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How To Claim Road Accident Compensation (Part 5) – Insurance Policy
Usual defenses taken by the insurance companies
As the insurance company is also made a party to the proceedings they can take any of the following defenses for claiming that it is not liable to pay road accident compensation.
(a) That the Insurance policy does not cover use of vehicle for hire or money. If the vehicle does not have the permit to ply for hire or money.
(b) That the insurance policy excludes the use of vehicle for organized racing and speed testing;
(c) That the insurance policy excludes driving by a person not holding license or who has been disqualified from holding or obtaining a driving license. However, the mere fact that the respondent was not holding a valid license at the time of accident (for e.g. the licence recently got expired) will not entitle the insurance company to refuse payment of road accident compensation to the third party or to the insured. Thus if a father (the insured and the owner of vehicle) allows his son to drive his car and the son hits a pedestrian, if the tribunal makes an award of road accident compensation in favor of the pedestrian, the insurance company is liable to pay the amount to the pedestrian.
Note: The insurance company is not liable if the default is willful for instance, if in the above example the father allow his minor son to drive than the insurance company will not be liable to compensate.
(d) That the policy excludes injury due to war, civil war, riots or civil commotion;
(e) That the policy was obtained without disclosing the material facts.
Apart from the above mentioned grounds, the insurance company is not entitled to take any other defense in a claim made against it to avoid liability. The insurance company cannot limit the liability under the policy to a specified amount. The limit of liability is the amount of liability incurred and the insurance policy cannot provide for a lower limit. This rule has one exception-namely, if the liability is towards the damage to a property of the third party, then the Act has specifically provided a limit of Rs.6000.
Today due to specialized tribunals having been set up, it takes usually less than a year to have the case decided in MACT tribunal. Sometimes insurance companies, even after the MACT awards the road accident compensation do not make the payment of compensation and go for further appeals. This act of going in for appeal does not mean that the insurance company can avoid paying the road accident compensation amount unless the insurance company has obtained a stay order in this respect. So in such cases where insurance company delay and refuse to pay compensation on grounds of appeal, one must initiate execution proceedings and claim the payment of compensation.
Appeal
If you are aggrieved by the decision of the Claims Tribunal, you can prefer an appeal before the High Court within 90 days from the date of the decision. Before going for appeal it should be borne in mind that an appeal may take between 2-7 years time to settle the matter. Though there are no major additional charges involved baring the lawyer"s fee in case of appeal.
Useful Tips
1.One should immediately lodge an FIR in case of accident;
2.Should keep all the medical bills, transport expenses due to expenditure, any special expenditure (e.g. if because of accident one loose one leg then the bill for the artificial foot replacement; or if accident makes the victim immobile then ask the doctor to specify that for rest of the life two attendants will be required to take care of the victim). In case of accident resulting in death one should annex proper documentation in terms of the income of the deceased.
3.The lawyer"s fees for such cases varies from place to place they may charge anywhere between5-15% of the claim amount.
4.To claim the compensation in case of hit and run cases, the applicant will have to make an application in Form I along with discharge receipt in Form II and an undertaking in Form V to chief inquiry officer, who could be a sub-divisional officer, tehsildar or any other officer in charge of revenue sub-division of the district or such other officer not below the rank of sub divisional officer or a tehsildar.
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