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Insurers cannot deny claim on hired cars

autos Updated: Mar 26, 2010 21:01 IST
Satya Prakash
Satya Prakash
Hindustan Times
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An insurance company cannot deny a vehicle owner’s insurance claim simply because the insured car was given on hire when it met with an accident, the Supreme Court has ruled.

A bench headed by Justice GS Singvi set aside an order of the National Consumer Disputes Redressal Commission that had said a vehicle owner would not get any claim if the vehicle in question was given to another person on hire at the time of an accident.

The order came on a petition by one Amalendu Sahoo, owner of an accident-hit car, who was denied insurance claim by Oriental Insurance Company Ltd on the ground that at the time of the accident the vehicle was given to somebody else on hire. Earlier, his claim was dismissed by the district forum and the state consumer dispute redressal commission on the same ground.

The apex court reversed the order. Relying on the guidelines framed by the insurance company to deal with such situations, the Supreme Court ordered that the insurance company to pay him Rs 2.5 lakh against his original claim of Rs 5 lakh. The guidelines did not talk of complete repudiation of claim.