Motorists venturing out during the lockdown, imposed due to the COVID-19 pandemic, could face some issues in case their vehicle meets with an accident. Motor Insurance Companies could reject their claim altogether as one of the main conditions of Motor Insurance is that the vehicle should not be involved any illegal activity.
The entire country is in lockdown mode 4.0 in a bid to contain the spread of COVID-19. Though partial movement has been permitted and persons are allowed to travel in green and orange zone, this is only relaxed for purchase of essential commodities. There are also several frontline workers who are allowed travel on specific routes. E-Passes are issued for this purpose. However, in red zones, no movement of people is permitted.
Under these conditions, if any person were to take out their vehicle and if by chance meet with an accident, they could find their Motor Insurance claim rejected. The insurance company would treat this as unlawful activity and turn down the claim altogether. The insurance company could ask for proof of permission to travel or an E-Pass for the driver. If the pass is issued for a certain route, and the accident occurred on that route itself, then there could be possibility of the insurance company honouring the claim.
Accident during lockdown.
If by chance, the driver does not produce an E-Pass or if he / she had ventured out from that particular route when the accident occurred, then the claim could be rejected outright. In this case, the insured would have to submit some proof of reason for travel which could be due to a medical or some other emergency. Despite these concerns, there have been some insurance companies who have settled claims during the lockdown period.
However, Insurance Regulatory and Development Authority of India (IRDAI) feels that it is not proper procedure to ask for E-Passes and seek added information from the insured. In a meeting held between IRDAI, Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA) and the General Insurance Council, it was decided that action would be taken against these insurance companies for causing unnecessary stress to the insured.
With the lockdown being extended, the insured are also seeking refund or extension of their insurance policies duration. They have been unable to use their vehicles for nearly two months since the lockdown was initially announced on March 24. The insurers assert that they have been charged for the lockdown period while at the same time there have been hardly any claims.
Therefore they have appealed to IRDAI to issue orders to insurance companies to extend the duration of the claim period which would be equal to the lock down period. A recent survey revealed that in the past two months, insurers have reported savings to the tune of Rs.2,200 crores has claims have been very low.
Source: Bike - rushlane.com
