Delay Of Four Years In Claim Repudiation: NCDRC Holds National Insurance Company Liable For Deficiency In Service

The National Consumer Disputes Redressal Commission (NCDRC) has held the National Insurance Company liable for a deficiency in service due to an inordinate delay of four years in repudiating an insurance claim. The commission observed that an insurance company is obligated to process and decide on a claim within a reasonable period. A prolonged and unexplained delay causes significant uncertainty and hardship for the policyholder. The NCDRC stated that even if the insurer ultimately decides to reject the claim, the decision must be communicated in a timely manner. The four-year delay in this case was deemed unacceptable and a clear service deficiency. This ruling protects consumers from administrative lethargy on the part of insurance companies and establishes that they are entitled to compensation for the mental agony and financial uncertainty caused by such unreasonable delays, regardless of the final outcome of the claim itself.