Insurance companies liable for full home loan repayment on policyholder’s demise: Rajasthan Consumer Commission
The complainant's husband passed away in December 2013 in a road accident, but despite being insured, only half of the loan amount was paid
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JAIPUR: The Rajasthan State Consumer Commission has ruled that if a consumer with home loan insurance dies during the policy period, the responsibility of repaying the entire loan falls on the insurance company.
In the instant case, the commission considered it a service defect on the part of the National Insurance Company to not pay off the home loan and ordered them to pay 8.91 lakhs to the bank.
The commission also directed the insurance company to pay 9% interest per annum since the complaint was filed.
This decision comes after a complaint was filed by Kanta Devi Nayak, whose husband had taken a loan of RS 10 lakhs in September 2011 from the Bank of Baroda and insured it through this company.
Her husband passed away in December 2013 in a road accident, but despite being insured, only half of the loan amount was paid by the National Insurance Company. They argued that since it was a joint loan, they were only responsible for half of it.
Dissatisfied with this partial payment ruling by the district consumer court earlier, Nayak appealed to the Rajasthan State Consumer Commission seeking full payment of their home loan amount.
