Case Study 27 Delayed intimation of death of an insurance policyholder can't be reason to deny claim

Delayed intimation of death of an insurance policy holder cannot be reason to deny compensation, the city consumer redressal forum has ruled. Four years after Vijaya Dhumal, a farmer, died in an accident, the Mumbai suburban district consumer disputes redressal forum has directed an insurance compa ny to settle the claim made by her relatives. Vijaya was covered under the state government’s insurance policy for farmers.
The forum directed Reliance General Insurance Co Ltd to pay Dhumal’s son Prakash and her husband — both Raigad residents — Rs 50,000 each towards the settlement of the claim that the company had rejected citing late intimation. Prakash was also paid Rs 10,000 towards compensation and cost of complaint.
Dhumal was covered under the scheme ‘Shetkari Vyaktigat Appaghat Vima Yojana’ — a farmers’ personal accidental insurance policy taken out by the state government in collaboration with National Insurance Company and Reliance General Insurance Company.
Dhumal’s policy taken from Reliance fell under the Konkan and Pune area’s revenue department for farmers in the age group 14-75 years. The policy was in force from 2005 to 2007 in which the person was insured for Rs 1 lakh towards accidental death.
Prakash said his mother died in an accident while travelling in a tempo on her way back from a family function on November 18, 2006. Dhumal then filed the insurance claim documents and sent it to the concerned the village revenue officer — as per policy rules.
Prakash said he was not aware when the documents reached the insurance company. But, on March 31, 2008, he received a letter by the company that the claim was repudiated for late intimation.
Before the forum , the company did not deny Prakash’s version. However, through his lawyer, Prakash stated there was no time limit on the policy under which his mother was insured.
The forum on the basis of the state consumer commission’s judgment observed that Reliance General Insurance Company’s refusal to settle the claim on the basis of late intimation had lead to deficiency in service by the insurance company.
The forum thereby directed the company to settle the claim by paying the insured amount to Prakash and his father along with other compensation.