[blackwasp]

Punjab and Haryana high court has ruled that if a vehicle registered and insured in India meets with an accident in another country, the insurance company would be liable to pay the claim.

In 1995, 54 pilgrims from Kurukshetra lost their lives in an accident in Nepal when their bus fell into Trishuli Nadi.

Justice Sehrawat had observed that one can come across a thought that the Motor Vehicles Act extends only to ‘whole of India’ as per its Section 1, so it does not cover the area outside India.

“However, this rationale also does not exempt the insurance company from liability arising from the usage of the vehicle outside the geographical area of the Union of India. This section also implies that the Act would be applicable to all the citizens and subjects of India...,” court has held.

Earlier, the Motor Accident Claim Tribunal directed the owners to pay compensation of Rs 4.34 lakh to the relatives of one of the victims. The tribunal had absolved the insurance company on the grounds that the accident occurred in Nepal so the insurance company was not liable. The owners then appealed in the HC.

Any thoughts on this? Does this mean that cross border travelers need not take additional insurance? What is the practice in other countries? e.g. those in Europe where a lot people frequently cross countries for work, etc.

Source - ET Auto

[ghodlur]

Originally Posted by blackwasp

Any thoughts on this? Does this mean that cross border travelers need not take additional insurance? What is the practice in other countries? e.g. those in Europe where a lot people frequently cross countries for work, etc.

The Motor Insurance policy document does clearly mention the geographical boundaries when it comes to claims due to accident or loss of lives.

The Company shall not be liable under this Policy in respect of 1. any accidental loss or damage and/or liability caused sustained or incurred outside the geographical area;

The above rule is applicable to all section of the policy. However if one intends to travel cross border then there is a section within the policy which can be availed at payment of a small cost.

ENDORSEMENTS: SPECIAL CONDITIONS FOR YOUR INSURANCE
POLICY(Only endorsement mentioned in the schedule form part of the policy)
1. IMT.1. Extension of Geographical Area
In consideration of the payment of an additional premium of Rs_________it is hereby understood and agreed that notwithstanding anything contained in this Policy to the contrary the Geographical Area in this Policy shall from the __/__/___ to the __/ __/ ___(both days inclusive) be deemed to include *
It is further specifically understood and agreed that such geographical extension excludes cover for damage to the vehicle insured/ injury to its occupants/ third party liability in respect of the vehicle insured during sea voyage/ air passage for the purpose of ferrying the vehicle insured to the extended geographical area.
Subject otherwise to the terms exceptions conditions and limitations of this
Policy.

The * above is the mutually agreed geographical area.