The Incident –
On the 4th of April, 2012, Mr. Vilas Vaitty’s car was stolen from Nerul. The car was parked outside a guest house there. He registered a complaint and also informed his insurance company about the same. He had insured his vehicle for Rs.4 Lakhs with TATA AIG General Insurance. On 9th October, 2012, Mr. Vaitty was told that his insurance claim was rejected by the company.
In the year 2014, Mr. Vaitty approached the Central Mumbai District Consumer Disputes Redressal Forum and filed a complaint. The insurance company in its defence said that they rejected the Mr. Vaitty’s claim because he had purchased a Private Car Package Policy from them and as per this policy an insurer cannot use his or her car for rent purposes. They added that since Mr. Vaitty’s car was stolen while it was on rent, he cannot claim the insurance money and the complaint had to be dismissed.
After considering everything, the Central Mumbai District Consumer Disputes Redressal Forum asked the insurance company to pay Rs.3.50 Lakhs to Mr. Vaitty as compensation. The Forum said that according to the law when a vehicle is stolen, then insurance companies cannot reject the claim on the basis of the purpose for which it was used. The Forum also said that even if there was breach in the conditions laid down in the policy, the law set by the Supreme Court of India allows the claim money to be given to the complainant.
Lesson to be learnt from the above incident –
If you have purchased a Private Car Package Policy from your insurance company and then used the car for commercial purposes, then it is very likely that your insurance company might reject your insurance claim in case your car is stolen or damaged.
In such a situation, the company has to still pay you the claim amount as they cannot use the purpose for which the car was used as a reason to reject the claim.
You can also use the Supreme Court Law mentioned above, which states that complainants are entitled to the claim money even if there was a breach of the conditions mentioned in the insurance policy.
GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017