Insurance Caselaws

An insurance company should not request the following documents from the insured in the course of resolving claims: Supreme Court.

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Case Title: Gurmel Singh vs Branch Manager, National Insurance Co. Ltd. | 2022 LiveLaw (SC) 506 | CA 4071 OF 2022 | 20 May 2022.

Summary

The Supreme Court has emphasized the importance of insurance companies avoiding excessive technicality and requesting documents that the insured cannot provide due to unforeseen circumstances. In a case involving a theft insurance claim, the insured filed a complaint with the District Consumer Disputes Redressal Commission, which was resolved by providing the insurance company with a duplicate certified copy of the truck's certificate of registration within one month. However, the RTO declined to provide the document, citing a cybersecurity breach.

The claim remained unresolved, leading to a new consumer complaint. The District Commission dismissed the complaint, but the Supreme Court ruled that the claim could not be considered a deficiency in service. The court also noted that the insurance company settled the claim in an arbitrary and overly technical manner, denying the claim on technical and/or specious grounds. The court awarded the appellant Rs. 12 lakhs in insurance, interest at a 7% rate, and ordered the insurance company to reimburse the appellant for litigation expenses amounting to Rs. 25,000.

About the case

The Supreme Court noted that in the process of resolving claims, an insurance company should avoid excessive technicality and refrain from requesting documents that the insured is unable to provide due to unforeseen circumstances. In numerous instances, the bench of Justices MR Shah and BV Nagarathna observed that insurance companies deny claims on technical and/or dubious grounds. In this instance, when the insurance company failed to settle a theft insurance claim, the insured filed a complaint with the District Consumer Disputes Redressal Commission.