Rs 50 lakh personal accident claim denied over “misrepresentation”; insurer’s own investigator found it valid; here’s why nominee won

A Rs 50 lakh insurance claim was rejected over alleged “misrepresentation”. But there was a problem: the insurer's own investigator had found the accident genuine and the claim payable.

The Kurnool Consumer Commission has now directed ICICI Lombard General Insurance Company to pay the full Rs 50 lakh claim, saying the insurer had failed to provide sufficient evidence to justify its rejection. The case highlights what policyholders should know when an insurer rejects a claim.

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What happened in the case?

The deceased had taken a life cover from ICICI Lombard with a sum assured of Rs 50 lakh. The policy was issued on December 19, 2024, and was valid until December 18, 2025. The premium paid was Rs 4,767, and his brother was named as the nominee.

On April 14, 2025, the insured died in a road accident after an unknown vehicle allegedly hit his motorcycle. The policy was in force on the date of the accident.

The nominee informed the insurer and subsequently submitted the claim form and relevant documents seeking the policy benefit.

“However, the insurer subsequently repudiated the claim, alleging that there had been “misrepresentation of facts” to obtain insurance benefits. The insurer also maintained that the nominee had failed to provide several documents required for processing the claim, including the police final report and other claim-related documents,” says Vivek Kumar, Advocate, Delhi High Court.

Why did ICICI Lombard reject the ₹50 lakh claim?

The insurer argued that it had repeatedly contacted the nominee and asked him to submit additional documents, including the police final report, income-tax returns, cancelled cheque and other claim-related documents.

According to the insurer, the nominee failed to provide the required documents despite reminders. It therefore closed the claim and repudiated it.

The insurer also relied on alleged misrepresentation of facts.

In its June 28, 2025 email, ICICI Lombard stated that further scrutiny and verification of the claim documents had revealed misrepresentation of facts to obtain the insurance benefit and that the claim therefore fell outside the policy terms and conditions.

What did the consumer commission find about the missing documents?

The Commission examined the insurer's contention that it had sent several reminders to the nominee.

“However, the Commission found an important evidentiary problem. Although the insurer referred to communications allegedly sent on May 17, 19, 21 and 25, 2025, it did not produce postal receipts, acknowledgements, tracking reports, courier records, email delivery reports or other proof showing that those communications had actually been dispatched and served upon the nominee,” explains Kumar.

The Commission therefore held that merely mentioning dates of alleged communications was not sufficient to establish that the nominee had actually received them or had been given a reasonable opportunity to comply.

According to Kumar, the Commission also noted that the insurer had not established that the absence of the police final report, at that stage, extinguished or suspended its contractual liability. Nor had it produced evidence showing that the eventual police report contained anything adverse to the claim.

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What did the consumer commission rule?

The Commission held that the repudiation/non-settlement of the claim, without a valid and substantiated ground under the policy terms, amounted to deficiency in service.

According to Vishal Jain, Founder and Senior Partner at Ayaam Legal, the Commission found that:

1. The insurer's own investigator had found the incident "genuine" (Pg. 9), confirmed head injury as the cause of death, and recommended the claim as payable.
2. The insurer never said which fact was misrepresented, when, or how it mattered to accepting the risk.
3. There was no postal, tracking or delivery proof that the reminders were sent or received.
4. The pending Police Final Report did not cancel the insurer's liability.

The Commission therefore held that the nominee was entitled to the policy's ₹50 lakh sum assured.

How much did ICICI Lombard have to pay?

The District Consumer Disputes Redressal Commission, Kurnool, directed the insurer to pay the nominee the full Rs 50 lakh sum assured, along with Rs 20,000 as compensation for mental agony and Rs 5,000 towards litigation costs.

If the order was not complied with within 45 days, the Rs 50 lakh awarded amount would carry interest at 9% per annum from October 6, 2025, until realization.

What does this case mean for insurance policyholders?

According to V. Anush Rajan, Advocate-on-Record, Supreme Court of India, policyholders and nominees should be careful about the documentation and communication involved in a claim.

Insurance policies provide for a procedure/formality to be followed by the beneficiary to lodge a claim. This also includes the documents to be provided to support the claim. These must be strictly followed unless it is shown that the documents requested are onerous and difficult to obtain.

Additionally, every letter and e-mail received from the insurance company and the reply sent to them must be carefully archived.