Car catches fire after late-night puncture; 14 yrs later, insurer ordered to pay Rs 70 lakh

The commission also awarded Rs 75,000 towards mental agony, harassment and litigation costs.

According to The Indian Express report, the insurer had rejected the claim on the ground that the vehicle was left unattended and that the owner or his driver should have stayed back to protect it.

The commission rejected the argument, holding that an insured person cannot be expected to put his own safety or that of his employee at risk merely to guard a stranded vehicle.

“The law does not and cannot compel an insured individual or their employee to jeopardise their physical safety or risk their life merely to guard a depreciating material asset,” The Indian Express quoted the commission as saying.

The order was passed on September 16 by presiding member Poonam V Maharshi and member Dr Nisha Amol Chavhan.

Car catches fire after late-night puncture

The Indian Express reported that the incident took place on the night of March 8, 2012, when the insured car suffered a tyre puncture on a state highway.

The vehicle was moved to the roadside near a food outlet. The owner said its windows were rolled up and it was securely locked.

As the incident occurred late at night, the owner and his driver returned to Solapur in another vehicle.

When they returned the following morning, they found that the car had been completely burnt. The incident was subsequently recorded by the police and fire department.

Insurer rejects Rs 70 lakh claim

The car was insured under a policy valid from December 22, 2011, to December 21, 2012. Its Insured Declared Value (IDV) was Rs 70 lakh, and the owner had paid a premium of Rs 1,65,996.

Although the insurer registered the incident as a total loss, it later rejected the claim.

The insurer argued that the vehicle had been left unattended without adequate precautions to prevent further damage or loss.

It said the owner or driver should have remained with the car, replaced the punctured tyre using the spare wheel or moved the vehicle to a safer location.

It also questioned why the second vehicle could not have been used to tow the damaged car back to Solapur.

Insurer says owner should have stayed with car

The insurer relied on the owner’s police statement acknowledging that the car had been left at the location overnight. It also disputed the suggestion that burning grass had caused the fire, pointing out that the burnt grass was around 50 metres away from the vehicle.

The insurer further argued that depreciation should be taken into account and claimed that the car’s value was no more than Rs 59 lakh.

Commission rejects insurer’s reasoning

The consumer commission found that the relevant policy condition did not impose an absolute prohibition on leaving a broken-down vehicle unattended.

Instead, it said the precautions taken by the insured had to be assessed in the circumstances of each case.

The commission noted that the car had not been recklessly abandoned in the middle of the highway. It had been moved to the side of the road near a landmark, its windows were rolled up and the vehicle was locked.

The puncture had occurred late at night and, according to the material before the commission, there was no tyre repair facility or mechanic available at Dhulkhed.

The commission therefore found that returning to Solapur in another vehicle while leaving the car securely parked was a reasonable decision in the circumstances.

No evidence that leaving car unattended caused fire

The commission also found no evidence establishing a direct link between the car being left unattended and the subsequent fire.

The police panchnama and fire brigade report did not establish the exact origin of the fire. The insurer also failed to produce forensic evidence showing that the owner’s absence had caused or contributed to the fire.

The commission further held that the failure to replace the punctured tyre could not justify rejecting a total-loss claim arising from a separate peril such as fire.

Finding no evidence of wilful violation, gross negligence or mala fide conduct, it concluded that the repudiation of the claim amounted to deficiency in service.

Rs 70 lakh IDV to be paid

The commission also rejected the insurer’s argument that the car’s value should be reduced to Rs 59 lakh because of depreciation. It held that once the Rs 70 lakh IDV had been agreed upon and the corresponding premium charged, that value was binding for a total-loss claim.

The insurer was directed to pay Rs 70 lakh with 7% annual interest, calculated from November 23, 2012, the date of repudiation, until the amount is actually paid.

It was also directed to pay Rs 75,000 towards mental agony, harassment and litigation costs.

Takeaway

The case highlights that an insurer cannot automatically reject a claim merely because a broken-down vehicle was left unattended. The circumstances in which the vehicle was left, the precautions taken by the owner and whether the alleged breach had any connection with the eventual loss are relevant while assessing an insurance claim.

For motorists stranded at night, the ruling also underlines that personal safety need not be compromised to guard a damaged vehicle. Keeping the vehicle locked, moving it to a reasonably safe location and preserving photographs, police records and other evidence of the incident can help establish the precautions taken if an insurance claim is later disputed.