No insurance claim is admissible if a private car is given for commercial use. Here's why
1 min read 30 Mar 2023, 02:00 PM ISTThe car was stolen on September 29, 2021 after which the man had sought ₹4.90 lakh, including interest and legal fees, and compensation for mental harassment
PremiumA man's claim for compensation following the theft of his car was rejected by the Thane Additional District Consumer Disputes Redressal Commission over insurance norm violations as he had used a private car for commercial purposes, an official said on Sunday. The commission upheld the contention of the insurance firm that the man had filed his claim after 42 days of the incident.
Under a contract of insurance, it is extremely important for the policy holder to abide by the terms and conditions laid out in the underlying policy document.
If there is any breach of the terms of the policy, it is well within the right of the insurance company to repudiate the contract and/or reject the claim. It is equally important to note that a policy holder cannot claim anything more than what is covered by the insurance policy. Therefore, it is advised that at the time of entering into an insurance agreement, the intending policy holder must thoroughly go through the proposal form and the policy document.
Whenever a dispute arises between the policy holder and the insurance company, rights and obligations are strictly determined on the basis of the wording of the policy of insurance.
“In the instant case, the policyholder had availed the car insurance policy for his personal use. However, going against the terms laid down while the car was being insured, the policy holder had subsequent hired it out for commercial purpose. The District Commission rejected the claim of insurance as the underlying insurance did not extend to cover risk associated with commercial use. In many cases, situations like this arise. Therefore, as suggested above, the policy holders must be careful of the extent of risk cover and the risks excluded in the policy document to avoid rejection of claims at a later stage," said Simranjeet Singh, Partner, Athena Legal.
The Navi Mumbai businessman had also hired out his vehicle, which was against the norms laid down while it was being insured, the firm told the commission. The car was stolen on September 29, 2021 after which the man had sought ₹4.90 lakh, including interest and legal fees, and compensation for mental harassment, the official added.
With inputs from agencies
