Case Study 49 - New India told to pay consumer Rs 75,000 for loss of the CNG kit

The New India Assurance Company Ltd (NIACL) has been directed by a consumer forum in Delhi to pay a policy holder Rs 75,000 for rejecting his claim for loss of the CNG kit installed in his car after charging him Rs 2,544 as premium to insure it.

The Delhi District Consumer Disputes Redressal Forum has directed NIACL to pay Rs 55,000 as cost of the CNG kit, Rs 15,000 as compensation for “harassment” and Rs 5,000 as cost of litigation, to the claimant Mr Sumit Kumar, saying the company caused “deficiency in service”.

“The premium of Rs 2,544 was charged by the insurance company to insure CNG kit and Rs 10,949 for the value of the vehicle.

“After receipt of the separate premium for CNG kit and issuance of the policy, the company cannot deny the payment for the loss of CNG kit. By doing so, it has caused deficiency in service,” the bench presided over by Mr B. B. Chaudhary said.

Mr Kumar, in his plea, had said that both his Santro car and the CNG kit fitted on it, was insured with the NIACL for the period June 2008 to June 2009, adding that after his car was stolen in June 2008, NIACL only paid the insured amount of the car and rejected his claim for loss of the kit.

The company contended that since the car’s certificate of registration did not mention it was fitted with a CNG kit, claim of its loss was not payable.

The forum brushed aside the contention of NIACL, pointing out “the insurance company could not have denied the indemnity for loss of the CNG kit as it had insured the CNG kit and received premium from him.“

The court observed that the NIACL’s investigator had verified that the CNG kit was installed in the car and had said that according to the policy, the kit was insured for Rs 55,100.