Insurer Can’t Reject Accident Claim on “Alcohol History” Alone, Rules Chandigarh Consumer Commission
Accident Claim: The Commission said insurers must establish a direct link between alcohol use and the accident before denying an Accident Claim, ruling that past alcohol history alone is not enough.
Accident Claim cannot be rejected merely because the policyholder has a history of alcohol consumption, the Chandigarh Consumer Commission has ruled.
Accident Claim: The Chandigarh District Consumer Disputes Redressal Commission has ruled against an insurance company that denied an accidental death claim by pointing to a line in a hospital record about a policyholder’s drinking past. The commission directed the insurer and a private bank to pay Rs 60 lakh to the widow of a Chandigarh Police head constable. It also awarded her Rs 20,000 for mental agony, harassment and litigation costs.
The order, passed on September 22 by a bench of President Pawanjit Singh and member Mohan Sharma, found the rejection to be a deficiency in service and an unfair trade practice. It sends a clear message to insurers about the standard of proof they must meet before invoking intoxication as a reason to deny a claim.
Accident Claim: A Salary Account, a Police MoU and a Fatal Road Accident
The head constable held his salary account with a leading private bank. Under a Memorandum of Understanding signed between Chandigarh Police and the bank on October 30, 2021, police personnel with salary accounts there were covered by a personal accidental death insurance policy.
On July 2, 2022, he was riding his scooter when he met with a road accident and was seriously injured. He was first taken to SPS Hospital in Ludhiana and later referred to GMCH-32 in Chandigarh. He died there on July 18, 2022.
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His widow applied for the accidental death benefit due under the MoU. In October 2022, the insurer turned down the claim, saying hospital records showed he was under the influence of alcohol when the accident happened. She then moved the district commission, accusing the insurer of deficiency in service and unfair trade practice.
Accident Claim: Insurer Invoked Exclusion; Bank Said It Was Only a Facilitator
In its defence, the insurer challenged whether the complaint could be entertained, questioned the complainant’s standing, alleged concealment of facts and disputed the cause of action. It accepted that the constable was insured but said cover was governed by the policy’s terms. According to the insurer, he was off duty at the time, and his alleged drunkenness triggered an exclusion clause.
The bank said its role was confined to facilitating the arrangement and passing documents to the insurer. It argued that the decision on the claim rested with the insurance company, which had already repudiated it.
Accident Claim: “History of Alcohol Consumption” Is Not Intoxication, Commission Says
The commission found two facts undisputed: the constable was covered under the MoU, and his death followed the July 2022 accident. The case therefore turned on a single question, whether the hospital record could support the plea of intoxication.
The hospital’s summary report noted a history of alcohol consumption, but it did not state that he was under the influence when the accident occurred. The commission stressed that the two are different things. Relying on earlier rulings of the national consumer commission, it held that merely noting a person’s drinking, with no scientific or medical evidence such as a blood-alcohol or breathalyser test, cannot establish intoxication.
Because the insurer produced no such evidence, the commission held that the repudiation was unjustified. It ordered the Rs 60 lakh payout along with the compensation and costs.
Accident Claim: What the Ruling Means for Policyholders
The decision reinforces a principle that matters well beyond this case. Insurers cannot treat a passing reference in a medical file as proof that an exclusion applies. If a claim is to be denied on grounds of intoxication, the insurer must back it with credible medical or scientific evidence tied to the time of the accident.
Policyholders and families whose claims are rejected on similar grounds can seek help from their state consumer helpline (Chandigarh: 0172-2700 183) or the National Consumer Helpline on 1915.
