Surat Consumer Court Mandates Full IDV Payout in Landmark Car Insurance Ruling
The Surat Consumer Disputes Redressal Commission (CDRC) has delivered a significant verdict, questioning the methodology of an insurance surveyor and ordering ICICI Lombard General Insurance Ltd to pay the complete Insured Declared Value (IDV) of Rs 20.3 lakh to a Volvo car owner following a crash. This decision underscores the binding nature of insurance agreements and criticizes insurer tactics in claim settlements.
Disputed Valuation and Court Intervention
In a contentious case, the insurance surveyor estimated the post-crash value of the Volvo car at merely Rs 8 lakh, starkly contrasting with the IDV of Rs 20.3 lakh for which the owner had paid a premium of Rs 60,021. The court firmly stated that the customer, having paid the premium for the specified IDV, is entitled to that full amount in the event of a total loss. The commission took a harsh view of the insurer's approach, highlighting inconsistencies in the surveyor's report.
Details of the Accident and Claim Rejection
The car owner had secured a policy with an IDV of Rs 20.3 lakh from ICICI Lombard on July 17, 2021. The incident occurred on July 11, 2022, on the Surat–Bardoli road during rainy and foggy conditions with low visibility. The car collided with a truck that braked abruptly from behind. Police attended the scene, but no FIR was filed as there were no injuries. The vehicle was transported to the authorized Volvo workshop in Hazira, where the repair estimate amounted to Rs 18.44 lakh.
In November 2022, the insurer denied the claim based on the surveyor's assessment, which pegged the car's market value at Rs 8 lakh. The rejection cited grounds of misstatement of facts, unproven cause of loss, and alleged improper maintenance by the owner. This prompted the owner to escalate the matter to the consumer court for redressal.
Court Proceedings and Key Observations
During the proceedings, the car owner presented photographic evidence from his mobile phone, capturing the rainy weather at the accident site, which the court accepted as valid proof. The commission scrutinized the surveyor's report, which inaccurately showed the loss as zero and valued the car at Rs 8 lakh. The court noted that the surveyor had visited the Volvo-authorized service station, yet the insurer failed to justify why the loss was estimated at zero despite an Rs 18.44 lakh repair bill.
The Surat CDRC emphasized, "The market value of the car was shown to be Rs 8 lakh. However, the IDV was Rs 20.3 lakh, for which the premium was paid. As the IDV is part of the agreement between the insurer and the car owner, there is no reason or situation to make an estimate against the IDV in this case." This observation reinforced the contractual obligation of the insurer to honor the IDV in total loss scenarios.
Final Ruling and Implications
Since the repair bill exceeded 75% of the IDV, the court classified the car as a total loss. Consequently, it directed ICICI Lombard to compensate the owner with the full IDV of Rs 20.3 lakh. This ruling serves as a precedent, highlighting the importance of transparent valuation practices and upholding consumer rights in insurance disputes, potentially influencing future cases in the automotive insurance sector.
