Insurer rejects claim over expired licence after fatal crash, widow wins Rs 10 lakh

A Rs 300 annual insurance premium was meant to secure Rs 10 lakh for a family if tragedy struck. But when a man died in a road accident in May 2024, his widow’s claim was rejected because his driving licence had expired. Nearly two years later, a Karnataka Consumer Commission has directed the insurer to pay the Rs 10 lakh, holding that the fatal crash was caused by a tipper lorry driver’s negligence and that rejecting the claim amounted to deficiency in service.

The Hassan District Consumer Disputes Redressal Commission president Chanchala C M and member Anupama R were hearing a complaint filed by the woman, aged around 60, against a private insurer and a private bank over the rejection of her husband’s accidental death insurance claim.

“The accidence occurred due to rash and negligence manner of lorry driver and the insured man had not contributed in any manner to the accident. The rejection of the claim made by opposite party 2 (the insurer) is injustice and amounts to deficiency of service,” the commission on October 1.

The man died on May 6, 2024, after a tipper lorry hit his two-wheeler from behind on the Konanur-Ramanathapura Road in Hassan district. The insurer refused to pay the insured amount, citing his expired driving licence.

Husband paid Rs 300 annual premium

According to woman’s complaint, her husband held a savings account with the bank and had enrolled in the insurance scheme offered by the private insurer. The bank had assured him that his nominee would receive Rs 10 lakh in the event of his accidental death. He agreed to an annual premium of Rs 300, automatically deducted from his account. The last two premiums were recorded on December 29, 2022, and December 27, 2023. The commission noted that the policy was in force when the accident occurred.

Konanur police registered a case against the lorry driver and later filed a chargesheet attributing the accident to his rash and negligent driving. The complainant submitted the claim documents to the bank, which forwarded them to the insurer, but the claim was rejected.

Insurer cites expired licence

The insurer argued that the man did not hold a valid driving licence on the date of the accident. It also contended that his family had failed to inform the company about his death immediately, as required under the policy conditions. The insurer also questioned the commission’s jurisdiction and argued that the complaint was time-barred. The bank denied responsibility for rejecting the claim, saying the decision rested with the insurer.

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The commission rejected these objections, noting that the bank branch and the accident fell within its jurisdiction. It also held that the complaint, filed on February 11 this year was within two years of the accident on May 6, 2024. It considered the material on record and said that the material established that the lorry driver had caused the accident and that the man had not contributed to it.

The commission allowed the complaint against the insurer and directed it to pay the woman Rs 10 lakh with 10 per cent annual interest from May 6, 2024, until realisation. It also awarded Rs 5,000 for deficiency in service, Rs 5,000 for mental agony and Rs 5,000 towards litigation costs. The insurer must comply within 45 days of receiving the order.

Takeaway

Keep your accidental insurance policy active, pay premiums on time and ensure your driving licence is valid. If an insurer rejects a claim, preserve the policy documents, premium receipts and accident records, and challenge the decision before the appropriate consumer commission if you believe the rejection is unjustified.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Karnataka: 1800-425-9339) or call the National Consumer Helpline at 1915 for assistance.

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