Car theft claim rejected over keys left in ignition; Delhi man wins Rs 4.25 lakh from insurer

The commission ordered the insurer to pay the car's insured declared value of Rs 4 lakh, along with Rs 25,000 towards litigation costs, harassment, mental agony and loss of time. According to The Indian Express, the District Consumer Disputes Redressal Commission in Delhi passed the order on October 8. President Sonica Mehrotra and members Richa Jindal and Anil Kumar observed that the insurer could not reject a genuine claim merely on the ground of a technical breach of policy conditions.

The commission noted that although policyholders are required to take reasonable steps to protect their vehicles from loss or damage, the circumstances of the case did not establish negligence or collusion in the theft. Car stolen after keys left in ignition The Indian Express reported that the incident took place on the night of September 21, 2020, when the complainant was returning home and was allegedly robbed of his car by two or three persons.

An e-FIR was initially registered. Subsequently, following the intervention of the concerned court, additional provisions of the Indian Penal Code were added to the FIR. The man filed an insurance claim for the stolen vehicle, but the insurer rejected it under condition 5 of the policy, citing the fact that he had left the keys in the ignition. In a letter dated October 12, 2020, the insurer told the complainant that leaving the keys in the vehicle amounted to gross negligence and a breach of the policy's safeguards against loss.

It maintained that the rejection was justified. Despite receiving a legal notice, the insurer did not reconsider the claim, prompting the man to approach the consumer commission. 98 lakh Insurer alleges negligence, questions maintainability The insurance company contested the complaint, describing it as false and frivolous. It alleged that the complainant had concealed material information and was attempting to obtain an undue benefit from the insurer.

The company also argued that the vehicle was under hypothecation with a bank and that the financier should have been included as a necessary party to the proceedings. However, the complainant maintained that the claim had been arbitrarily rejected despite the theft being reported and the policy having been issued after verification. Commission rejects insurer's defence The commission held that the complaint was maintainable and that the complainant was entitled to the insured amount under the policy.

It observed that an insurer cannot automatically escape liability for every breach of a policy condition without considering the circumstances and whether the breach was fundamental to the incident giving rise to the claim. The commission also noted that the vehicle had been parked in a parking lot and that negligence or collusion in the theft could not simply be presumed from the circumstances. In its order, reported by The Indian Express, the commission highlighted the hardship caused by the rejection of the claim, noting that the insurer's own investigation report indicated that the complainant was not in a sound financial position.

It said the non-settlement of a genuine claim had caused the man considerable distress and loss. The commission directed the insurer to pay Rs 4 lakh, representing the vehicle's insured declared value, and Rs 25,000 towards litigation costs, harassment, mental agony and loss of time. The total amount payable was Rs 4.25 lakh. Although policyholders are expected to take reasonable precautions to protect their vehicles, an insurer's decision to reject a claim can be challenged before a consumer commission.

Consumers should keep the insurance policy, FIR, claim documents, investigation correspondence and rejection letter safely. Where a claim is denied over an alleged breach of policy conditions, the circumstances of the incident and the basis for the insurer's decision may be relevant in challenging the rejection.