Caveat Vendor. Sewing up a tailor’s case

Do you feel your claim has been unfairly rejected by your insurance company? If yes, you could try knocking the doors of a consumer court for relief.

That’s what Hari did when his insurer refused to allow him accident benefit, after he was disabled following an accident.

Passing the decision in Hari’s favour, the District Consumer Disputes Redressal Forum ordered the Life Insurance Corporation of India (LIC) to pay Hari the accident benefit that he was entitled to.

LIC then appealed against the decision with the State Commission and thereafter the National Consumer Disputes Redressal Commission, both of which rejected the company’s petition.

Hari, a tailor, took two endowment assurance policies (with accident benefit) for ₹25,000 and ₹50,000 in November 1999 and March 2002 with LIC. The two policies were to expire in November 2014 and February 2017 respectively. In August 2008, Hari was badly injured after being hit by a motorcycle. He was operated upon and a steel rod inserted into one of his thighs.

He was also advised by the doctor not to use a foot-pedalled tailoring machine.

Consequently, Hari filed a claim under the accident benefit clause of the two policies, as he could not continue working as a tailor. His claim was rejected by the insurer, which was when he approached the consumer court.

LIC rejected Hari’s claim contending that the injury suffered by him was not a ‘permanent disability’ under the terms and conditions of the insurance contract.

Under the policy, the insured person has to satisfy certain conditions – the disability should be permanent; it should be the result of an accident; it should leave the person insured unfit for any work, and the proof of disability submitted should be satisfactory.

According to the insurer, even if Hari could not work as a tailor because of his injury, he could take up some other work to make a living.

Hari had also failed to provide any documented evidence to prove that he had suffered ‘permanent disability’ and had not got himself examined by the doctor appointed by the insurer.

So, he was not eligible for any accident benefit under the policies taken by him.

Fortunately for Hari, the consumer courts held a very different view.

Upholding the findings of the courts at the district and the state levels, the National Commission agreed to the fact that as a result of the injury to his thigh bone, Hari was no longer fit to make a living as a tailor.

In the accident benefit clause, it gave a broader interpretation to one of the conditions — ‘‘Disability should be such that there is neither then, nor at any time thereafter any work, occupation, or profession that, the life assured can ever sufficiently do or follow to earn any wages, compensation, or profits.”

The court, therefore, ruled in favour of Hari.

It held that a very literal interpretation of this condition would imply that nobody would ever be able to claim accident benefit.

There would always be some alternative work — no matter how unsuitable — that an injured person could take up. Tailoring was what Hari was sufficiently trained in and since he could no longer use a foot pedal sewing machine without risking further damage to his leg, he was entitled to accident benefit.