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Pushpa Girimaji warns against ambiguities in insurance policies AS the crime graph shoots up, people are reaching for insurance policies to protect their valuables. However, before opting for any insurance policy one needs to be aware of the terms of the policy as any breach in the conditions could give the insurer an opportunity to repudiate the claim. One such condition is that if you change your residence or move the insured goods, you must intimate the insurance company and get the change of location endorsed and signed a company official. Policyholders have failed to get the insured money because they either did not read or follow this condition. When despite following the policy conditions, the insurer repudiates the claim on some flimsy pretext, you have the consumer courts to go to or may be the insurance ombudsman to resolve your dispute. Take the case of the National Insurance Company Vs Kashmir Handicrafts Emporium (RP No 1132 of 2003) decided by the National Consumer Disputes Redressal Commission in August this year. The complaint said three persons who came to the shop in Mangalore took away at knifepoint a box containing gold and silver jewellery. However, the insurance company was unwilling to indemnify the loss on the ground that there was no ‘burglary’ as stipulated in the policy condition, as there was no forcible and violent entry and the insurance cover was for ‘handicraft items’ and this did not cover jewellery. The National Commission dismissed both the contentions. Referring to Section II of the policy that said it covered loss or damage to insured items by theft involving entry into or exit from the insured premises by forcible and violent means or following assault or violence or threat thereof to the insured or any employee of the insured or member of the insured’s family. Pointing out that stealing goods at knifepoint was indeed covered by the policy, the commission said the insurer could not repudiate the claim on this score. It also dismissed the contention of the insurer that only handicraft items were insured. Quoting the dictionary meaning of ‘handicraft’, the commission pointed out that the jewellery were handmade and, therefore, came under the definition of handicraft items. Since the policy document specifically mentioned that it covered all items in the shop premises against burglary and housebreaking, there was no reason for the insurance company to repudiate the claim, the apex consumer court said. Another important judgement on the subject was delivered in 1996 by the National Commission which enlarged the meaning of "violent and forcible entry". In New India Assurance Company Vs Sakar Iron Industries case, the insurance company repudiated the claim on the ground that neither the lock nor the door was broken and there were no signs of breaking into the premises. The insurer was liable to pay only if the insured property was lost by theft following forcible and violent entry into the premises by persons committing such theft, the insurer argued. The commission said the "violent entry" may not include a theft where the thief only had to turn the handle and walk in, but in this case, the report of the surveyor said the culprit might have entered the casting department of the factory through the small open gap above the locked gate. It was thus an unlawful, unnatural entry requiring exercise of force to gain entry. |
