Page 39 - Insurance Times March 2022

the claim. United India Insurance had challenged an order The top court gave the insurers a period of two months to
of the National Consumer Disputes Redressal Commission complete the task. The court had on 16 March 2021 and 3
which dismissed the company's petition challenging an August 2021 passed detailed orders in this regard. It had
earlier redressal in Rajasthan. allowed the General Insurance Council (GIC) to launch a
mobile application where first information reports (FIRs),
The vehicle, a Mahindra Bolero with an insured sum of Rs. detailed accident reports and photographs can instantly be
6.17 lakh, had expired 10 years ago. The top court dismissed uploaded by police and tribunals across the country and
the insurance claim saying there is a fundamental breach allow uniform access to insurance companies for speedy
of the terms and conditions of the policy. What is important processing of claims. People have gradually started looking
is this Court's opinion of the law, that when an insurable at contactless or zero touch services where they do not have
incident that potentially results in liability occurs, there to come in physical contact with a third party.
should be no fundamental breach of the conditions
contained in the contract of insurance. Customers place a high value on an easy process and
individualized options and want to buy from insurance
The Supreme Court made the observation, noting that the companies that serve up comprehensive policy information
Bolero SUV had been driven without a valid registration on that is tailored to their specific situation. Across all purchase
the date of theft. The offence is a violation of Sections 39 options, the human factor (or personal contact) is a crucial
and 192 of the Motor Vehicles Act, 1988. This results in a component of converting a prospect into a customer.
fundamental breach of the terms and conditions of the
policy, as held by this Court in Narinder Singh (supra), A growing population of 1.38 billion and the soaring
entitling the insurer to repudiate the policy. aspirations of India's populace are presenting the
opportunity for motor insurance companies to tap large
This court is of the opinion that the NCDRC's order cannot volumes of prospective consumers.
be sustained. The owner of the vehicle had bought the
insurance policy in Punjab, despite being a resident of Sri To understand the effect, firstly one needs to know the
Ganganagar, Rajasthan. 10 years ago, his vehicle was stolen importance of motor insurance. It is the second-largest
from a parking lot in Jodhpur. He lodged an FIR at Jodhpur business segment of the insurance industry that contributes
alleging commission of offences under Section 379 (theft) around 40 percent of the total premium collected by the
of the Indian Penal Code. Few months later, the police general insurance companies, in which approximately 41
lodged a final report stating that the vehicle was percent of the premium share comes from the own-damage
untraceable. insurance cover that the court has made mandatory.

Insurers to develop app to allow faster The Indian auto insurance consumer is not really risk-averse
but risk-loving, considering at least 58% vehicles registered
motor accident claims payments: in India are still uninsured despite third-party insurance

The Supreme Court has rejected a request from insurance being mandatory. Besides, at present, almost 65-70 percent
companies for more time to develop a mobile application of the two-wheelers running on the roads avoid the
for nationwide use by victims of road accidents, police; possession of own-damage policy by the second year, while
motor accident claims tribunals and insurance companies for approximately 20 percent to 30 percent of the four-wheelers
the speedy settlement of compensation claims. During a tends to shun the owning of own-damage policy by the fourth
hearing on the matter, the court heard that the insurance year.
companies were willing to develop a mobile app if certain
specific directions were given by the court. It shows the scope of coverage lies under this own-damage
insurance cover. Driving without a valid insurance can be a
In response, the top court said, "The directions given earlier huge problem and you can end up in paying penalty of Rs
are comprehensive enough. The insurance company cannot 2000 for first offence, Rs. 4000 for subsequent offence as
wriggle out of the directions. Either they are able to develop per amended Motor Vehicle Act 2019. Liability only policy
it or we would call upon the government to develop an app (Third party insurance) is mandatory for all vehicles, at least
which would have to be imposed on the insurance liability only policy should be renewed as there to use vehicle
companies." in public place as per Motor vehicle Act 1988.

The Insurance Times, March 2022 39