A motor insurance policy does not indemnify the loss or damages caused by a drunk driver

Recently an incident was reported in media wherein a lady who was allegedly under the influence of alcohol banged her car into traffic policeman, as well as a biker whom the traffic policeman was checking. Sadly, both died in this unfortunate accident. Not only she, there are many such instances have been highlighted by the media in the past.

In fact, the motor vehicle act states that driving by a drunken person or by a person under the influence of drugs – whoever while driving or attempting to drive a motor vehicle or riding or attempting to ride, a motor cycle – (a) has in his blood, alcohol in any quantity, howsoever small the quantity may be or (b) is under the influence of a drug to such an extent as to be incapable of exercising proper control over the vehicle, shall be punishable for the first offence with imprisonment for a term which may extend to six months.

So drunk driving carries stiff legal penalties besides the social stigma that it brings and of course it also has an impact on the insurance policy. Let’s turn to the impact of drunk driving on matters of insurance. If we look at life insurance, there are two things to consider – first, the death of the person herself/ himself while doing drunk driving, and second, the people who have been affected.

The death caused in the above circumstances would still be covered under the basic life insurance policy, although in most cases, if the policyholder had taken an accident insurance rider (to pay additional sums of money over and above the basic sum insured in case of death due to an accident or the accidental disability benefit), such rider will not be granted as the person was driving under the influence of alcohol.

The motor insurance policy documents suggest that the affected third parties will be eligible to be paid damages despite the driver being under the influence of alcohol.

Of course the courts reserve the right to decide who shall pay the damages -whether the owner of the vehicle or the insurance company, and in most such cases, the court is likely to ask the owner rather than the insurance company to bear the payment. Coming to the damage to the car itself, this will not be payable by the insurance company as the damage occurred due to actions of the driver, who was drunk and this is an exclusion of  the policy.

In most countries, drunk driving or speeding gets you not only a suspension/ cancellation of licence, but also increases your insurance premiums in future. But in India, car insurance policies are not issued with named drivers.

In the UK, a car insurance premium will depend on the age and the driving record of the named ‘driver’ of the car (and if more than one driver is named, the premium will be higher) and the insurance monies are not payable if the accident is caused by a driver who is not named in the policy.

In India, this is not possible as we are not even able to identify who was driving the car at the time of a fatal accident (Remember the fatal accident at Bandra, allegedly caused by a film star while under the influence? Till today, the prosecution has not been able to conclusively prove who exactly was driving the car).

Since selective increase in car insurance premiums is not an option in India, everybody has to share the burden of the losses caused by a few drivers who indulge in drunk driving. It needs more power to the traffic police who reduce road accidents by strictly enforcing the rules against drunken driving.

Extracts from “Guide for Motor Insurance (IC-72)” by Dr. Rakesh Agarwal. Copyright of Sashi Publications,kolkatawww.sashipublications.com and www.bimabazaar.com