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Imagine you found the perfect motor insurance plan for your vehicle. You diligently paid all the premiums on time. But then, when you needed it the most - the insurer rejected your claim all because of a single mistake! This is EXACTLY what unfolded in the case.

Mool Chand Lalwani was fond of his vehicle, so he found the motor insurance plan that best suited his needs and got his vehicle insured. But on one unfortunate day, it got stolen. 💔 Panicked but determined, he did what any responsible person would - he reported it to the police and his insurer immediately.

But he faced disappointment - the insurer did not approve his claim! Why? 🚨 The insurer claimed he was NEGLIGENT. During the investigation, they found out that Mool Chand had left his keys inside the vehicle before it was stolen.

According to the insurer, this was a VIOLATION of the policy’s terms. Leaving the keys inside meant he didn’t take “reasonable care” of his vehicle - so they refused to pay the claim. He decided to fight back and filed a complaint in the District Forum.

Finally, Mool Chand took the first sigh of relief in a while when the District Forum asked the insurer to pay a percentage of the claim amount. But this relief was short-lived. 😥 The insurer was not convinced by the District Forum’s verdict and took the matter to the State Commission.

However, nothing much changed - the State Commission upheld the District Forum’s verdict. The insurer STILL wasn’t ready to give up.  🫤 The insurer went to the National Consumer Disputes Redressal Commission (NCDRC).

👩‍⚖️ The Commission heard the case and agreed that leaving the key inside the vehicle was a sign of carelessness. But the question was - can it be considered a “fundamental breach of the policy’s T&Cs”?  🧐 To find the answer, the Commission referred to previous Supreme Court rulings where a similar series of events had taken place. And they found their answer…

The National Commission shared that while leaving the key in the vehicle showed some carelessness - it cannot be considered a fundamental breach of the insurance policy’s T&Cs.  📝 Instead of rejecting the claim outright, the courts decided on a non-standard settlement. What does that mean? 🤔

Instead of paying 100% of the claim amount, the insurer was asked to pay 75% of the claim amount. But why was the claim settled on a non-standard basis - in simpler words - why did Mool Chand only get 75% of the actual claim amount?

Well, non-standard claim settlements happen, typically when the claimant's actions don't fully align with the policy's terms. In such cases, the insurer still provides compensation at a reduced rate, acknowledging that the violation wasn't intentional or severely detrimental. So after a LONG battle…

👩‍⚖️ In the verdict, the court allowed Mool Chand 75% of his claim amount with 9% per annum interest from the date of claim rejection, till the claim is paid. However, he still faced a loss of 25% of the claim as a punishment for his carelessness.

So what did we learn from Mool Chand’s experience? ✅ Always read your insurance policy document thoroughly. Your policy document outlines the terms under which a claim may be approved or rejected. Read it, understand it, and follow its guidelines strictly.

✅ A little negligence - even if unintentional - can reduce claim payouts. Mool Chand didn’t lose his vehicle on purpose, but one small mistake still cost him 25% of his claim. The insurer couldn’t fully deny his claim, but they still reduced the payout because of his carelessness.

✅ If you feel the claim rejection is unjust - complain to grievance redressal authorities. Ask for clear rejection reasons from your insurer. If you feel the reason for your claim rejection is unjust, escalate your complaint to grievance redressal authorities. You can file a grievance complaint with insurer’s Grievance Redressal Officer (GRO), who must respond within 15 days.

If unsatisfied with the response, you can escalate it to the Grievance Redressal Cell of IRDAI. If here too you don’t find an appropriate solution, you can take the case further to the Insurance Ombudsman and, if necessary, the Consumer Court. P.S. Filing complaints with the GRO, IRDAI or the Ombudsman is free but Consumer Court cases may involve fees.

For more such real-life stories that help you understand your insurance policies better, follow @BeshakIN !