Punjab consumer commission orders National Insurance to pay closed car damage claim

The Punjab State Consumer Disputes Redressal Commission on 21 October 2026 held that National Insurance Company was deficient in service when it closed a policyholder's car damage claim without deciding it on merits. The commission ordered the insurer to pay Rs 5,18,373, the loss assessed by its own surveyor, with 6% yearly interest, plus Rs 60,000 as compensation and litigation costs.

What Happened

According to the order, the policyholder, a Pathankot-based firm, had insured an XUV500 with National Insurance for 2015-16. The car was damaged in a rear-end collision near Ludhiana railway station on 10 October 2016. The insurer closed the claim in November 2017, saying the cause of the accident in the claim form differed from the one in the police report and that the policyholder did not respond to its letters.

The commission held that both versions described the same rear-end collision, and that the insurer had not shown the difference affected the damage, the genuineness of the accident or any policy exclusion. It held the claim could not be rejected on a "hyper technical ground" after the insurer had already surveyed the loss.

The District Consumer Disputes Redressal Commission, Gurdaspur, had on 13 May 2022 ordered payment of the full repair bills of Rs 6,91,336 and Rs 15,000. Partly allowing the insurer's appeal, the state commission held the surveyor's assessment of Rs 5,18,373 should be relied upon, as the policyholder had not rebutted it. It ordered interest at 6% a year from 19 November 2017 until payment, raised the compensation to Rs 60,000, and set 45 days for compliance.

What It Means

For motor insurance policyholders, the order says a difference in how the cause of an accident is described does not by itself justify closing a claim, unless the insurer shows it matters to the loss or a policy exclusion. It also shows commissions give weight to a surveyor's report unless it is challenged with evidence, such as authorised service centre estimates.

The order may be appealed. Policyholders with a rejected claim can approach the National Consumer Helpline (1915) or file a complaint on e-Daakhil.

Source: Consumer commission order