State Commission Holds LIC Liable For Deficiency In Service Over Wrongful Repudiation Of Insurance Claim.

In a very recent judgment the Telangana State Commission, held Life Insurance Corporation liable for deficiency in service for wrongful repudiation of a legitimate insurance claim. In this case, the complainant is a police constable who has taken four Life Insurance policies and regularly pays his premiums. However, after some time an accident occurred with the complainant when he was traveling by Golkonda Express and his left leg was amputated. The complainant seek for the insurance claim but the insurer rejected the claim because according to the insurer there was no permanent disability. Feeling aggrieved by this the complainant, who had no other source of income, filed a complaint before the District Commission, which admitted the complaint and directed the insurer to pay the claim amount of Rs.7,50,000 with interest @ 9%, Rs. 25,000 as compensation and Rs. 5,000 as litigation costs. Dissatisfied with the decision of the district commission, the insurer appealed before the State Commission of Telangana. The insurer contended that the complainant failed to establish that he lost his job with the Andhra Pradesh government due to the amputation of his left leg. It was further contended that the complainant also failed to disclose whether he had taken loans on the policies before the accident. Based on these points, the insurer sought dismissal of the complaint, denying any service deficiency or negligence. The Commission noted that the insurer denied the claim on the grounds that the complainant was not entitled to disability benefits. However, the policy did not have a clause to back this. The insurer denied the disability benefits, citing that the amputation of one foot by the complainant did not qualify. The policy schedules had no clauses to support the disability benefits, and there was no evidence presented to warrant repudiation. The Commission commented against the negligence of the insurer with deficient service and inability to show policy documents. The court held that the claim denial had no justification and became harassment in nature. There is nothing in the appeal. Accordingly, the order passed by the District Commission stands confirmed. Published by **Voxya** as an initiative to help consumers in resolving consumer complaints.