Insurers Cannot Rely On Fine Print To Evade Liability: NCDRC

Brief Facts of the Case

The complainant was provided a travel insurance cover by ICICI Lombard General Insurance/insurer under its Policy Platinum S for travel to Schengen countries, for her family and her two children aged 11 and 14 years. The complainant and her family were visiting Jungfraujoch, Switzerland when the complainant slipped and fell with her children on snow and she injured her left femur which needed her to be airlifted to the hospital and had to undergo surgery; she incurred Rs 33,16,171.70 for medical bills. After reporting the incident to the insurer and filing the claim, the insurer accepted the claim but later rejected it arguing that the accident arose out of riding on a sleigh/bob which was prohibited under the policy terms and conditions. Even when she clarified that the activity was safe and involved her children, the claim was denied, as was Rs 2,37,667.50 on other expenses. The complainant subsequently approached the State Commission of Maharashtra, which partly allowed the complaint, leading to the current appeal by the insurer for modification or reversal of the order.

Contentions of the Insurer

The insurer argued that the order passed by the State Commission was erroneous and the exclusion clause of the policy was not considered. It argued that the Commission formulated an issue as to whether the micro letters of the policy were conveyed to the complainant, but there was no substance to this allegation. The insurer further argued that the complainant never disputed the terms and conditions at any one time and therefore the question asked by the Commission was improper. Furthermore, it pointed out that the Commission overlooked some pertinent matters, such as the complainant giving two versions of the accident, making the cause of the injury unkown. The insurer argued that by participating in the activity of riding snow scooters or sledge the complainant knew that the activity was risky, and thus any harm that the complainant suffered was at his own risk.

Observations by the National Commission

The National Commission observed that the question for consideration was whether the State Commission was wrong in deciding the complaint against the insurer's refusal of the claim under the policy. The impugned order considered whether the terms of the policy were properly communicated to the complainant, and the insurer asserted that this question was inapposite. However, the Commission noted that the insurer could not dispute the finding of liability due to the alleged lack of disclosure of the policy's fine print, as established in Oriental Insurance Co Ltd. Vs. Sony Cheriyan AIR 1999 and United India Insurance Co. Ltd. vs M/s Harchand RaiChandan Lal. The crucial issue was whether the cause of the accident was proved as the insurer had declared different stories about the event. The Commission highlighted that the State Commission did not find out whether the accident occurred out of a hazardous activity which is not covered by the policy or out of an activity that qualifies for cover. Hence, if this fundamental issue was not addressed, the finding of deficiency in service was held to be unsustainable. The order was set aside and the matter was referred back to the State Commission to hear both the parties on the question whether the activity resulting in the hospitalization of the complainant falls within the meaning of hazardous activity and to dispose of the matter as quickly as possible.

Case Title: ICICI Lombard General Insurance Co. Ltd. Vs. Rupali Inamdar

Case Number: F.A. No. 1857/2019

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