Panel directs insurance firm to pay Rs 7L for fire damage

Mumbai: A district consumer commission, in an order, has directed the National Insurance Company Limited to give a person Rs7.04 lakh with 8% interest per annum towards a fire insurance claim. The company had paid only Rs26,485 that the commission found had no basis. The commission also directed the insurance firm to pay Rs 70,000 towards mental agony and litigation costs. The order dated October 29 (December 22) was passed by Sneha Mhatre, President and DS Paradkar, member of South Mumbai District Consumer Disputes Redressal Commission on a complaint by Madhavlal Pitti (represented by legal heir Vivek Pitti) against National Insurance Company Limited.
Mr Pitti had taken a fire insurance policy by the name ‘Standard Fire and Special Peril Policy’ of Rs50 lakh for a period between May 14, 2014, to May 13, 2015, for which he paid a premium of Rs7,949.
On April 27, 2014, the server room on the mezzanine floor of the building that was insured caught fire. The building was given on leave and license basis to ‘The Akola Janata Commercial Co-Operation Bank Ltd’ for the period June 2013 to May 2017. In the fire, the bank’s machinery, electronic cables, and wires were burnt entirely. When the fire occurred, Mr Pitti instantly informed the fire brigade and the police. A panchnama was done, photos were taken. The insurance company asked him for the details of damage. Mr Pitti had appointed M/s SG Bapaye and Associations to ascertain the loss. The surveyor informed that the total loss was Rs9.39 lakh. The Insurance company also appointed its own surveyor. The Insurance firm cleared the insurance claim of only Rs26,845 based on the report of their surveyor.

When Mr Pitti filed a complaint, the Insurance firm countered it by saying that it should be rejected because it is a civil dispute, that claim was for business and not mere consumer issue, the assessment was based on a clause of the policy, property let out on rent was hidden and an exorbitant claim was made.
During the hearing, the commission noted that while taking the policy, the development officer of the insurance firm had seen the building.
Mr Pitti stated that in 20 years that they had been taking the policy, they never sought a claim before this. During the time of panchnama, a loss of Rs14-15 lakh was recorded through signature of branch manager and the senior inspector of police.
The Commission said that despite the complainant having given all proof, the claim was not given. It further stated that there is nothing on record to state that he is not eligible for the claim. If further sought to know why did the development officer not say that it was under insured when he inspected the building? Stating that as none of these could be answered by the insurance firm, which is a deficiency in service it directed the compensation to be paid in 30 days of the order.