Automobiles are insured under Motor Policy. In India, known as Package Policy (now), the Policy provides indemnity to the Insured against loss or damage to the vehicle caused by a set of perils, so described in the Policy. The coverage is subject to exceptions and terms and conditions, which will have a bearing on liability and the extent of indemnification. One of the general exceptions states that ‘any accidental loss or damage to any property whatsoever or any loss or expense whatsoever resulting or arising there from or any consequential loss’ [is an exception and hence not payable] Amongst other conditions that are printed on the Policy itself, condition 4 states that ‘ The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk.’ In sum and substance, even where the loss is indemnifiable, any aggravation of loss caused by use of vehicle after the condition of accident will not be indemnified by the Insurer. Whilst the conditions are to be complied with, there is also the element of reasonableness or prudence – to the extent of which the compliance is practicable !! Here is an interesting case, widely reported in UK Press. It is a case of UK Insurers’ refusal to consider a claim for a Vauxhall car citing negligence of the insured. Three men armed with guns and knives stormed in to the shop where the owner of the car worked and took her keys away. The vehicle was reportedly insured with Admiral, a car insurance specialist which has its head office at Cardiff, Wales. From information available on web, it is noted that there are many versions of policies providing different coverage to automobiles in UK. Besides the standard coverage terms, there appears to be policy upgrades providing – additional loss protection, break down cover, hire car cover, installment protection plan, personal injury, premium protector and the like. Daily Mail UK reports that the Insurers refused a payout for the claim of car of a student whose car was stolen after armed robbers took her keys while holding a gun to her forehead. The trainee teacher reportedly spent 5 months fighting payment of the claim. Surely it would have bee traumatic when robbers put gun on head whence she had keys of her vauxhall corsa. In that robbery, raiders pushed her into the back of the store, demanding her to open the safe holding a gun on her head and knife at throat. In few minutes, thieves made off with about £1,000 and also stole Ms Buckler’s handbag containing her car keys. The vehicle was later was found by police ten miles away, lying in a field on its roof. The car, which was worth £2,000, was a write-off. She lodged a claim with her Insurers and they rejected her insurance claim because it said Ms Buckler had been negligent with her keys. The Insurers claimed that in her traumatised state, she had not reported her car keys stolen to the Insurer, but had done so to the police. The Insurers contended that the car thieves must have been the same criminals who had robbed the newsagent’s and had discovered her address by following her home from work that evening – and that the person should have realised the thieves would follow her and she should have changed the car’s locks. The Insurers maintained that it was entirely the fault of the insured that the car was stolen. The claimant stated that when she realised that thieves might follow her to the house, she changed her house locks. The insurer used this against her, stating that she understood the risk of her property being stolen. Realising the thieves may now know her home address after her car was stolen, Ms Buckler changed her house locks. But Admiral even used this against her, claiming she understood the risk of her property being stolen, even though this happened after the car had been taken. It is reported that the Insurers subsequently changed their stand and effected pay out o the claim. Quoting Insurers, it was reported that they had settled the claim and by way of apology had offered to waive the excess of £250 and offering her £500 compensation.’ The action was condemned and MPs warned the insurers they must not use small print and technical details to refuse legitimate payouts. Whilst the Insurers are very much within their rights to insist on compliance of policy and terms, the interpretations have to be pragmatic With regards – S. Sampathkumar.
Sept. 7; 2011....
