Owner denied insurance claim after car catches fire from a puncture on highway, insurer ordered to pay Rs 70.75 lakh

A car owner was denied an insurance payout after his luxury BMW vehicle caught fire on a highway following a tyre puncture, with the insurer arguing that leaving the car unattended overnight violated the terms of the policy. A consumer commission has now overturned that decision and ordered the insurer to pay the full claim.

The order brings an end to a dispute that stretched on for years, with the case facing repeated dismissals before the commission finally ruled that the insurer's reading of the policy did not hold up.



What Happened On The Highway

The car developed a tyre puncture at night while travelling on a state highway. With no mechanic available at that hour, the driver parked the vehicle near a roadside dhaba, locked it, and rolled up the windows before leaving. By the next morning, the car had been gutted by fire.

Why Did The Insurer Reject The Claim

The insurer rejected the claim citing a condition in the policy that bars leaving an insured vehicle unattended without taking proper precautions to prevent further loss. According to the insurer, locking the car and walking away still amounted to abandoning it on the highway.

What Arguments Did The Insurer Make

The insurer argued that the driver should have either stayed with the car or moved it to a nearby safer spot instead of leaving it overnight. It also questioned why the spare tyre was not used, or why the car was not towed back using a second vehicle that had arrived at the spot. The insurer further claimed the fire looked suspicious, pointing out that burnt grass found near the scene was around fifty metres away from the car.

On the question of compensation, the insurer contested the car's value itself, arguing that after factoring in depreciation and a period when the vehicle had gone uninsured, its worth should not exceed around Rs 59 lakh. It also claimed the owner, described as a wealthy former MLA with several vehicles, had the means to arrange better protection for the car but chose not to.

What Did The Consumer Commission Say

The commission held that Condition 4 of the policy did not amount to a blanket ban on leaving a broken down vehicle unattended, only that proper precautions needed to be taken. Locking the car, rolling up the windows and parking it beside a known landmark were found to meet that standard. The commission called the insurer's argument that the driver should have spent the night alone in the car hyper technical, and said no person could reasonably be expected to risk personal safety to guard a vehicle on a dark highway.

How Did The Commission Treat The Fire And Value Dispute

The commission found no evidence linking the vehicle being left unattended to the actual cause of the fire, which remained undetermined. On the value dispute, it held that the insured declared value fixed when the policy was issued cannot be lowered unilaterally by the insurer at the time of settling a claim.


What Counts As A Reasonable Precaution Under Such Policies

The commission said what qualifies as a proper precaution cannot be judged rigidly and must depend on the ground realities of each case, including the time of night, availability of help, and practical options before the owner at that moment.

How Much Was The Insurer Ordered To Pay

The insurer was directed to pay the insured declared value of Rs 70 lakh along with 7 percent annual interest from the date the claim was first rejected. On top of this, the insurer was ordered to pay Rs 50,000 towards mental agony and harassment, and Rs 25,000 towards the cost of litigation, taking the total payout to Rs 70.75 lakh excluding interest.