SINGBHUM: A routine motor insurance claim in eastern India turned into a prolonged dispute over liability, paperwork, and consumer rights—ending with a district commission holding an insurer responsible for wrongful denial and ordering compensation.
When a Claim Became a Contest
In late March 2024, Pramod Kumar Lohani, a resident of Jhikpani Station Colony in Odisha, reported a road accident involving his car in Kyojhar district’s Ramchandrapur area. The vehicle, insured under a comprehensive motor policy issued by Universal Sompo General Insurance Company, had suffered damage when its axle suddenly broke. No one was injured, but the car was rendered inoperable and sent for repairs to a local workshop.
Lohani informed the insurer immediately and submitted all required documents. The company acknowledged the claim and even issued a claim number—typically a sign that the preliminary requirements have been met. What followed, however, was months of uncertainty. The insurer subsequently rejected the claim, citing the absence of documents such as a first information report (FIR), the driver’s license, and a “no-liability certificate” from another insurance company with which the vehicle had also been insured.
For Lohani, the rejection was more than a procedural setback. With no reimbursement forthcoming, his vehicle remained parked at the workshop for an extended period, incurring daily parking charges of ₹250. The costs mounted as the repair estimate—₹1,35,282—remained unpaid
Two Policies, One Accident
At the heart of the dispute lay an overlapping insurance arrangement. Lohani’s primary policy with Universal Sompo was valid from May 19, 2023, to May 18, 2024. To ensure continuity of coverage, he had also purchased a second policy from Cholamandalam MS General Insurance Company, effective from January 12, 2024, to January 11, 2025.
The accident occurred on March 29, 2024—squarely within the validity period of both policies. Universal Sompo argued that the existence of another active policy required Lohani to obtain a no-liability certificate from the second insurer before his claim could be processed. The consumer, for his part, maintained that the accident fell within Universal Sompo’s policy period and that the company had no grounds to shift responsibility after acknowledging the claim.
The district consumer dispute redressal commission in West Singhbhum examined this overlap closely. After reviewing the evidence and hearing arguments from both sides, the commission concluded that the primary liability rested with Universal Sompo, as the accident occurred during its policy period. The demand for additional certificates, it held, could not justify outright rejection of the claim once the insurer had accepted the documentation and issued a claim number.
The Cost of Delay
The financial consequences of the dispute extended beyond the repair bill. Lohani told the commission that the prolonged denial forced him to bear ancillary expenses, including workshop parking fees, and caused significant inconvenience. Arguing that the insurer’s actions amounted to a deficiency in service, he sought compensation of ₹2,55,282—covering repair costs, incidental expenses, and damages for mental distress.
Consumer advocates say such cases highlight a recurring problem in motor insurance disputes: claims are often delayed or denied on technical grounds, leaving policyholders to shoulder costs while liability is contested. The commission appeared to agree that the delay itself had caused harm, noting that the vehicle remained unusable for an extended period solely because the claim was not settled in time.
A Commission’s Order and Its Implications
In its ruling, the West Singhbhum district commission held Universal Sompo General Insurance Company liable for deficiency in service and ordered it to pay Lohani ₹1.10 lakh as compensation. The amount was to be paid within 45 days, failing which the insurer would be liable to pay interest at an annual rate of 9 percent.
The order stopped short of awarding the full amount sought by the complainant but underscored a broader principle: insurers cannot repudiate claims after acknowledging them without clear and justifiable reasons. For policyholders, the decision serves as a reminder that consumer forums remain a recourse when disputes over insurance claims become protracted.
