LIABILITY OF INSURANCE COMPANY AN CASE OF HIT AND RUN CASES

 

LIABILITY OF INSURANCE COMPANY AN CASE OF HIT AND RUN CASES

 

Whether insurance company is liable indemnify in case of hit and run cases, when claimant / owner riding a vehicle, which was hit by unknown vehicle. The answer is : NO.

Under motor vehicles Act, the motor vehicles are mandatorily insured for the third party liability coverage, which is called as Act only policy. For own damages and personal accident cover for the owner cum driver and passengers, if any, additional premium has to be paid and the liability of the insurer, who indemnify depends on the limits mentioned in the policy. The statutory coverage to compensate in terms of section 147 of the motor vehicles act will arise whenever the vehicle is insured under any of the above three categories. As far as the third party liability cover it is now a mandatory requirement. Own damage cover and personal accident cover is optional, if the owner of the vehicle had paid additional premium, then alone, the insured will be entitled to get indemnify the claim. The insurance company will have legal duty to indemnify the insured under the contract. If the vehicle owner had not paid any additional premium for personal accident cover, the owner/driver have no contractual right to claim compensation from the insurer.

In a case of hit and run, sec 140 of motor vehicles act provides remedy for the victims. In alternate, under section 163 A of MV act, the insured without proving negligence of the third party vehicle can lay claim on the principles of no fault. In such cases, the compensation is payable when death or total permanent disability occurs to the claimant.

This aspect has been clearly explained in National insurance co.ltd.,  -vs-  Munusamy 2021 (1) TNMAC 644

 

The brief of the case is as follows:

On 16.3.2013 at about 9.00 AM, when the claimant along with the pillion rider was travelling in a bike bearing regn.no. TN 36 H 4339, an unknown car rashly and negligently hit the motorcycle and ran away. The petitioner and the pillion rider sustained severe injuries. Petition filed claiming Rs.5,00,000/ as compensation on the ground that due to accident caused by the hit and run vehicle, there was loss of earning of Rs.15,000/ pm as mason under section 140 & 166 of the motor vehicles act.

The claim petition was opposed by the insurance company on the ground that the claimant is the owner of the vehicle inured. It is a case of hit and run. Negligence is on the part of the car, which has hit the claimant and the liability of the insurance company is only to indemnify the owner against the third party claim. The claimant /  owner cum insured is not a third party to the contract. He has not paid any additional premium for personal accident. The policy is an act only policy. In this case the tribunal has no jurisdiction to try hit and run case. Hence the claim petition is not maintainable. But the tribunal rejected the defence of the insurance company and awarded compensation.

In this appeal, the insurer has reiterated its defence stating that the tribunal has failed to note the terms of the policy, which covers only third party and own damages. Admittedly the accident occurred when an unidentified car came from behind and hit the claimant’s two wheeler. When no additional premium for personal accident coverage is paid by the insured, the remedy is before the district collector to claim compensation under sec 140 of MV act and not before the motor accidents claims tribunal under sec 166 of the MV act.

The learned counsel for the Respondent / claimant would submit that the claimant being owner of the vehicle had insured the vehicle for own damage basic and third party basic. Being a package policy, no additional premium need to be paid. The learned counsel would further submit that under the motor vehicles act being a beneficial legislation, the accident victim is entitled for just and reasonable compensation. The insurance company having collected the premium for own damage as well as for third party claim cannot decline to indemnify the loss occurred to the owner-cum-insured only because the accident was caused by an unknown hit and run vehicle. Having collected the premium for own damages, the insurance company has a contractual liability to pay the limited liability occurred under the policy under sec 166 of MV act.

In response to this submission, the learned counsel for the insurance company / appellant would submit that the premium collected for own damage does not cover the cases of hit and run. In such cases, the statutory liability to compensate is upon the government / district collector under sec 140 of MV act. Further, the limited liability of compensation under the own damage or personal accident will arise only in case of death (or) loss of limb (or) loss of eye sight (or) permanent total disability. In this case the claimant has not paid any additional premium for personal accident cover and also the injury caused due to hit and run vehicle does not fall any of the category covered under own damage or personal accident cover. 

Under the motor vehicles act, the motor vehicles are mandatorily insured for the third party liability coverage, which is called as act only policy. For own damages and personal accident cover for the owner cum driver and passengers, if any, additional premium has to be paid and the liability of the insurer, who indemnify depends on the limit mentioned in the policy. The statutory coverage to compensate in terms of sec 147 of the MV act will arise whenever the vehicle is insured under any of the above three categories.

In the instant case, the insurance coverage is for own damage and third party basic. Even assuming that the premium Rs.70.50 paid under own damage basic will cover the claimant, who is the owner of the vehicle and had sustained injury due to the negligence of unknown hit and run vehicle, to maintain the claim petition, the nature of injury must be total permanent disability.

Looking at the discharge summary marked as EX P8, this court finds the said injuries does not fall under the definition of permanent total disablement. Therefore, the award of the tribunal under sec 166 of MV act, is contrary to law and terms of insurance policy. Hence liable to be set aside.