Damage to property because of heavy rainfall is included in the definition of ‘flood’ and ‘inundation’ in the general insurance policy, the Supreme Court has ruled, rejecting the argument of Oriental Insurance that it was outside the scope of the policy. Loss because of heavy or extraordinary rain is not insured, the company argued. The case arose when heavy rainfall led to the flooding of coal stock held by J K Cement Works in Nimbahera. The claim was rejected on the tricky argument over the meaning of flood and inundation.
The insurer lost all the way, from district consumer forum to the National Consumer Commission. Rejecting the arguments of the insurer, the court pointed out that there was no doubt that heavy rainfall had occurred in the area, causing flood-like conditions that resulted in the coal kept on the premises being washed off. Moreover, the surveyor’s report also stated there was an accumulation of water because of the heavy rainfall and that had resulted in the coal being washed off. The court directed Oriental to pay Rs. 58.89 lakh as damages, with 9 percent interest.
