In November 2016, a Bengaluru-based cab driver, GT Manjegowda, was denied his insurance claim because it was found that the cabbie was driving “under the influence of alcohol". According to news reports, the surveyor had ascertained 75% car damage but about five months later the insurer rejected the claim.

Since driving was Manjegowda’s only source of income, getting the claim approved was very important and that’s when he decided to escalate this to the District Consumer Disputes Redressal Forum and filed a case against his insurer in 2017. It took two years for the court to rule that Manjegowda’s claim be settled immediately by the insurer along with an additional penalty for causing him mental distress. The court based its rule on the fact that the cabbie had consumed alcohol "under permissible limits". While Manjegowda was fortunate enough to get his money, we find out what the insurance rule book says.

Animesh Das, head of product strategy at Acko General Insurance said as per the terms and conditions of motor insurance products, accidental damages or liability arising when the driver is under the influence of alcohol is not covered. However, he said, there have been cases where court has ruled in favour of the vehicle owners. “Rejecting the claim if the driver was under the influence of intoxicated material is as per the law. Though the same needs to be proven. In this case, customer had all his rights to escalate the matter to a court and get his dues," said Das. Anik Jain, co-founder and chief executive officer, Symbo Insurance said drink and drive has always been a permanent exclusion in all motor insurance policies. “If the policyholder is driving the vehicle and is drunk within the prescribed limits by Motor Vehicle Act then the policyholder can claim under own damage section of motor policy," he added.

Note that in India, the permissible blood alcohol content (BAC) is set at 0.03% per 100 ml blood which works out to 30mg of alcohol per 100 ml of blood.

“As per policy wordings of most insurers, a claim can be rejected if the person is known to be intoxicated or for substance abuse. Additionally, claim under any illegal activity can be rejected," said Abhishek Bondia, principal officer and managing director, Other than consuming alcohol, your motor insurance claim could also get rejected if you delay filing the claim, if the accident has happened due to the driver’s negligence, non-disclosure or wrong declaration of information, driving without or with an expired driving license, delay in changing the vehicle’s lock if the keys were stolen earlier, not filing an FIR and so on.

Tarun Mathur, chief business officer, general insurance, said the permissible limits are generally mentioned in traffic laws from a safe driving perspective. These are never mentioned in insurance and policy becomes mostly null and void if the person is under influence of alcohol. “Almost all the policies have terms that reject or don’t allow claims if the accident has happened when the person is under the influence of alcohol," said Mathur.

As for the case of Manjegowda, Das said it is not clearly black or white if one refers to the terms and conditions of an insurance policy. “In case of doubt, policyholders can report such cases to the Insurance Regulatory and Development Authority of India (Irdai). Irdai takes strict action against such companies and even penalises them in case of exploitation of customers," said Das. Mathur said the regulator has provided for guidelines where insurers have established processes for escalation of grievances as well as to approach an ombudsman. “This specific case, as it looks like, doesn’t seem to be any loophole. The insurer can reject the claim as per their terms and had done so," said Mathur. Bondia said, in settling such cases, a lot depends on the adjudicating authority. In the cabbie’s case, the authority was in his favour.

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