Thrissur Consumer Commission Orders IFFCO Tokio to Pay ₹20 Lakh for Wrongful Rejection of Accident Insurance Claim

January 29, 2026 : The Consumer Disputes Redressal Commission, Thrissur has held IFFCO Tokio General Insurance Co. Ltd. guilty of deficiency in service and unfair trade practice for arbitrarily rejecting a personal accident insurance claim filed by a policyholder who suffered severe disability following a road accident.

The Bench comprising President C.T. Sabu and Members Sreeja S. and Ram Mohan R. directed the insurer to pay ₹15 lakh as the insured amount along with ₹5 lakh as compensation for the agony, hardship and financial loss caused to the complainant. The Commission also awarded ₹10,000 as litigation costs, with interest at 9% per annum from the date of filing of the complaint until realization. The insurer has been directed to comply with the order within 45 days.

The complaint was filed by Thomas, a resident of Nadathara in Thrissur district, against the Branch Manager of IFFCO Tokio General Insurance Co. Ltd. and the insurer’s head office. Thomas had purchased an electric scooter and obtained an insurance policy that included a personal accident cover for the owner-driver with a capital sum insured of ₹15 lakh for the period from 22 November 2019 to 21 November 2024.

According to the complaint, on 19 September 2020 Thomas met with a road accident while riding the insured scooter. He was first taken to the General Hospital, Thrissur and later admitted to the Neurosurgery Department of Aswini Hospital. Doctors diagnosed him with quadriplegia caused by spinal cord injury, along with cervical spine fractures at C6 and C7, rib fractures and other serious injuries. He underwent treatment for around two weeks and incurred hospital expenses of about ₹86,445, after which he remained bedridden and dependent on others for daily activities.

The accident was reported to the police and the complainant subsequently lodged an insurance claim. At the request of the insurer, he appeared before a Medical Board which certified that he had suffered 75% permanent physical impairment due to traumatic quadriparesis affecting the cervical spine. Despite this, the insurer repudiated the claim in June 2021 stating that the case did not fall within the scope of the personal accident cover under the policy.

Challenging the repudiation, the complainant approached the Consumer Commission alleging that the insurer had rejected the claim on unfounded grounds despite clear evidence of disability caused by the accident.

After examining the policy documents and medical records, the Commission observed that the insurer did not dispute the existence of the policy, the occurrence of the accident or the disability assessed by the Medical Board. However, it failed to provide any convincing explanation as to how the claim fell outside the personal accident coverage.

The Commission noted that the policy provided compensation in cases of permanent total disablement caused by accidental injury. It further held that while the Medical Board assessed physical disability at 75%, such spinal injuries effectively resulted in complete functional disability for the insured.

Observing that insurers dealing with accident policies cannot ignore the practical consequences of severe spinal injuries, the Commission held that the repudiation was arbitrary and unsupported by any logical reasoning. It termed the insurer’s action a “blind denial based on unfounded and unexplained reasons,” rendering the rejection legally unsustainable.

The Commission also emphasised that accident insurance policies are purchased by ordinary individuals as protection against unforeseen calamities. Arbitrary denial of legitimate claims, it said, undermines public trust in the insurance system and defeats the purpose of consumer protection.

Holding the repudiation unlawful, the Commission allowed the complaint and directed the insurer to pay the insured amount, compensation and costs with interest.

Case Title: Thomas vs Branch Manager, IFFCO Tokio General Insurance Co. Ltd.
Case No.: CC/492/21