High Court directs IRDS to provide proposal facility in motor insurance policy

In a judgement, which would help provide speedy and enhanced compensation to motor vehicle owners killed in a road accident, the Lucknow bench of the Allahabad High Court has directed the IRDA to provide nomination facility in all motor policies.

A public interest litigation (PIL) was filed in Lucknow bench of Allahabad High Court, challenging the non availability of nomination facility in the personal accident policy which is sold compulsorily along with motor insurance policy to vehicle owners.

Advocate Dhruv Kumar in his petition said that July 2002, an additional premium of Rs 50 and Rs 100 is being charged under the Indian Motor Tariff from owners of the two wheeler and four wheelers for compulsory personal accident insurance for the sum insured of Rs 1 lac and Rs 2 lacs, respectively.

The policy covers accidental death of owner of the vehicle while driving or even traveling in the said vehicle. Click to apply Car Insurance

The petitioner said that since facility of nomination is not available on the policy document, the owner of the vehicle remains unaware of the accidental cover and even those who know their beneficiary has to obtain succession certificate from the court to get their claim which is not only expensive but also time consuming.

The Insurance Regulation and Development Authority (IRDA) opposed the petition on the ground that Sec 39 of the Insurance Act mandates nomination facility in only life policies and that there is no reference to personal accident policies.

Petitioner Dhruv Kumar submitted that a personal accident policy, similar to a life policy, also insures against the death of policyholders and hence, it too requires nomination facility.

The bench comprising of Chief Justice FI Rebello and Justice DK Arora did not appreciate that IRDA was not providing the nomination facility in motor policies and directed the IRDA to enforce the mandated regulation on insurance companies.