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Surveyor’s Report Is Not Final Word on Insurance Claim

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When it comes to handling general insurance claims, the surveyor has long been the one who was in control. They are the qualified professional who is responsible for assessing the nature and extent of your loss. The insurer company processes your claim on the basis of what the report by the surveyor has said. However in a recent case, the National Consumer Commission has said that the surveyor’s assessment didn’t need to be the final word when trying to settle a claim. Given the extent to which the insurance companies are able to depend on the surveyor’s report, this ruling is very significant.

In April 2005, the owner of Uni Ply Industries insured the stock in his factory with New India Assurance for a year. The insurance company issued a one page policy cover note but without any terms and conditions. The policyholder renewed the policy for another year in 2006 but then a fire broke out before the term ended. The surveyor approved by the Insurance Regulatory and Development Authority assessed the loss and the insurer made a small payment to the factory owner by invoking the excess clause.

According to the clause, in the event of a loss, the predetermined portion is paid by the policyholder. The factory owner didn’t agree with this but accepted the settlement as part of the payment. When he asked the insurance company to pay the balance later on, his request was rejected on the grounds that the matter had already been settled. In 2007, the owner filed a case on the grounds of deficiency of service with the district commission which was ruled in his favor. The insurance company’s appeal to the state commission went in favor of the policy holder. The New India Assurance then filed a revision petition with the National Commission questioning the finders of the state and district commissions.

The company’s main argument was that it had processed the claim based on the findings of an independent surveyor and there was no deficiency in the service. However, the National Commission held that it was incorrect on the part of the company to treat the payment as final settlement since the policyholder had accepted it only as a partial relief. His signing the discharge voucher didn’t end the matter. The ruling also referred to the court precedent that the surveyor’s assessment could not be treated as the final word. The Commission held that the company could not involve the clause because it had failed to issue the terms and the conditions for the policy to the factory owner. Based on this ruling, the National Commission reiterated that the role that the surveyor plays in processing claims is not the final place. "If the surveyor's assessment is not in line with the terms of the contract, or all material facts are not considered, it is likely to be set aside. The National Commission's verdict reinforces this dictum," says Rajagopal G, head of operations and claims, Bharti AXA General Insurance.