the delay occurred because the accident took place over a weekend (Sunday), which limited access to officials and formal reporting mechanisms.
The surveyor had still conducted a site inspection, and the required declaration and documentation were ultimately submitted.
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The Verdict
Delivering the judgment, Commission President Dr. Shrikant Pandey and Member Monika Malik rejected the insurer’s argument, observing:
“Insurance companies cannot evade liability by clinging to procedural technicalities when the insured has suffered an actual, verified loss. The delay in intimation was neither deliberate nor excessive, and was caused by practical constraints.”
The commission held that the insurer’s conduct was unjust and ordered the payment of ₹6,97,000 with 6% annual interest from the date of claim rejection.
The judgment sends a strong signal to insurers: transparency, fairness, and customer-centric service are not optional. Experts say such verdicts reinforce trust in the consumer protection system and curb exploitative industry practices. Legal experts and consumer rights groups have welcomed the ruling, describing it as a milestone in the fight against institutionalised claim denial.
About the author – Prakriti Jha is a student at National Forensic Sciences University, Gandhinagar, currently pursuing B.Sc. LL.B (Hons.) with a keen interest in the intersection of law and data science. She is passionate about exploring how legal frameworks adapt to the evolving challenges of technology and justice.