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Is an insurance surveyor's report binding?

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Several consumer forums treat the report of an as a and accept it without question. This is not correct. The surveyor's report is undoubtedly an important document that has to be given due consideration as the surveyor is an independent expert. It is generally binding, unless the flaws therein can be substantiated and proved. I will deal with two judgments of the on this issue.

, a firm, had insured two of its rice mills, buildings, and stocks lying in the godown and in the open. The policy was for Rs 23 lakh and covered risk against fire, storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation. During a cyclone, the rice mills' buildings along with paddy stocks, boiled rice, raw rice, broken rice, bran and empty gunny bags were damaged. A claim was lodged with the insurance company.

In its complaint before the district forum, the firm alleged the representative of the insurance company, who visited the site along with the surveyor, did not bother to assess the loss and instead made unlawful demands. The firm refused to comply with the demand and complained to the insurance company about the surveyor. The insurance company assured the claim would be settled on the basis of documents and there was no cause of worry. Documents in support of the claim were submitted after getting the estimate of loss certified by the mandal revenue officer ().

After considerable delay, the claim was rejected on the ground that there was nothing to substantiate the loss had been caused due to the cyclone. This conclusion was arrived at as the surveyor had reported that physical verification of the stocks had not been given and the photographs submitted did not indicate presence of rainwater. The firm admitted the physical verification of the stock has not been given, but claimed this was because the stock had to be disposed off before the expiry of the transport permit.

The district forum dismissed the complaint. The firm appealed to the state commission, which partially allowed the claim. The matter, thus, reached the National Commission with the insurance company filing a revision petition.

The Commission observed at least some part of the stock should have been preserved for physical verification. The surveyor's report is a credible piece of evidence unless proved otherwise. In this case, the firm was unable to produce any credible evidence to controvert the findings of the surveyor. There was no evidence to substantiate the allegation of the demand for a bribe by the surveyor. Accordingly, the National Commission set aside the order of the state commission and upheld the district forum's order dismissing the complaint.

The other case is of . Singh's vehicle, insured with United India Insurance, met with an accident, and the surveyor failed to give a copy of his report to Singh. Although the claim was for Rs 1 lakh, the surveyor persuaded Singh to accept Rs 75,000 on a cash-loss basis so that the matter was settled within a month. However, the claim was not paid. Instead various excuses were made, including disputing the validity of his driving licence, to avoid settlement of the claim. Singh claimed adequate compensation should be granted as he was a serving officer who had been inconvenienced and harassed by the insurance company.

While deciding the revision petition, the National Commission observed the recommendation of the surveyor might carry some weight in the determination of the compensation. But it is not sacrosanct or binding. Considering the totality of the circumstances, the Commission held a lump sum compensation of Rs 2 lakh would meet the ends of justice.

So, the correctness of a survey report can be disputed, if there is evidence to establish that it is incorrect.


The writer is a consumer activist

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