It always bothered me as to why the motor insurance policies do not have the same wording in India. Motor Insurance is a compulsory insurance. None has thought about the wordings earlier i.e., to know whether all the insurance companies are having same policy wording. Everywhere in the world, it is a universal global standard to have same policy wording. It is all the more important to have same policy wording because, motor insurance is compulsory and mandated by the law.
There is one country where motor insurance was optional – Kingdom of Saudi Arabia. Very recently even that country made motor insurance as compulsory. Why is it compulsory? It is compulsory because knowingly or unknowingly we may injure others, damage other people’s property in a motor accident. The others are innocent people. They should not be punished. That’s why motor insurance is compulsory. Realizing this, the respective national governments unified the policy wordings or they kept the same policy wordings for all insurance companies across the country.
When it comes to our own India, that is, Bharat, the situation is entirely different. I do not know if we have a very weak regulator or no regulator or the insurance companies are too strong or anybody can interpret the regulator’s regulations in their own sweet way. Whatever may be the reason, in India we do not have same policy wording. At most I can say we have similar policy wording. We do not have unified policy wording. We have almost unified policy wording for a compulsory insurance, motor insurance.
With less than 60 insurance companies and less than 300 insurance brokerage companies in India I would say we have a very lean organizational insurance structure. We have a huge regulator with a monolithic building, hundreds of staff, with state of art communication technology to support…yet something is amiss. With this background, in the name of the compulsory motor insurance, the insurers are settling, rejecting, declining claims; and the insureds are opting for arbitration, appeals to the regulator, ombudsman, courts for their declined, rejected claims. Most claims are rejected due to wrong interpretation of the policy wording. I would say not even wrong interpretation, rather it is wrong understanding of the policy.
In the foregoing articles, I would be examining very aspects of insurance policy wording not necessarily in the same order as the policy wording as stated in an insurance policy because there is no order among the motor insurance policies. Therefore, I will follow my own order.
In this entire exercise, I end up pitying the poor policy holder who is relentlessly funding the salaries of all insurance company employees and the regulator with a futile hope that he would get the claim someday, somehow, somewhere…if it were to happen.
About the Author
Dr. K. Raja Gopal Reddy is a seasoned internationally qualified Insurance professional.
What you are reading here, may not answer all the questions we have, but has the absolute power of asking unsettling questions which increase the interest in the strange world, and show the contradictory wonders lying just below the surface of the commonest things of life. Look at this disturbing but beautiful thought of Friedrich Nietzsche “God is dead. God remains dead. And we have killed him”.
Dr. Reddy can be reached at: raja66gopal@gmail.com
