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ICICI Lombard Expert Blog
 

Insurers Can’t Reject Genuine Claims, says Supreme Court

October 09 2017
Insurance

Insurance companies can no longer reject claims solely on the basis of delayed filing, says a new ruling from the Supreme Court of India. This is good news for policyholders. Particularly those who have car insurance, as they now no longer need to fear repudiation of claim, if there has been a delay in submission of claim documents due to unavoidable circumstances.

The ruling came from the bench of the Supreme Court comprising of Justice R.K. Agrawal and Justice S. Abdul Nazeer, who were presiding over a long-running case between a general insurance company and its customer. The court ruled that “If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the investigator.”

The bench also observed that rejection of claims on purely technical grounds will erode customer confidence in the insurance industry. Keeping aside the verdicts of the various consumer courts the case had gone through previously, the Supreme Court asserted that the ‘Consumer Protection Act’ focuses on providing better protection of the interest of consumers, and that it is a beneficial legislation deserving liberal construction. The Apex Court stressed that this laudable object should not be forgotten while considering claims made under the Act.

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