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The , has held liable for for refusing to transfer a motor insurance policy to the new owner of a Honda WR-V without producing any material to support its objections. Partly allowing a complaint filed by advocate , the Commission directed the insurer to pay ₹50,000 as compensation for , and ₹5,000 towards , within one month, failing which interest at 9 per cent per annum will be payable until realisation.
The ruling means an insurer cannot reject a request for by citing vague or alleged vehicle damage unless it identifies the specifics and places supporting material on record.
Robinson, a practising advocate, bought the 2019 Honda WR-V registered as TN38CT0547 from its previous owner, also an advocate. The car was covered by an IndusInd comprehensive package policy bearing No. 920222523111190671, valid from , to . After the , updated the registration certificate in his name on , Robinson applied on to have the policy endorsed in his name.
He furnished the updated registration certificate, the existing policy, his address, email, mobile number and nominee details as required. He also uploaded photographs of the vehicle from all four sides, the front, rear and odometer. The insurer rejected the request, saying the photographs were unclear. It then sent executives on two separate occasions to inspect and photograph the vehicle physically. Robinson alleged that when he asked why the request was still not processed, he was orally told that the “Advocate” stickers issued by the , affixed to the lower corners of the front and rear windshields, had to be removed.
The complainant pointed out that the same stickers were on the vehicle when the insurer originally issued the policy and collected the premium, and that the previous owner was also an advocate. He maintained that the stickers did not alter the identity, chassis number, engine number or insured characteristics of the vehicle. After repeated follow-ups, he sent a dated . The insurer did not comply, and Robinson filed the present complaint under , seeking endorsement of the policy, ₹5 lakh compensation and ₹5,000 costs.
IndusInd defended the refusal. It argued that the photographs were unclear and insufficient, and that a physical inspection revealed which had not been disclosed when endorsement was sought. The insurer called this . It said inspection and photographic verification were integral to its underwriting process and that conditions, including removal of stickers, advertisements or external markings, could be imposed before acceptance or endorsement of risk. It relied on , and the ’s decision in to argue that only , not , automatically transfers on sale of a vehicle. It also relied on on the insured’s duty to comply with policy conditions.
Commission finds no inspection report or photographs
The Commission accepted that an insurer may inspect a vehicle and assess risk before processing an endorsement, but held that the process must be fair and transparent. It found that the insurer’s email replies contained the same general reasons and did not specify which photographs were unclear or where the alleged dents and scratches were located. It also noted that no inspection report, photograph or other material was produced to establish the alleged .
“No inspection report identifying the alleged damage has been produced. No photographs have also been produced by the OPs, to establish the nature and extent of the alleged ,” the Commission observed.
The Commission also rejected the insurer’s reliance on Complete Insulations. It held that the decision did not assist the insurer because Robinson was not claiming automatic transfer of the policy. “However, the said decision does not assist the OPs in the present case, since the complainant has not claimed automatic transfer of the policy. On the contrary, he approached the OPs and specifically applied for endorsement of the policy in his name after the transfer of ownership.”
Sticker removal not shown as policy requirement
On the “Advocate” sticker issue, the Commission recorded that the insurer had not produced any underwriting guideline or policy provision making removal of stickers mandatory. The insurer had not shown any term or condition requiring such removal or justifying the refusal on that ground.
“A general reference to internal , without placing the relevant requirement on record, cannot by itself justify the refusal to process the complainant's request,” the Commission held.
The Commission said that if genuine was established, the insurer would be entitled to assess risk before granting an endorsement. But in this case, despite two physical inspections, the insurer failed to communicate clear, specific and substantiated reasons. The failure to process the endorsement therefore amounted to under the .
Expired policy defeats endorsement, not compensation
During the pendency of the complaint, the policy expired on . Robinson disclosed that he had obtained a fresh policy from for the period from , to . The Commission therefore held that the relief seeking endorsement of the expired policy could not be granted in its original form.
The Commission nevertheless held that the expiry did not take away Robinson’s right to seek compensation for the deficiency committed while the policy was subsisting and while his endorsement request remained unprocessed. It took into account the insurer’s repeated failure to process the request, the absence of substantiated reasons, and the fact that Robinson had to use the vehicle for a considerable period without clarity on the availability of insurance coverage, particularly for own-damage claims, exposing him to potential disputes in the event of an accident.
Weighing these factors, the Commission awarded ₹50,000 instead of the ₹5 lakh claimed, together with ₹5,000 as . The bench of President R. Thangavel and Member P. Marimuthu directed that the opposite parties, , make the payments within one month from receipt of the order, failing which interest at 9 per cent per annum will apply until realisation. The complaint was partly allowed.
