Punjab commission orders United India Insurance to pay burglary claim lost over plot number

The Punjab State Consumer Disputes Redressal Commission on 28 October 2026 ordered United India Insurance Company to pay a Ludhiana knitwear firm's burglary claim that it had rejected because the policy showed the wrong plot number. The commission also held Canara Bank, which arranged the cover, deficient in service and ordered it to pay Rs 75,000.

What Happened

According to the order, the firm's owner had loans and a cash credit limit from Canara Bank, which insured the firm's machinery and stock through United India Insurance policies. After a theft on the night of 28-29 November 2014, the insurer rejected the claim in October 2015, saying the burglary policy covered plot No. 14 while the loss was at plot No. 16. The Ludhiana District Commission dismissed the complaint in February 2022.

On appeal, the State Commission noted that the insurer's own fire policy for the same period named plot No. 16, that its investigator inspected only plot No. 16, and that nothing showed the firm had two premises. It held that plot No. 14 was a typographical mistake. On a second policy covering stock, which carried the firm's old address, the commission found that the bank's own sanction letter and stock statements showed plot No. 16, and held that the bank should have given the insurer the correct address.

The commission set aside the district order. It directed the insurer to pay Rs 2,13,000, the machinery loss assessed by its investigator, and to settle the stock claim after assessing the loss. Canara Bank must pay Rs 75,000 as compensation and litigation costs. The order must be complied with within 60 days of receiving it, failing which the insurer is liable to pay the Rs 15 lakh claimed.

What It Means

The order says an insurer cannot reject a claim over an evident address error in a policy when its own records and investigation point to the right premises, and that a bank arranging insurance for a borrower must give the insurer the correct address. Borrowers whose banks arrange cover for stock or machinery can check that the policy shows the right premises. The order may be appealed. Policyholders with rejected claims can complain through e-Daakhil or the National Consumer Helpline on 1915.

Source: Consumer commission order