Insurance firm asked to pay for goods gutted in fire

A consumer forum here has ordered United India Insurance to pay Rs 13.51 lakhs along with Rs 25,000 compensation to a complainant for goods destroyed in fire at a godown.
Nikita Enterprises stated in its complaint to the forum that it had stored some raw material used in paints and cloth in the hired godown in Thane's Bhiwandi town and had also taken a fire insurance cover of Rs 20 lakhs from the respondent company.
On June 21, 2010, the stock in the godown was gutted in fire and for the same it lodged a claim.
The insurance firm deployed a surveyor for valuation and after getting requisite documents from the claimant, it rejected the claim saying proper safety precautions were not followed and the godown was housed at an illegal premises.

However, Thane District Consumer Redressal Forum president Umesh Jhavalikar and member N D Kadam yesterday rejected the insurance company's stand.
The forum stated that as regards illegality of the godown, police have taken action against its owner and builder and not against the claimant, hence the latter cannot be held responsible for storage of stock in such a godown.

There is no clarity on the cause of fire. The surveyor has in its report clearly spelled out the cost of the stock destroyed in the blaze. However, as the surveyor's report is against the insurance company, it has taken a stand of not accepting the same, the forum observed.

It also rejected the insurance firm's stand that the fire might have been due to spontaneous fermentation of other chemicals stored in the godown and stated that the present claim relates to the complainant's stock destroyed in fire.
It further observed that while issuing the fire insurance policy, the insurance company would have done due diligence and now there is no reason to reject the claim for the destroyed stock.
Hence, the forum ordered the United India Insurance to pay a claim of Rs 13.51 lakhs to the complainant and also a compensation of Rs 25,000.