In recent years, the Indian insurance industry has experienced substantial expansion and development. The frequency and severity of claims, particularly those filed under professional indemnity, employment practise liability, and cyber coverage, has increased in recent years. The government, on the other hand, is taking steps to enhance the business climate. The establishment of commercial courts for adjudicating business issues, such as insurance and reinsurance disputes, is one example of a development that we think will have a favourable impact on dispute resolution delays.
WHERE ARE INSURANCE DISPUTES LITIGATED?
Insurance issues can be litigated in either a civil court or a consumer forum if there is no reference to arbitration in the policy’s terms. If the insurer files a lawsuit, it must be filed in civil court, as consumer forums are unable to hear such cases.
The civil court or consumer forum before which the matter is decided is determined by the amount of the dispute and the geographical limits of the defendant insurance company’s office, within which the cause of action for the disagreement began.
WHEN DO INSURANCE RELATED CAUSES OF ACTION ACCRUE?
In most cases, disputes between the insured and the insurer emerge when the insured’s claim is denied (in part or in full) by the insurer, despite the fact that the insured feels the claim is covered by the policy. The insurer and the insured may disagree about the extent of the insuring clauses, the amount payable under the policy, the applicability of exclusions, or compliance with policy terms and conditions, among other things.
REMEDIES OR DAMAGES
Specific performance and damages claims are available in Indian law in circumstances of insurance disputes. In a procedure, the insured might either demand that the insurer implement its policy responsibilities precisely or pay the claim amount.
Interest may be awarded by Indian courts and tribunals from the date the cause of action started until the decision is enforced. Interest is often paid at a rate of 9% to 12%.
Temporary injunctions and interlocutory orders, which are provided for by the Civil Procedure Code, 1908, are examples of interim reliefs that are accessible in general. Parties can also apply for interim mandatory injunctions under the Specific Relief Act of 1963. In appropriate instances, a court may issue a temporary injunction restraining any conduct or omission, or make an order delaying and blocking the alienation, sale, removal, or disposition of a property.
Interim relief might also entail ordering the insurer to pay the insured the admitted sums due under the policy, leaving only the disputed amount to be decided. It is up to the court to decide whether or not interim relief should be granted, as well as the terms on which it should be provided and the length of time for which it should be granted.
MOTOR ACCIDENT CLAIMS TRIBUNAL (MACT)
According to Section 165 of the Motor Vehicle Act of 1988, MACT deals with claims for compensation arising from accidents involving the death of a person or bodily injury to a person arising from the use of motor vehicles, or damages to a third party’s property arising from the use of motor vehicles, or both.
A judicial officer from the Delhi Higher Judicial Service judge over MACT courts. These are now under the direct jurisdiction of each state’s Honorable High Courts.
MACT has been ordered by the Supreme Court to provide victims with seedy justice, ensuring that all victims receive justice, that all dependents of the deceased receive compensation and the amount of compensation, and to undertake projects to improve the implementation of these laws.
When an insurance company’s liability is uncontested, the insurer should pay the sum to the deceased’s family without waiting for a MACT ruling or a Lok Adalat settlement. Otherwise, the insurer must deposit the funds within 30 days of the decision.
COMPENSATION FOR MOTOR ACCIDENT CLAIMS
Any of the following injuries could result in a claim under an automobile insurance policy:
- Injuries or damage to other people’s property are included in this category. This individual is referred to as the “third party.” In a third-party claim involving a person’s vehicle, the accident must be reported to the police as well as the insurance company as soon as possible. However, if a third party is hurt as a result of someone else’s car, the injured person must collect the vehicle’s insurance information and notify the vehicle’s insurer.
- Self-Inflicted Damage—This covers damage to a person’s own insured vehicle. This is known as a “own damage claim,” and it is available to those who have a package or comprehensive policy.
In the event of an own-damage claim, in which a person’s own car is damaged as a result of an accident, the person must promptly notify the insurance company and the police, if necessary, so that a surveyor can assess the loss.
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