According to a media report, the Delhi State Commission has asked an insurance company to pay the car owner the total insured value minus 5% depreciation, after it was found that the insurance company had gone against the recommendation of the authorised workshop to replace the chassis and body of a totaled SUV and instead asked them to repair the vehicle.
A Ford Endeavour, purchased from an authorised dealer in Delhi met with an accident on December 8, 2006. The SUV was insured with ICICI Lombard General Insurance (IDV = 13.57 lakh). A repair estimate of Rs. 14 lakh was given which included replacement of chassis and body.
However, on the words of the insurer, repairs were carried out instead of replacement. The owner found that the brakes were not working after the repair was done. Further, the workshop had refused to give any road-worthiness assurance to the owner.
The car owner hence filed a complaint with the Delhi State Commission asking the chassis and body replacement as per the original recommendation, else settle the claim on total loss basis.
The State Commission didn’t accept the defence of the insurer and asked them to pay 95% of IDV along with Rs. 10,000 towards litigation expense for deficiency in service and an unfair trade practice. At the appeal of the National Commission, the Bench passed the State commission’s order.
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