NCDRC orders National Insurance to pay Rs 31.85 lakh fire claim with 9% interest

The National Consumer Disputes Redressal Commission (NCDRC) has ordered National Insurance Company to pay Rs 31.85 lakh to a retail firm whose shop in Begusarai, Bihar, was destroyed by fire in March 2013. In an order pronounced on 22 October 2026, the commission held the insurer deficient in service and added simple interest at 9% a year from 25 October 2013.

What Happened

The firm ran a sportswear franchise outlet insured under a Vyapar Suraksha shop policy. A fire on the night of 22-23 March 2013 gutted the outlet, and the firm reported it the next day. A surveyor (an expert who assesses insured losses) submitted his final report on 25 September 2013.

Per the order, the insurer neither paid nor gave reasons for rejecting the claim for nearly three years. It asked again for documents that the commission found were already with the surveyor, appointed an investigator in 2016 without recording any reason, and closed the file as "No Claim" in September 2016. The commission held that sending a discharge voucher for signature is not payment, and that an insurer cannot hold back an admitted amount because the customer disputes a "full and final" settlement.

The commission cited the insurance regulator's policyholder rules, which require an insurer to offer settlement or reject a claim with reasons within 30 days of the survey report. It accepted the surveyor's assessment as the measure of the loss. It rejected the firm's claim for Rs 49 lakh in business loss, because the policy did not include business interruption cover.

What It Means

The insurer must pay Rs 31.85 lakh with 9% simple interest from 25 October 2013 until payment, plus Rs 50,000 as litigation costs, within 45 days. If it misses that deadline, the total due will carry interest at 12% a year. The order may be appealed.

For policyholders, the ruling underlines that a claim cannot be kept pending indefinitely after a survey report, and that a disputed settlement offer does not excuse non-payment of the amount the insurer itself accepts. Consumers facing an unsettled claim can seek help through the National Consumer Helpline (1915) or file a complaint on e-Daakhil.

Source: Consumer commission order