New Delhi: Insurance companies that reassess the market value of a car after theft or damage due to accident, can no longer do so. State consumer commission in a recent order stated that cost of the vehicle assessed at the time of issuing the insurance policy and charged the corresponding premium stands even after theft or damage.
Justice J D Kapoor added, "Insurance contract, once concluded, cannot be re-opened again. At the most insurance companies can deduct the depreciated value of the vehicle at 5% or 10%."
These observations were made in a case where a second-hand Toyota Qualis was purchased by complainant Mahjabi from Sunita Devi at a cost of Rs 5.2 lakh. Mahjabi then arranged for an insurance cover with Oriental Insurance Company effective for a year from 2002-2003 fixed at Rs 4.8 lakh. On 16 November, 2002, the vehicle met with an accident, but the insurance firm rejected the claim on the ground that the original owner did not give any authority to the purchaser.
Source: Deeksha Chopra
The Times of India
Tuesday, July 15, 2008
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