Insurance Cos can't deny claims for violation of other laws
The National Consumer Commission has held that insurance companies, if the terms of the policy were not breached, cannot refuse to entertain claims on the pretext that the insured violated some other laws or conditions.
By PTI |
NEW DELHI: The National Consumer Commission has held that insurance companies, if the terms of the policy were not breached, cannot refuse to entertain claims on the pretext that the insured violated some other laws or conditions.
"The insurance company cannot repudiate the claim when there is no breach of terms of the policy, as the insurance is a matter of contract between parties," the National Consumer Disputes Redressal Commission said.
Allegations that the insured violated some other laws would not entitle insurers to deny just claims of "hapless" consumers, a Commission bench comprising Justice M B Shah and Members Rajya Lakhsmi Rao and K S Gupta said.
It was deciding a petition filed against the Chennai State Consumer Commission verdict, justifying the repudiation of an accident claim by the United India Insurance Company Ltd (UIICL) on the ground the car, at the time of accident, was being plied without the 'fitness certificate' as required under the Motor Vehicle (MV) Act.
Setting aside the State Commission judgement, the apex Commission made it clear the insurance policies were "not statutory contract".
In fact, the policies were private ones which can only be guided by their own terms and not by something else, the Commission said, and asked UIICL to pay Rs 61,508 to one G Kothainachiar, a resident of Srivilliputtur in Tamil Nadu, within six weeks as compensation including the claim amount.
Kothainachiar's insured car, whose fitness certificate expired on May 30, 1995, subsequently met with an accident.
The insured, after being denied the claim by the insurance company, approached the District Consumer Forum which allowed his complaint and awarded compensation to him.
"The insurance company cannot repudiate the claim when there is no breach of terms of the policy, as the insurance is a matter of contract between parties," the National Consumer Disputes Redressal Commission said.
Allegations that the insured violated some other laws would not entitle insurers to deny just claims of "hapless" consumers, a Commission bench comprising Justice M B Shah and Members Rajya Lakhsmi Rao and K S Gupta said.
It was deciding a petition filed against the Chennai State Consumer Commission verdict, justifying the repudiation of an accident claim by the United India Insurance Company Ltd (UIICL) on the ground the car, at the time of accident, was being plied without the 'fitness certificate' as required under the Motor Vehicle (MV) Act.
Setting aside the State Commission judgement, the apex Commission made it clear the insurance policies were "not statutory contract".
In fact, the policies were private ones which can only be guided by their own terms and not by something else, the Commission said, and asked UIICL to pay Rs 61,508 to one G Kothainachiar, a resident of Srivilliputtur in Tamil Nadu, within six weeks as compensation including the claim amount.
Kothainachiar's insured car, whose fitness certificate expired on May 30, 1995, subsequently met with an accident.
The insured, after being denied the claim by the insurance company, approached the District Consumer Forum which allowed his complaint and awarded compensation to him.
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