The Hon’ble Supreme Court in the case of Jai Prakash v. National Insurance Company has given following suggestions to the insurance companies with regard to deposit of admitted amount and also cashless treatment for the victims of road accidents:-
- In cases of death, where the liability of the insurer is not disputed, the insurance companies should, without waiting for the decision of the Motor Accidents Claims Tribunal or a settlement before the Lok Adalat, endeavor to pay to the family (Legal representatives) of the deceased, compensation as per the standard formula determined by the decisions of this Court.
- In cases of injuries to any accident victim, where the liability is not disputed, the insurer should offer treatment at its cost to the injured, without waiting for an award of the Tribunal. If insurance companies can meet the bills for treatment of those who have taken a medical insurance policy, we see no reason why they should not extend a similar treatment to the accident victims of vehicles insured with them.
- In countries like United Kingdom, the percentage of motor accident claims, with reference to the accidents is very low. This is because immediately after being notified of the accident, the insurer makes its own enquiries and satisfies itself about its liability and voluntarily assesses and pays the compensation to the victim. Only where the insurer denies the claim or where the victim is not satisfied with the quantum of compensation paid, the matter goes to court. There is no reason why insurance companies in India should not adopt such a procedure. In death cases, the calculation of compensation is now standardized by several decisions of this Court
- The insurers can either by relying upon the police report (AIR) or by enquiring with the family or the employer of the deceased, ascertain the three inputs required for calculation of the compensation, that is, age of the deceased, income of the deceased and number of dependent family members. With these particulars, the insurers can easily calculate the compensation and offer, either lump sum compensation or an annuity.
- Similarly in cases of injuries, the insurers can offer treatment in hospitals approved by it and meet the expenses or pay the bills, or if the victim has already undergone the treatment, reimburse the cost of treatment. It can also reimburse other items of special damages, the damages for pain suffering, which is also standardized in several decisions of this Court. By such voluntary payment there will be all round benefits. The insurers save interest and litigation cost and discharge their obligation to the society. The victims will be relieved from financial hardship and benefit from timely effective treatment. Burden on courts will be reduced and judicial man power can be diverted to more complex cases.
Written by Adv Rohit Yadav