'Insurance cos cannot reassess value of vehicle'

A consumer court has ruled that insurance companies are not allowed to re-assess the market value of an insured vehicle once a policy for a specific amount is issued against the requisite payment.

"Once an insurance policy for a specific amount is issued against the requisite payment, it is no more open to the insurance companies to re-open the issue as to the market value of the vehicle," Delhi State Consumer Disputes Redressal Commission (SCDRC) observed.

Directing the appellant, National Insurance Company, to pay Rs 1,80,000 with 9% interest from the date of filing the claim to the date of its order, the commission, comprising Justice J D Kapoor as president and Rumnita Mittal as member, asked the body to pay Rs 3,000 also as litigation cost to the respondent Dharam Pal Machocha of Lajpat Nagar.

The commission further stated that if the insurance companies were allowed to re-assess the market value of the vehicle after the event the very purpose of receiving the premium against the specific insurance amount would be rendered meaningless and of no significance.

National Insurance Company had preferred an appeal before the commission following an order by the district consumer forum to pay Rs 2,00,000 with interest of 9% to Machocha who had lost his vehicle on May 25, 1999 whereas it was insured on August 26, 1998.