Insurance company required to pay out 6 lakh to doctor’s son

03 August 2013 - Which Way To Pay

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If terms of an insurance policy are vague, benefits should go to the insurance policy holder

A consumer forum has held that if the terms and conditions of an insurance policy are vague, benefits should be received by the insurance policy holder. Following the accidental death of a South Mumbai doctor, National Insurance Co Ltd denied the claim stating that it was not accidental and was caused by disease-related giddiness. National Insurance Co Ltd have been forced to pay the victims son, Dr Sunil Vakil the insured sum plus Rs23,000 as compensation for an unfair trade practice and towards the cost of the complaint.

What happens if insurance policy terms are vague?

The national commission ruling said that “it is settled law that when two reasonable interpretations of the terms of the policy are possible, the interpretation which favours the insured is to be accepted and not the interpretation which favours the insurance. Further, the terms of the insurance policy are drafted one-sided by the insurance company. Therefore, in case the terms of the policy are vague, benefits should be given to the insured and not to the insurer”.

Things to consider when choosing your insurance policies

When researching the various insurance policies that are available it is important that you ensure that they are suitable for you and that you are aware of any exclusions that might apply to the policy. All insurance policies have different terms so you must ensure you don’t’ get caught out.

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