Team-BHP - Vehicle theft due to owner's negligence = no insurance claim

A vehicle's insurance policy is a safeguard that comes into action after an accident / incident occurs. However, a trial court has ruled that if a vehicle is damaged or stolen as a result of the owner's negligence, the insurance company is not liable to pay any compensation.

The scenario has come to light after the court denied an insurance claim made by Jamun Pandey, whose truck was stolen after his driver (Ram Nandan), forgot the keys in the vehicle and left it unattended for over an hour in an unauthorized area, leading to its theft.

According to additional district judge Kamini Lau, the vehicle was stolen due to the negligence of the driver of the plaintiff and that the plaintiff was guilty of breaching the terms and conditions of the insurance policy. The court was hearing a suit filed by Pandey, who had claimed Rs. 6.2 lakh from SBI General Insurance Company. The insurance policy was valid from December 14, 2012 to December 13, 2013, with Pandey's truck reported missing on October 25, 2013, from a spot near Pratap Nagar Metro station. In his plaint, Pandey stated that he was entitled to get the amount as per his policy. However, the company strongly opposed his claim, stating that the vehicle's theft was a result of owner's gross negligence; a defense that was subsequently upheld.

The case will prove to be an eye opener for existing and new car owners, who often do not pay attention to the fine print. The rule also exists to protect insurance providers from fraud, as sometimes, owners stand to get more from an insurance claim than they would from actually selling the vehicle. Suffices to say that the little "*" in a document as important as your car's insurance policy is not something you'd want to ignore.

Source: ET Auto

Quote:

Originally Posted by ajmat (Post 3848510)

Abroad, in the case of car theft, the insurers ask for the car keys unless they were stolen from the house or it was a clear case of car jacking. if the keys were found to have been left in the ignition. YOu are toast!

Yes, definitely. To be honest, you can see/understand why they would refuse to pay up.

Actually, a lot of cars get stolen in Europe right in front of the house of the owner. They break into your house, grab your car keys and steal your car.

Some people leave their (car) keys on a key rack, or little coffee table near the front door and thieves managed to get them through the letterbox with a long stick!

Some insurance companies have refused pay out in such cases. I'm not sure if they were succesful in denying those claims. But fact is that car insurances do warn car owners to be very careful with their car keys and not leave them anywhere where they could be taken easily. (And that might include your own home!)

http://www.theaa.com/motoring_advice...-increase.html

Jeroen

Quote:

Originally Posted by Tushar (Post 3848495)

The scenario has come to light after the court denied an insurance claim made by Jamun Pandey, whose truck was stolen after his driver (Ram Nandan), forgot the keys in the vehicle and left it unattended for over an hour in an unauthorized area, leading to its theft.

When I read only the title of the thread, my knee-jerk reaction was that this was a new way of denying claims by using absurd reasons. But reading the subsequent detail, I can understand why the claim has been denied, and I support it. I'm curious, however - in this case (or in general) what is an "unauthorized" area? I think the bit about leaving the keys in the vehicle alone suffices, no need to add in reasons like leaving it unattended, and place of parking.

That said, I'm now thinking - insurance fraud: do we know the age of the vehicle in question, and when it was due for re-registration?

Quote:

Originally Posted by Jeroen (Post 3848569)

Actually, a lot of cars get stolen in Europe right in front of the house of the owner. They break into your house, grab your car keys and steal your car. Some people leave their (car) keys on a key rack, or little coffee table near the front door and thieves managed to get them through the letterbox with a long stick!

OK, you've now got me worried. Time to move where I keep my car keys. :)

Quote:

Originally Posted by Jeroen (Post 3848569)

But fact is that car insurances do warn car owners to be very careful with their car keys and not leave them anywhere where they could be taken easily.

This now brings to mind places where we hand over the keys with the car - valet parking stations, car service centres, detailing centres (such as, but not limited to, 3M and others).

In the case of service centres and detailing centres, the car should technically be covered by the 'contents' portion of the 'buildings and contents' insurance cover, even if they wave a piece of paper that has the (invalid) disclaimer 'Vehicles are parked/driven at the owner's risk'.
However, in the case of valet parking where the car is not parked on company property, but is instead parked on the roadside, then I wonder how things will play out. For example, if you visit almost any eatery in Bangalore's Koramangala/Indira Nagar, the parking attendant will squirrel away your car in a convenient nearby side-street.

EDIT: Damn, beaten to it by invidious! That's what I get for composing such lengthy replies!

I understand the theft because of negligence part, but this rule also says that insurance company is not liable to pay if any damage happens because of owner's negligence, won't this clause make a significant number of accidents/damage claims null & void?

Few examples

1. if it is a hit & run case and insurance company decides to blame you for the accident, how do you prove that it was not your fault(Assuming you don't have a camera installed)?

2. If you lose control of your vehicle because of Tyre burst and end up with a major damage, the insurance company have an option to treat the Tyre burst as a negligence on owner's part (Inappropriate air pressure, overloaded vehicle, over-speeding and what not)

Not sure if I am overreacting.

On the first reading, the judgment looks to be fine. But when the forum discussions are taken into account, it seems that someone with legal understanding should explain the repercussions of such judgment in longer run and that how this can be used against customers as a precedence for future claims.

Insurance is purchased for peace of mind and it should come with minimum number of riders.

I have seen this happening in case of health insurance claims denied by TPAs but for the patient, denial or approval by the insurance company, treatment is a must. The rider should only be limited to cosmetic surgeries and may be on room rents (subjected to what is available in a particular hospital).

In this case again, if the companies start inserting additional riders, then there is no looking back. What I have always seen is that the insurance done at corporate level where a large number of cars are insured through a single agency, the claims are settled much more amicably instead of individual insurance that we generally purchase for automobiles.

Any thoughts?

Quote:

Originally Posted by Tushar (Post 3848495)

Quote:

Originally Posted by Diesel_convert (Post 3848695)

This sets bad precedent, claiming insurance should not be a fault finding mission. You could also be denied a claim for negligent driving causing a crash, I wonder where they will draw the line. The legal experts on the forum should look at the judgement in detail, after all we only have a journalists view as of now.

Precisely!

What worries me about this judgement is who and how negligence will be defined and interpreted.

On one hand, there are people carrying out insurance fraud and on the other, insurance companies look for ways to cut down settlement.

Any incident which requires insurance to be claimed (except say, a natural calamity) will always be because some mistake (=negligence) was committed, by someone. So, what's the point of insurance then?

This doesn't quite set a good precedent.

While 'negligence' may be a broad term, I'm completely on the insurance company's side here. If you are careless enough to leave your keys behind in the vehicle, you are practically spoon-feeding the thief. Why should the insurance company pay for such gross negligence?

In some ways, it's similar to drunk driving. If you are careless enough to drive drunk and get into a crash, the insurance company will not pay for repairs.

I remember reading about a case where the car was overloaded with two more passengers than what it was rated for. Car gets into an accident, insurance claim rejected.

All insurance is to cover the financial implications of the realization of a risk. The definition of the risk, and pricing of that risk, is a subject all by itself.

In this case, the insurance cover for theft covers the risk of theft of the motor vehicle, and the risk will be defined as someone stealing the vehicle after the owner/driver takes all reasonable precautions. What constitutes "reasonable precautions" is highly subjective, and I think the insurance industry needs to set a common standard here.

A reasonable precaution in this case will be that the person in charge of the vehicle locks it. Not doing so increases the risk beyond the insurance company's definition.

Of course, for an additional amount, you can buy cover for the stupidity of leaving the vehicle unattended with keys in the ignition stupid:

I'd say it is indeed a good move. Imparts a sense of responsibility which is sometimes lacking these days.

Quote:

Originally Posted by invidious (Post 3848591)

So, what happens if a valet steals your car? In cities like Bombay you often give your vehicle to the valet because of dearth of parking. If either the valet or someone associated with the valet firm steals your car - is it still negligence?

I believe you can easily prove that you were at the hotel. Nowadays, a valet parking hotel should have a CCTV too. I'm sure there will be other ways to prove it.

The judgment IMO sheds light to irresponsibility.