Accidental Claim

Indian laws on accident claims are quite stringent. The laws were formulated by prioritizing the best interests of the victims and those who are liable to disburse the compensation, such as insurance companies. In order to give effective rights to the person injured or expired in an accident, Fatal Accidents Act, 1885 was enacted in. This Act provided only a procedure and a right of named legal heirs to claim compensation from the person committing negligence. This enactment has worked in India for a comfortable long period. Because of increase in automation and consequential losses of life and property in accident, it was considered that to give relief to the victims of accident claims an effective law should be brought in. In 1988, the Government of India introduced the Motor Vehicle Act, to make the Indian laws on accident claims more effective. The Act provides for compulsory third party insurance and procedure of adjudication, to ensure relief to victims of accident cases. Also, the Act stipulates for establishment of Motor Accident Claims Tribunal to address the accident claim cases. Indian law on accident claims pertain mostly to the Motor Vehicle Act. Section 140 to 144 of the Act provides for No Fault Basis, which ensures relief to the families of victims who are killed in hit and run accidents, and where the killer vehicle is not identified, compensation is granted, only if the following is proved:

• Accident was caused by the offending vehicle
• The offending vehicle was insured
• Death or injuries were caused by the accident

Section 145 to 164 of the Act provides for mandatory third party insurance, which is compulsory for a vehicle owner.

Further, the Act provides for unlimited liability and limited defense of the insurance companies. Several court judgments passed by the Supreme Court have restricted the legal defense strategies put forward by various insurance companies. Also, the liability to prove the limited defenses rest on the insurance companies.

The limited defenses allowed to be made by the insurance companies include:
• Use of vehicle for racing and speed testing
• Use of transport vehicle not allowed by permit
• Drivers without a valid Drivers license or who have been disqualified from owning Drivers license.
• Void insurance policy due to non-disclosure of material facts.