[Aditya]

In a significant verdict, the Bombay High Court has ruled that a tyre burst is not an act of God but an act of human negligence, and directed an insurance company to pay compensation.

The verdict came in a case of a car accident in which a man was killed after the car he was traveling in toppled following a tyre burst. However, the New India Assurance Co Ltd. refused to pay compensation, saying that the accident was an act of God.

The Motor Accident Claims Tribunal, Pune, had directed the insurance company to pay nearly Rs 1.25 crore with 9% interest to the family of Makarand Patwardhan.

However, the insurance company challenged the June 7, 2016 order of the tribunal before the high court, saying that the tribunal awarded exorbitant and excessive compensation.

However, Justice S G Dige of Bombay High Court noted that the dictionary meaning of 'act of God' is 'an instance of uncontrollable natural forces in operation.

Source: The Economic Times

[HighRevving]

Makes you bring up a lot of questions - if tyre burst is attributable to the owner/driver, how do you make sure they don't happen from an insurer's perspective?

• Make it compulsory to install a TPMS system and monitor it remotely - there are already talks of GPS devices becoming mandatory to observe driver speed and behaviour; perhaps, TPMS will be integrated with it?
• If the tyre condition is bad, say tread levels being dangerously low or a puncture being fixed on a sidewall etc - could they be used to void insurance?
• Even if they cover some of these points, a (bad pothole + high speed) impact can result in tyre damage, not necessarily tyre burst. What do we do about the incidents which are beyond the control of the user?

Tyres are some of the most neglected parts by cabbies and people who listen to the shop guys who say "these will run another 500 KMs easily". Maintaining tyre health and pressure are critical safety points and I am not sure how this will be enforced in the insurance contract going forward.

[TusharK]

The Bombay High Court has directed an insurance company to pay compensation to a person killed after his vehicle toppled due to a tyre burst.



Makarand Patwardhan was travelling from Pune to Mumbai with two of his colleagues on October 25, 2010. The owner of the car was driving in a rash and negligent manner, when the rear tyre burst and the car fell into a deep ditch, killing Patwardhan on the spot.

The Motor Accident Claims Tribunal, Pune, had directed the insurance company to pay Rs 1.25 crore with 9% interest to the victim’s family. However, New India Assurance refused to pay the compensation, saying that the tyre burst incident was an act of God and not the result of the driver’s negligence.

The Bombay High Court has now rejected the argument put forth by the insurance company. The court stated that the meaning of ‘act of God’ is an instance of uncontrollable natural forces in operation. The court ruling also mentioned that a tyre burst cannot be termed as 'an act of God' and that it was an act of human negligence.

Source: Economic Times

Link to Team-BHP News

[2000rpm]

However, the New India Assurance Co Ltd. refused to pay compensation, saying that the accident was an act of God.


Naming the Insurance company here (from the news article), so that we know which ones to avoid.


How can a tyre burst be termed as act of god!

More than 10 years for justice, horrible state of affairs in the Indian judiciary system.

[Cresterk]

I thought insurance claims could be rejected due to rash or negligent driving?

[AutoDowntowner]

It took more than 12 years. Late Mr. Patwardhan's family must have gone thru so much pain. This is the very sad state of our system.
Recently one of my close friend who is into transport business & owns around 8-10 vehicles had bad experience with the same insurance company. One of his vehicle met an accident & he got call from his driver & I was present with my friend, I heard their discussion about accident. I took him to a police friend immediately to have some guidance & next day he approached the insurance company.
Later his claim was rejected saying "the accident have taken place long ago & you are submitting the claim now. So we can not accept it".
This is so ridiculous.
My friend since 15 years was a loyal customer to this company with many vehicles insured, still the company did not trust him.
Finally he decided never to get insured from this company.

[kovilkalai]

The whole point of insurance is to cover unexpected accidents. If you can cover flood damage why not damage arising out of a burst tyre?

We need punitive damages in India. We need bigger penalties than 9% penal interest.

[Jeroen]

Originally Posted by kovilkalai

We need punitive damages in India. We need bigger penalties than 9% penal interest.

This is probably off topic, but why would you like to see punitive damages?

Jeroen

[SedateGuy]

Originally Posted by Jeroen

This is probably off topic, but why would you like to see punitive damages?

Jeroen

To stop companies from litigating even when they have no foundation. ATM it is better for them to litigate, it dissuades customers from going to court. On another thread on this forum we have a lawyer who would rather suffer the loss of a lemon than litigate. I think that alone sums up the state of affairs.

[tilt]

Originally Posted by Cresterk

I thought insurance claims could be rejected due to rash or negligent driving?

Nope. Racing, taking part in competitions etc. are reasons for rejection, but not rash and negligent driving.

In my opinion Rash and Negligent Driving cannot be a reason for rejecting a claim because it is practically impossible to conclusively and unequivocally prove (or disprove) rash and negligent driving. This at best can only be a subjective opinion (or evaluation) and not an objectively determinable one.

Please do not counter saying "breaking the law" can be an objective measure of rash and negligent driving because there are a lot of stupid laws that each one of us routinely breaks without even being aware of it.

Cheers

[Jeroen]

Originally Posted by SedateGuy

To stop companies from litigating even when they have no foundation. ATM it is better for them to litigate, it dissuades customers from going to court. On another thread on this forum we have a lawyer who would rather suffer the loss of a lemon than litigate. I think that alone sums up the state of affairs.

Remember punitive damages were first introduced in the USA. Not exactly a litigating free country. The most litigious country in the world, surprise is Germany! And it’s legal system does not have punitive damages!

The effects of punitive damage in terms of deterrent have never been proven and are to this date being debated. This is aside the more moral aspect of getting money whilst having no cost.

The Dutch legal system has no punitive damages either. One effect is that you can only sue for real cost incurred or to be incurred. Which keeps the awards realistic and relatively low.

Back on topic now!

Jeroen

[kovilkalai]

Originally Posted by Jeroen

This is probably off topic, but why would you like to see punitive damages?

Jeroen

In India, there are numerous examples of clearly open and shut cases involving consumer rights that take years to get sorted. In most of these cases the court sides with the plaintiff and awards compensation that is the exact value of the loss incurred along with 9% interest. They also include a nominal compensation for legal expenses which is always way below what it actually costs to bring these cases.

My point is simply that when companies show an egregious deficiency in service such as:
1. Selling a pre-facelift vehicle to a guy who pays the higher price for a post-facelift vehicle
2. Open and shut claims being denied,

there has to be an incentive for the aggrieved parties to bring suit and tolerate the years of delays in Indian courts as well as a disincentive for companies to engage in poor business practices.

For instance, let us take the first example: a dealership that handed over the wrong car to the customer intentionally. They must be required to refund the value of the car with interest, cough up actual court and lawyer costs and pay a penalty to the plaintiff that is 3X the value of the car for the aggravation caused. I am not for excessive damages like what happens in the US, but some damages are needed.

If a reasonable judge can infer that there was some ill intent involved (like passing off an old car to an unsuspecting customer), then damages are warranted. The exploding tyre thing is just nuts. There are any number of reasons why a tyre can shred, especially on Indian roads. I have read insurance contracts (because I had to file a claim recently) and there is absolutely no language in there that could give the insurer wiggle room to claim what they claimed. It is patently silly