Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Insurance Companies Consumer Protection Act Householder Insurance 1986 Principle of ‘under-insurance’ |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Case Disposed Off |
Headnote | Insurance – Householder Insurance – Appellant purchased a householder insurance policy from the respondent-Insurance Company, wherein coverage of articles/items in the house of the appellant was “as per list” – However, “as per list” policies were discontinued by the respondent and fresh policies were issued for consolidated amounts, which were also taken by appellant– After an incident of burglary in appellant’s house, he claimed householder insurance – Plea of Insurance Company that a large number of items claimed to be stolen were not insured and there was a lot of under-insurance – Held: Under-insurance means that the insured has taken an insurance policy in which he has valued the insured items for a sum less than the actual value of the insured item – This is done to pay a lesser premium – However, it is harmful to the policy holder because even if the entire insured property is lost, the policy holder, at the maximum can only get the sum for which the property was insured – But, when all the goods are not destroyed, the Insurance Company can apply the principle of averaging out i.e. the insured is paid an amount proportionate to the extent of insurance as compared to the actual value of the goods insured – Therefore, when a group of items is insured under one heading and only some of the items and not all items are lost/stolen then the principle of under-insurance will apply – However, if all or most of the items of value covered under the policy are stolen, then the insurance company is bound to pay the value of the goods insured – Applying this principle, appellant directed to be paid accordingly – In addition, claimant awarded Rs.25,000/- as compensation and litigation expenses with interest @12% p.a. w.e.f. 01.01.2009 till payment – Insurance Company shall be entitled to adjust/deduct the amounts already paid/deposited by it – Consumer Protection Act, 1986.Insurance – Insurance Companies – Plea taken by the Insurance Company that the appellant-claimant did not produce invoices for the items claimed to be stolen – Held: On facts, the claim should not have been rejected only on the ground that invoices were not produced – Once the insurance company itself changed its policy from ‘as per list policies’ to ‘policies for consolidated amounts’, then an insured is not expected to give the item-wise details along with the valuation – Consumer Protection Act, 1986.Insurance – Insurance Companies – Duty of – Held: Insurance company must at the time of accepting the premium advise the policy holder properly – It cannot accept the premium without asking for any details and later deny its liability on the ground that such details were not given – Consumer Protection Act, 1986.Doctrines/Principles – Principle of ‘under-insurance’ –Explained. |
Judge | Hon'ble Mr. Justice Deepak Gupta |
Neutral Citation | 2018 INSC 19 |
Petitioner | I. C. Sharma |
Respondent | The Oriental Insurance Co. Ltd. |
SCR | [2018] 1 S.C.R. 571 |
Judgement Date | 2018-01-10 |
Case Number | 3167 |
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