If you have ever read the agreement for insurance, there will be a number of items in fine print, including exceptions. So, for example, if you are taking insurance for your car or other vehicle, the Insurance company would have added exceptions to the order of driving the vehicle illegally, or using it for racing, or for a unqualified person to be driving the vehicle. Such clauses could also mean that if you need a certificate from the transport department for driving the vehicle, and don’t have the certificate, an insurance company could claim that you are violating the law while using the vehicle, and hence there is no ground for insurance. This particular attempt to use the law violation to deny the claim has been struck down by the Chennai Consumer Commission as being used to deny justice to the consumer.
The National Consumer Commission has held that insurance companies, if the terms of the policy were not breached, cannot refuse to entertain claims on the pretext that the insured violated some other laws or conditions.
It was deciding a petition filed against the Chennai State Consumer Commission verdict, justifying the repudiation of an accident claim by the United India Insurance Company Ltd on the ground that the car, at the time of accident, was being plied without the ‘fitness certificate’ as required under the Motor Vehicle Act.