What can you do if your car driver disappears with the vehicle? For Motor Insurance claim, you can approach the insurance company for compensation after lodging a complaint with the police.

However, a delay in FIR can complicate the claim process. Or if the insurance company finds some reason not to process your claim. Situations like this may put you in a prolonged battle for insurance claim, which may run for several years. This is what happened to Kehar Singh after his driver disappeared along with the vehicle in 2000.  He had to wait for over 23 years!

Following are details of what happened in this case. 

Faridabad resident Kehar Singh purchased a Tata Sumo on 30th November 1998. He had also purchased a vehicle policy with Insured Declared Value (IDV) of Rs 3 lakh. 

On 8th September 2000, Singh’s driver disappeared with the vehicle. When Singh approached police to report the matter, the latter didn’t lodge an FIR. But took note of the incident in its Daily Diary Report (DDR). Singh also informed the insurance company (United India Assurance Co.) about the incident. 

Remember, Motor Insurance companies never process a claim in case of a lost vehicle without a police report. So the only option left for Singh was to approach the local court. And he did. 

The local court directed the police to file an FIR in 2021. The police later submitted an untraced report after which Singh filed his claim before the insurer. 

However, the insurance company denied the claim. It said Singh delayed the intimation. Further, the insurer also said the insured had not furnished required documents for claim settlement! 

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After facing rejection from the insurer, Singh approached the District Consumer Forum in Faridabad.

On 17th October 2003, the District Forum allowed the complaint and asked the insurance company to pay Rs 3.6 lakh along with interest @12% p.a. from the date of theft of the vehicle till the date of realization. The District Forum also directed the insurer to pay Rs 5000 for mental agony and Rs 1000 towards the cost of litigation. 

The insurer, however, didn’t accept the order and approached the State Commission.

By the time the State Commission passed its order, nearly 15 years had passed from the day of disappearance of the vehicle.

In its order dated 12th December 2015, the State Commission partly allowed the appeal of the insurer but modified the order of the District Forum. 

The State Commission reduced the compensation to Rs 3 lakh from Rs 3.6 lakh while upholding the remaining orders of the District Forum.

The case didn’t settle even in 2015! 

The insurance company further approached the National Consumer Disputes Redressal Commission (NCDRC) with the following points:

• The insurer said its surveyor had assessed the value of the vehicle to be Rs 2.3 lakh. 
• Singh reported the theft to the insurer after 17 days, which was in violation of the policy conditions. 
• The insurance company argued the District Forum and the State Commission didn’t take into account the 17-day delay by Singh in reporting the theft. 
• Further, the insurer said that the vehicle was insured for Rs 3 lakh only. At the time of theft, it was already 9 months old. Therefore, it should have been accounted for depreciated value as assessed by the surveyor at Rs 2.3 lakh. 
• It also said that the District Forum and State Commission should have appreciated the fact that the delay in intimation may result in the thief carrying the vehicle very far for the police to trace the vehicle, or that it may be dismantled.  

What NCDRC said on Motor Insurance Claim

In its order dated 2nd January 2024, the NCDRC held that the surveyor’s assessment of the vehicle to be worth Rs 2.3 lakh was “reasonable and proper”. Therefore, it modified the previous order by reducing the amount for the loss of the insured vehicle to Rs 2.3 lakh. The NCDRC, however, agreed to the other directions of the District Forum. 

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The above story is based on the NCDRC Order dated 02 January 2024 in United India Insurance Co. Ltd vs Kehar Singh. All the facts of the story are from the order.

Disclaimer: The above content is for informational purposes only. Please read the offer documents carefully before buying any insurance policy.

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