Insurer can’t shift burden of official errors onto policyholders: State commission

Dehradun: Emphasising the responsibility of insurance companies to verify discrepancies in official documents before rejecting claims, the state consumer commission directed National Insurance Company Limited (NICL) to settle an insurance claim in favour of complainant Sher Singh Kholia. The commission ruled that Kholia was entitled to Rs 2.38 lakh as insurance compensation, along with interest from the date of filing the claim and litigation costs.Kholia had purchased a Maruti Alto, which was substantially damaged in an accident on April 14, 2006. He subsequently approached NICL for compensation, but the insurer rejected the claim on the ground that he did not possess a valid driving licence at the time of the accident.NICL based its decision on a report from ARTO, Haldwani, which stated that Kholia’s driving licence was valid only until May 31, 2001, although the licence itself showed a validity period up to May 31, 2011.The commission noted that the dispute stemmed from an alleged error by the licensing authority in recording the licence’s validity period. It observed that “ordinary citizens rely on statutory documents issued by competent authorities and cannot reasonably be expected to independently verify official records.”Finding no evidence of “wilful misrepresentation”, the commission held that Kholia had acted in good faith based on the validity period mentioned on his licence. In its order delivered on Saturday, the commission underscored the obligation of insurance companies to authenticate discrepancies in official documents before repudiating claims and reiterated the importance of protecting consumer rights.