This week, I would like to write about two orders of the apex consumer court pertaining to accident insurance policies. While in one, the apex consumer court held that death from cold wave constitutes an accidental death, in the other, it made it clear that while interpreting the terms and conditions of an insurance contract, insurance companies have to keep in mind the ground realities. Both are extremely important orders.

The first case pertains to the death of a 37-year-old man, Parshuram Singh, from a cold wave in Bihar and the repudiation of the claim of his wife by the insurance company on the ground that the Janata Accident Insurance policy taken by him pertained only to accidental deaths. Holding that death from cold wave was also accidental death, the apex consumer court pointed out that the word accident meant something unexpected, an untoward event or unlooked for mishap. But the test of what is unexpected is whether an ordinary reasonable man could have expected such an occurrence.

A cold wave, said the apex consumer court, is an untoward event which is not expected or designed, and an ordinary man could not expect the occurrence. In the present case, the cold wave was sudden and due to that a number of persons including Singh suffered massive heart attack and died.

Besides asking the insurance company to pay the insured amount, the apex consumer court in this case asked the intermediary through whom the policy had been bought by Singh, to pay Rs 10,000 as costs, thereby sending out a clear signal to all insurance agents and intermediaries that failure to provide the service expected of them constituted negligence ... (Rita Devi vs National Insurance RP No. 973 of 2007)

The second case pertains to death by snake bite. Here, the police officer, the village administrative officer and a local doctor certified that the insured had died of snake bite. Yet, the insurance company was unwilling to pay the insured amount on the ground that a post mortem was not conducted, as required under the terms of the policy.

Dismissing this contention, the apex consumer court pointed out that when a person dies of snake bite in a small village, it would be impractical to expect the family to take the body to a far away civil hospital for a post mortem. (United India Insurance Company vs Pallamreddy Aruna, RP No. 3329 of 2007). The apex consumer court has often told insurance companies to be practical in their approach to claims settlement. This is yet another order in that direction.