It is shocking, but nearly 80 per cent of disputes in the consumer discussions relate to insurance claims. A series on important case laws on insurance: Should an insurance claim be paid to insured or financer?Inder Singh Chauhan had purchased a bus by taking a loan from Swami Financers. The bus was being used as a private service vehicle, and not as a public transport one. It was insured under a comprehensive insurance policy issued by United India Insurance. The bus met with an accident, for which insurance was claimed. The insurance company appointed its surveyor, who assessed the loss at Rs 1,26,500. However, the company deducted Rs 33,125 from the assessed amount, on the ground that the driver did not have an endorsement on his licence to drive a transport vehicle. Even this amount was not paid to Chauhan but was directly paid to the financer.Aggrieved, Chauhan filed a consumer complaint that ultimately reached the National Commission. It was held that once a person had a licence to drive a heavy goods carriage vehicle, it would mean that he/she was entitled to drive a transport vehicle, including a public service vehicle. Accordingly, the insurance company was directed to pay the balance amount, along with 12 per cent interest and costs of Rs 5,000.The commission also ruled that the practice adopted by insurance companies of directly paying to the financer, without informing the insured or without his consent, cannot be justified. If the insurance policy is taken in the name of the vehicle purchaser, there is no question of paying the amount straightaway to the financier. [United India Insurance Co Ltd v/s Inder Singh Chauhan - IV (2006) CPJ 15 (NC)] Can an insurance company independently challenge the award under a professional indemnity policy?During a gall bladder surgery, Mohinder Kaur developed ventricular tachycardia, followed by ventricular fibrillation. She suffered cardiac dysrhythmia and went into coma due to medical negligence, becoming bedridden at the age of 45. A case was filed against the surgeon, the anaesthetist, and the hospital. The insurance company was a party to the proceedings. The District Forum awarded a compensation of Rs 2 lakh, payable by the insurance company on behalf of the doctors under the professional indemnity policy. This was challenged in appeal before the State Commission, which upheld the Forum's order. The doctors did not continue further litigation, but the insurance company filed a revision petition before the National Commission.Observing that it was incumbent on the insurance company to indemnify doctors under the professional indemnity policy by paying the amount awarded by the consumer media, the commission stated the challenging of the order by the insurance company without rhyme or reason is neither proper nor desirable. The commission expressed deep anguish that such petitions were being filed. It observed that such cases are not meant to be fodder for the legal department and the insurance company cannot go on a spree in filing such petitions. The commission stated it was restraining itself this time but warned that if such petitions are filed in future, heavy cost would be imposed. The agony of a consumer must end at some stage. It is the duty of the insurance company to see that frivolous cases were not filed to clog the wheels of justice, which result in wastage of time. While dismissing the revision petition, the commission directed the order be sent to the chairman-cum-managing directors of all insurance companies. [New India Assurance Co Ltd v/s Hardip Singh & Others - II (2003) CPJ 103 (NC)].

Questions "' 1. What portion of consumer disputes can be relatable to insurance claims? 1 mark 2. State the insurance policy that was issued by United India Insurance to Inder Singh Chauhan? 1 mark 3. According to the insurance company surveyor what was the amount to be paid to insured after loss assessment? 1 mark 4. What was the insurance company directed by National Commission in Chauhan's case? 2 marks 5. What was the practice that commission declared unjustied for the insurance companies? 1 mark 6. What did the District Forum do for Mahinder Kaur under professional indemnity policy? 2 marks 7. According to the commission what is the duty of insurance company towards its consumers? 2 marks