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IF despite the growing crime rate, insurance against burglary and theft is still not popular among consumers, blame the insurance companies and the unfair terms and conditions that they impose on policy holders. Take the case of Orient Treasures Vs United India Insurance that came up before the apex consumer court recently. Despite an insurance policy, the shop selling jewellery had to wage a legal battle for almost a decade to get its money. Fortunately, the legal saga ended on a happy note—-the apex consume court directed the insurance company to make good the loss suffered by the policy holder on June 2, 1995.It directed the company to pay Rs 36,10,211 being the estimated loss , along with 10 per cent interest calculated from December 3, 1995, till the date of payment. It also asked the insurance company to pay costs assessed at Rs 50,000 to the insured. (OP no 375 of 1997, decided on March 19, 2007) . Even though the burglary was confirmed by the police — the burglars had broken open the locks of the jewellery shop on June 2, 1995, and decamped with the jewellery, and the loss was assessed by the surveyor — the insurer was unwilling to indemnify it. Quoting breach of warranty, the insurance company said the jeweller was expected to keep the jewellery locked in "burglar proof safe" at night and at all times out of business hours. Dismissing this as a vague or an ambiguous condition, the apex consumer court said such a condition should be construed or interpreted against the insurer and in favour of the policy holder. It was reasonable, said the apex consumer court, for a burglar insurance policy to impose a duty on the policy holder to take due precautions for ensuring the safety of the insured property. But to go beyond that and say that the goods (in this case jewellery) should be kept in "burglar-proof" safe was unreasonable . Saying that it was difficult to find a burglar-proof safe, the consumer court asked the insurer to make good the loss. This is not the first time that consumer courts have come to the rescue of consumers vis-`E0-vis policies pertaining to theft or burglary. In the case of National Insurance Company Vs Kashmir Handicrafts Emporium (RP No 1132 of 2003), where three people had entered the insured shop and taken away at gun point a box containing gold and silver jewellery worth Rs 4.67 lakh, the insurance company had argued that that there was no ‘burglary’ as stipulated in the policy condition as there was no forcible and violent entry or violence to the insured. The apex consumer court had dismissed this contention. Similarly, in the case of New India Assurance Company vs Sakar Iron Industries, the insurance company had repudiated the claim on the ground that there were no signs of breaking into the premises and that neither the door nor the lock was broken. The consumer courts in this case dismissed such a contention of the insurance company. Referring to the dictionary meaning of the word "violent", the apex consumer court said "it was characterised by forcible, vehement, rapid and often sudden movement, requiring exhibiting of a powerful voluntary exertion of muscular strength, violent efforts". Pointing out that in this case the culprit had entered the casting department of the factory through a small open gap above the locked gate, the court said this was an unlawful, unnatural entry requiring exercise of great physical force to push through the gap above the gate. The insurance company was, therefore,, liable to pay Rs 2,29,991, along with interest, the court said. Mr Suresh Singh Chauhan was, however, not so lucky. On October 16, 1998, household articles worth Rs 27,400 were stolen from his house but the insurance company would not make good the loss. The reason cited was the exclusion clause which said that the company would not be liable if any employee of the insured was involved in the burglary or housebreaking.. Now in this case, the domestic help, along with her paramour were responsible for the theft. Besides, there was no housebreaking or forcible entry into the house to commit theft. So the insurance company said it was not bound to pay and the apex consumer court agreed with this decision. (RP no 2455 of 2002). So it’s time we had insurance policies that protect consumers (and not insurers) against theft and loss of valuables. It would be in the interest of consumers if the insurance regulator were to constitute a committee consisting of consumers, insurance companies and the police to immediately look into this issue and come up with policies that are really fair to consumers. In fact, even the consumer courts have been asking the insurance companies to modify their terms and conditions pertaining to theft and burglary insurance.
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