Not for insured to chase insurance cos all the time: HC

Srinagar: Stating that it wants flood sufferers to restart their life, the J&K High Court has directed insurance companies to contact on their own all the claimants in whose favour cheques have been prepared.
“We feel that if a cheque is prepared on October 12 it must be on the basis of claim made by claimant wherein he must have given his contact number. Therefore, the insurance company could easily contact. It is not for the insured to chase the insurance company all the time,” a Division Bench Chief Justice M M Kumar and Justice Ali Mohammad Magrey said.
“The insurance company shall contact all such claimant in whose favour cheques have been prepared asking them to file undertaking and then handover the cheques to them,” the court said after examining compliance/status report filed by various insurance companies and hearing senior advocate Z A Shah who represented many claimants.
In his submission, Shah said that in many cases the cheques have been prepared in accordance with the directions issued by court for an amount representing 50 percent of the assured sum and in cases where the insurance policy involves more than Rs 25 lakh, cheques have not been handed over as yet.
However, the status report filed, court said, would show that the amount stands paid.
Subsequently, the court put the query to advocate J. A. Kawoosa, senior Additional Advocate General, who stated that there are cases where undertaking by the insured has not been filed and, therefore, the cheques have not been handed over.
The court also answered the query on whether the cases where preliminary survey report has been received, the order of 50 percent could continue to operate or the amount as per the preliminary survey report has to be paid.
“The spirit of the order passed by this court on September 26 and October 1 is that expeditious disbursement of the amount be made so that the party who have suffered extraordinary damages may start their life and in such cases an undertaking was required to be filed.”
It was not to give handle to insurance companies to delay payment and keep on waiting for the preliminary survey report to come, the court said.
However, it said, in cases where the survey report has been received then the amount has to be disbursed as per the assessment made by the surveyor.
“(It) would of course be considered under protest as the remedy to challenge the preliminary or final survey report would remain open to the claimant under the ordinary law.”
However, the court said, no undertaking would be required to be filed as per its directions 26 September and October 1.
“It is also made clear that in cases where the preliminary or final survey report has been received, a copy of the same shall be furnished to the insured so that he may be able to analyze the report and avail his remedy in accordance with law of the land.”
The insured who has been paid the amount of 50 percent under the direction of the court shall also cooperate with the insurance company by furnishing essential documents available with them so that final settlement is arrived at, the bench said.
Regarding motor vehicles, the four public sector general insurance companies—National Insurance, Indian Assurance, United Insurance and Oriental Insurance— stated that they are following the policy in vogue with the Bajaj Allianz General Insurance Company—a cash loss basis for partially damaged vehicles.
As per it, the insured is given the options to take vehicles to garage of their choice to get the same repaired and serviced.
“The insured may also take the vehicle to any mechanic, and if the amount spent is more than the amount received then it could still be settled by the insurance company as per policy adopted by the Bajaj Allianz General Insurance Company.”
The court also allowed advocate Shah’s plea to file counter to status report filed by various companies.
Shah pointed out that there could be discrepancies in the data furnished to the court by the companies and an opportunity be provided to file the counter so that any party aggrieved of the action taken by the insurance companies may come before the court by filing appropriate motion.
The court also directed the companies to file latest status report before November 18, next date of hearing in the case.
The court was hearing a Public Interest Litigation filed by two advocates—G A Lone and Jehangir Iqbal Ganie—in the aftermath of floods.