Insurance companies cannot reduce death compensation for earning family members: HC
An insurance company cannot argue that dependents are earning members, when it comes to pay death compensation for an insured person, observed the Gujarat high court. The HC’s findings came in a case, wherein a person was killed in an accident. A Motor Accident Claims Tribunal asked the insurance company to pay compensation of Rs 25 lakh. The insurance company claimed that since his wife was earning salary, she would be entitled for less compensation because she did not suffer the loss calculated on death of her husband.
In this case, Maheshbhai Vasava died in 1996 in an accident while riding a motorcycle near Vadodara city. A truck dashed him from behind. Vasava’s wife Diptiben and a minor son instituted a claim in the tribunal, which asked the Oriental Insurance Company Ltd in 2007 to pay Rs 25 lakh to the mother-son duo with 9% interest.
This was not acceptable to the insurance company, which moved the high court. The company first claimed that it was not the truck that had dashed the bike from behind, but due to rash driving on part of Vasava, he had dashed the bike to truck from behind. However, the company’s claims were falsified by the police investigation carried out in this case.
Besides, the insurance company raised a contention that Diptiben was a working woman and thus an earning member of the family. In such circumstances, the family would not have affected financially in such a bad manner. Hence the total loss counted by considering the husband’s income was much more than actual financial damage caused to the family of the deceased. This argument by the insurance company was rejected by the high court.
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