Hyderabad: Consumer panel asks Tata AIG General Insurance to pay ₹4.25L for Mercedes-Benz repairs

Hyderabad: Hyderabad District Consumer Disputes Redressal Commission–I has directed Tata AIG General Insurance to pay Rs 4,25,046 to the complainant for repair costs and related compensation.

The Commission ruled that rejecting a motor insurance claim without valid and convincing reasons constitutes a deficiency in service.

Background of the case

The complainant, Prashanth, a resident of Banjara Hills, reported that on April 29, 2023, he encountered a technical issue while starting his Mercedes-Benz GLA 220.

A warning message indicated a power steering malfunction. He immediately approached an authorized Mercedes-Benz service centre at Sanathnagar, where technicians detected damage to the steering rack harness caused by rodent bites.

Insurance claim and dispute

Prashanth informed Tata AIG the same day and sought approval for repairs under his vehicle insurance policy. However, following an inspection conducted through a surveyor agency on May 5, 2023, the insurer claimed that the wiring was not damaged by rodents but appeared to have been cut using a sharp object.

Based on this assessment, the insurance company stated that it had rejected the claim and sent a communication to the complainant on August 11, 2023. Prashanth, however, contended that he never received this letter and that it was produced for the first time during the proceedings before the Commission.

Arguments before the Commission

The complainant argued that there was an unexplained delay in communicating the decision and that the insurer failed to conclusively prove the grounds for rejecting the claim. He also submitted that he had already paid Rs 3,10,046 towards repair expenses out of pocket.

Commission’s Findings

After examining the case records, evidence, and arguments from both sides, the Commission concluded that the damage resulted from external factors covered under the insurance policy. It held that the insurer’s failure to provide timely and justified reasons for claim rejection amounted to a deficiency in service.

Order

The Commission directed Tata AIG General Insurance to compensate the complainant with Rs 4,25,046, affirming that the arbitrary denial of legitimate claims is not permissible under consumer protection laws.