Insurance firm’s appeal against tribunal order dismissed

The risks of the occupants carried in the vehicle are automatically covered Insurance companies will consider publishing instructions in the language of the State: court Under a package policy or a comprehensive policy of motor insurance, gratuitous passengers travelling in a private car or pillion riders carried on two-wheelers are automatically covered, the Madras High Court has ruled. In its judgment dismissing an appeal filed by an insurance company, a Division Bench comprising Justices Prabha Sridevan and K.K.Sasidharan said that except occupants who were carried for hire and reward, and in the case of death of and injury to a person in the course of employment of such person by the insured to the extent necessary to meet the requirements of Workmen’s Compensation Act, the insurer should indemnify the insured against all sums he is legally liable to pay. The appeal by Royal Sundaram Alliance Insurance Co.Ltd, Coimbatore, challenged an order of March 2008 of the Motor Accidents Claims Tribunal, Fast Track Court No.2, Coimbatore. The deceased was a passenger in an insured vehicle. Due to the negligence of the driver, who was also the owner of the vehicle, an accident occurred in July 2004 resulting in the death of the driver and three passengers. While the driver and two persons died in hospital, one passenger died on the spot. The claimants, A.Meenakshi and four others, were the legal heirs of the passenger who died on the spot. The tribunal awarded Rs.19.10 lakh. Hence, the present appeal by the insurance company. The Bench said the present policy and the terms contained therein were in accordance with the Standard Forms and therefore, the risks of the occupants carried in the motor vehicle so long as they were not carried for hire or reward were automatically covered when a comprehensive policy was taken. A comprehensive policy covered the liability of pillion riders. It was clear from the law itself, the words of the policy and a Supreme Court decision that a comprehensive policy covered the risk of gratuitous passenger to the extent of the liability incurred. The Bench said the Tariff Advisory Committee explicitly came out with a clarificatory circular in 1978. “We cannot forget that the words used are ‘third party’ and ‘comprehensive,’ so we cannot deny this relief to the third party occupant in a car covered by a comprehensive policy.” It said the policy holder should know as to whose risk was being covered. It should be brought to his knowledge that even his family members would be gratuitous passengers travelling in his car. “ We also hope that in addition to English and Hindi, the insurance companies, both public sector as well as private sector undertakings, would consider publishing the instructions and guidelines in the language of the State.” Terms of contract So both parties should understand exactly the terms of the contract and for exactly what extent and what type of coverage the policy holder was paying premium. The Bench decided the issue relating to coverage of risk to a gratuitous passenger travelling in a private car in favour of the third party and against the insurer.

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