Have you lost an accident insurance claim because your car was being driven by somebody who was not your ‘paid’ driver?
Now, those who have lost such claims since 1995 under the Personal Accident (PA) Cover can re-claim.
The Bombay High Court recently directed the Insurance Regulatory and Development Authority and Tariff Advisory Committee (TAC) to publicise the circular in which the TAC has clarified that unpaid / unnamed drivers are also covered under the policy.
On October 4, 2005, TAC had issued a circular clarifying that it has deleted the words “but not driving” from the India Motor Tariff (IMT) of 2002, which means unpaid drivers and non-owners driving the car are covered under the policy. But many insurance companies issued policies without incorporating the modification. And later, they rejected claims citing the deleted clause.
The issue came to light when the family of Rajesh Sheth, who died in a motor accident, filed a public interest litigation after the insurance company rejected its claims.
Rajesh died in a road accident in 2004. He was driving the family car, which was in the name of his father Girishkumar Sheth.
Girishkumar had a car insurance policy from New India Assurance Co. Ltd. that covered personal accident risk to: (i) owner-driver (Girishkumar), (ii) paid driver and (iii) unnamed passengers.
Sheth claimed Rs 2 lakh for Rajesh’s death but the company rejected it as “the policy covered only owner-driver, paid-driver and unnamed passengers but not an unpaid driver, which the deceased [Rajesh] was”.
Upholding the Sheth family’s entitlement, the court said: “If there are individual grievances of the people between the period 1995 to 2002, insurance companies will examine the same in accordance with law,” the court said.