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Old 22nd March 2017, 17:41   #1
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Default Pune Court: Customer not bound by tie-up between car dealer & insurer

  • Shankar Raghunath Chavan, a resident of Kusegaon in Daund, had purchased an insurance policy from the Bajaj Allianz General Insurance Company for his car on September 21, 2012 through the dealer.
  • And renewed 2013-2014 term policy through the dealer. At the end of the term, he had received a reminder from the insurance company for the renewal of his 2014-2015 policy.
  • Through the net banking facility, Chavan made a payment of the renewal premium, worth Rs 21,053, for the term between September 21, 2014 and September 20, 2015. He then made repeated requests to the company for the issuance of the policy document.
  • However, in December 2014, when he approached the company, he was shocked to learn that his policy had “expired due to non-renewal”.
  • The company did not renew his policy even after his repeated reminders. This prompted him to move the consumer court.
  • The company argued that the consumer did not route the payment through the vehicle dealer by way of a demand draft, as was required under an agreement between the company and the vehicle dealer.

    Pune Court: Customer not bound by tie-up between car dealer & insurer-bajaj.jpg

    The court observed the following :-
  • It is the case of the insurance company that as per practice prevailing between the company and the dealer, the payment should be made by demand draft through the dealer so that the policy can be renewed conveniently.
  • However, a tie-up between the dealer and the insurance company is not binding upon the consumer.
  • The court has directed the Bajaj Allianz General Insurance Company in Yerawada here to refund a premium of Rs 21,053 — along with an annual interest of 9% since September 20, 2014 (Rs 4,700) — and a Rs 5,000 fine.

Can this ruling form a precedent to reject compulsory insurance from dealers while buying new cars?


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Old 22nd March 2017, 18:15   #2
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Default Re: Pune Court: Customer not bound by tie-up between car dealer & insurer

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Originally Posted by johannskaria View Post
[list]
Can this ruling form a precedent to reject compulsory insurance from dealers while buying new cars?
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There is no compulsory insurance from dealers per se. Most of the time it is us the customers, who adjust and take the insurance from the dealer. Reasons maybe faster delivery promise, the veiled threat of "sir, if you go through outside insurance, the claims may be rejected or delayed" and all such other hogwash that the dealers come up with.

We can always chose to go with outside insurance or at least get the dealer to match the insurance quote from outside. Of course, if we are ok with the insurance quoted by the dealer, we can go ahead with it.

Edit: The insurance comapny's act in the above scenario though is inexplicable. Will they forgo on any additional commissions if the insurance does not come through the dealer? What is the reason for not accepting the money even though it has landed directly onto their bank accounts?!!

Last edited by arvind71181 : 22nd March 2017 at 18:17.
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Old 24th March 2017, 13:11   #3
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Default Re: Pune Court: Customer not bound by tie-up between car dealer & insurer

Exactly, we go through the dealers just for some convenience. I had however purchased insurance through Bajaj Allianz on my dzire directly online. The rates quoted by the dealer and the rate offered on the website differed around 3-4k so it was definitely worth the hassle. Dealer was also offering policy from Bajaj but without any add-ons.
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Old 24th March 2017, 21:11   #4
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Default Re: Pune Court: Customer not bound by tie-up between car dealer & insurer

Very rightfully decided by the Consumer Court. While buying new motor vehicles, the buyers are lured to get accessories and insurance from the dealer. The less we speak about the accessories from dealers, the better. Let me restrict to insurance as the topic says.

Many gullible buyers believe that if the insurance is done through the dealer, the claims could be hassle-free, should any eventuality need an insurance claim. This is quite OK as the tie-up of specific comprehensive insurance providers with the respective dealers is seamless, when it comes to claims, should such a need arise.

But not as a rule, as rightfully inferred by the Consumer Court ! The motor vehicle buyer is free to choose the insurance company of his or her choice and it is not at all binding for such buyer to go by the dealer's dictates. One can also bargain with insurance providers for a reasonable premium, that is ruled out in case the dealer - insurance provider nexus where they both are linked up.
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Old 7th April 2017, 09:03   #5
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Smile Re: Pune Court: Customer not bound by tie-up between car dealer & insurer

While this is good news, I see a kink in the same. Agreed that the motor vehicle buyer has every right to choose the Insurance co of his/her choice, but one needs to look from the workshop's point of view too. Handling and coordinating claims from all Insurance co's would be too much of a hassle which would ultimately delay the repair work. It is in the best interest of the workshop to tie up with a few Insurance co so that the claims processing/handling would be a smoother process both for the workshop and customer. The workshops have their own headaches of recovering the repair cost from the Insurance co's. More the Insurance cos, more the paper work and dedicated resources required. Not all workshops are equipped for this.

My personal opinions.
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Old 13th May 2017, 19:42   #6
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Default Re: Pune Court: Customer not bound by tie-up between car dealer & insurer

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Handling and coordinating claims from all Insurance co's would be too much of a hassle which would ultimately delay the repair work. It is in the best interest of the workshop to tie up with a few Insurance co so that the claims processing/handling would be a smoother process both for the workshop and customer. The workshops have their own headaches of recovering the repair cost from the Insurance co's.
Good point. Also, this will lead them to receive easy approvals for the vehicle repair cost (hiked).
With the improvement in IT infrastructure; processing of claims have definitely improved. This is good news I believe.
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