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Read the fineprint before buying an insurance policy, cautions Pushpa Girimaji PLANNING to buy an insurance policy to protect your household goods and valuables against burglary? Before buying an insurance policy, look at the terms and conditions carefully. In many cases of robbery these days, household helps are involved either directly or indirectly. And in such cases, despite having a valid policy, the insurance company may not indemnify your loss at all. This is what happened in Surender Singh Chauhan’s case. On October 16, 1998, valuables worth Rs 27,400 went missing from his house following which he lodged a complaint with the police. Investigations showed that with the help of the housemaid, her paramour had stolen the goods. Since Chauhan had insured all his household articles, including jewellery and other valuables, against the risk of theft, he and wrote to the insurance company, asking them to indemnify the loss suffered by him. The insurance company appointed a surveyor, assessed the loss, but subsequently repudiated the claim, since the theft had been committed by an "employee" and this came under the exclusion clause of the policy. Even though the policy clearly said the company would indemnify the insured in respect of loss or damage to the contents whilst contained in the insured premises by burglary, housebreaking, including larceny and theft", under "Special Exceptions" the policy stated that "The company shall not be liable in respect of loss of damage by burglary and/or housebreaking when any employee of the insured or member of the insured’s family is concerned as principal or accessory". When the consumer courts at the district and the state level dismissed his petition, Chauhan filed a revision petition before the apex consumer court. The main issue before the National Consumer Disputes Redressal Commission was whether the domestic help working in house came under the category or definition of "employee and employer" or "master and servant" or just a "part-time worker"? The complainant argued that the relationship between him and the household maid could be termed as that of "master and servant" and not that of an "employer-employee". He also contended that the maid and her paramour were not living in the house where the theft took place. The insurance company argued that according to judicial decisions, "employee" means any person who was employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages had been fixed. He also submitted that in legal parlance, the word "servant" denotes a person in service of another, under any contract of hire, express or implied, oral or written, bringing into existence in favour of the employer, the right to supervise and control the work done by the servant, against the payment of salary or wages. The apex consumer court too held that the insurance company was right in repudiating the claim. Said the commission: "In our considered view, Section II, "Special Exceptions" in Clause (i) is squarely applicable in the present case as the servant maid is an employee at the relevant time". The commission further said, "The alleged theft took place without any house breaking or burglary and the investigation also clearly held that with the help of the maid servant, her paramour had done the theft". (Surender Singh Chauhan Vs United India Insurance Company, RP No 2455 of 2002). So whenever you opt for a policy to protect your household goods and valuables, look at the terms and conditions carefully and see whether the policy gives you a cover against theft by servants too. Then there are also certain policy conditions which you must know. For example, if you change
residence or move the insured goods, you must intimate the insurance
company of it and get an endorsement of the change of location duly
signed by an official of the company. Look at the policy conditions
carefully, clear all your doubts and make sure that the policy is of
relevance to you. |
