Venturing out in Lockdown? You may face difficulty in motor insurance claim

Although partial movement of people has been allowed in COVID-19 free areas, the lockdown has not been withdrawn completely yet.

During the nationwide lockdown that was imposed to contain the spread of highly contagious Novel Coronavirus COVID-19, movement of people was made unauthorised, except for buying essential commodities within the locality. For people directly involved in the fight against COVID-19 and for those providing emergency services, movement was allowed on specific routes mostly with E-passes.

Although partial movement of people has been allowed in COVID-19 free areas, the lockdown has not been withdrawn completely yet. In the containment and red zones, lockdown is still firmly in place and unauthorised movement of people is still prohibited.

So, if a person not authorised to travel, ventures out during the lockdown and his/her vehicle meets with an accident, he/she may face difficulty in settling Motor Insurance claim, as insurance companies may treat the unauthorised movement as an unlawful activity.

In fact, one of the main conditions of Motor Insurance is that a claim would be rejected if you are doing unlawful activity.

So, if a vehicle meets with an accident during the lockdown, one of the documents the insurance company may seek is the permission to travel or E-pass for the driver. This document is also issued for a certain route and destination.

There are instances that, if the E-pass is not provided, or the vehicle gets deviated from the route, the insurance companies are rejecting the claim.

However, the date and time of the incident would determine if pass is required or not as whatever was permitted by the Ministry of Home Affair (MHA) Order on the date is legally tenable.

If a vehicle got damaged due to movement that was not permitted, the claim can be disputed.

“In this scenario, the insured has to mandatorily provide a proper justification for travel during lockdown, as few exceptions have already been given by the Indian Government amid nationwide Lockdown, e.g. medical emergency,” said Ankit Agarwal, MD, Alankit Ltd.

“Also since borders are open now and e-pass is not necessarily required during curfew hours, the insured can travel from one District/State to another District/State with a valid reason,” he added.

“The above listed scenario is to be considered for Private vehicles. Commercial vehicles are excluded,” Agarwal further said.

Ravichandran N, Chief Technical Officer, Kotak Mahindra General Insurance, however said, “We have been settling claims reported during the lockdown similar to how we have done prior to the lockdown. A claim is processed based on the information provided looking at practical aspects and facts of the claim.”

However, the Insurance Regulatory and Development Authority of India (IRDAI) is not amused with the fact that the insurance companies are asking for E-passes to process the claims and for seeking clarifications from the insureds’ in case of any delay in submitting the additional documents.

During a video conference with the IRDAI and the Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA), the General Insurance Council has assured that actions will be taken against the insurance companies if they harass the insureds.