Insurance co told to pay for vehicle with rain-damaged engine

: Vehicle insurance companies can no more deny insurance claim for damage caused to engines due to waterlogging arising out of flashflood or heavy rain, if one were to go by this case.

The Tamil Nadu insurance ombudsman has set aside a denial order passed by HDFC ERGO General Insurance Company rejecting Rs 26.32 lakh claim made by a resident whose car was damaged in the 2017 flashflood.

The insurer has been directed to release the claim in 30 days.

According to the resident, his car parked outside his house was waterlogged by flashflood in November 2017.

As the vehicle was insured with HDFC ERGO through a comprehensive policy, he claimed insurance for damages sustained to the vehicle and its engine due to waterlogging totalling Rs 26.32 lakh.

 

But the claim was rejected by the insurer on the ground that damage to engine and related parts were due to hydrostatic lock besides being aggravated damages in nature and the same were not covered under the policy.

The company further contended that the complainant didn't take due care of the vehicle and the damage didn't happen while the vehicle was stationary but while in motion.

This lack of care aggravated the loss and the same is not covered under the policy, it added.

Recording the submissions, the ombudsman observed that the contention of the insurer that hydrostatic lock is not covered under the insurance police is not sustainable.

This forum is in agreement with the technical opinion obtained and concludes that insurer didn't submit any document to prove that the hydrostatic lock occurred due to cranking of the engine.

They also didn't furnish any report on the dismantled condition of the engine and the extent of damage to prove hydrostatic lock, the ombudsman added and held that the insurer is liable to honour the claim.