Claim can't be rejected on mere suspicion

The insurer should have checked where the machines were being located while enhancing cover, not after lodging of claim

Oswal Plastic Industries had taken a fire and special perils policy from New India Assurance to cover its industrial establishment. The policy was issued on June 27, 2009. The sum insured was increased to Rs 2.5 crore from July 2, 2009.

A fire occurred on October 17, 2009 in which four machines and some raw materials got damaged. The insurer was intimated, and a claim for Rs 1,34,07,836 was lodged. The surveyor assessed the loss at Rs 29,17,500 on reinstatement basis, and Rs 12,60,000 as the depreciated value.

The claim was repudiated on the ground that the insured machine had been shifted