Insurance Claim Denied Due to Fake License? Know Your Verification Duty.
03 June 2024
Consumer Protection Act >> Consumer Rights
A recent decision by the National Consumer Commission (NCDRC) has shed light on the extent of an insured's responsibility regarding driver license verification in vehicle insurance claims. The case involved a truck accident where the driver's license was later found to be fake. The insurance company denied the claim based on this revelation, but the NCDRC ruled in favor of the insured.
The insured's truck was involved in an accident while being driven by a licensed driver. Upon filing a claim with the insurance company, it was denied due to the driver possessing a fake license. The insured challenged this decision, arguing they were unaware of the forgery and had exercised due diligence by verifying the license during employment. Both the District Forum and the State Commission ruled in favor of the insured. They placed the onus on the insurance company to prove the insured's negligence in verifying the license's authenticity. The insurance company appealed to the NCDRC, arguing that the policy terms absolve them of liability in cases of driving without a valid license.
Key Legal Considerations:
The NCDRC highlighted established legal principles:
- Insurance companies can deny claims for driving without a valid license.
- However, the burden of proof lies with the insurance company to demonstrate the insured's lack of reasonable care regarding license verification.
- The insured's responsibility is to verify the license's validity at the time of employment. They are not expected to conduct further investigations unless suspicion arises about the license's legitimacy.
Conclusion:
Citing the concurrent findings of the lower forums and the lack of evidence against the insured's due diligence, the NCDRC dismissed the insurance company's appeal. The NCDRC emphasized its limited role in revision petitions and will only intervene in cases of illegality, perversity, or findings that contradict evidence.