Enhance accident cover to Rs 15 lakh: Madras High Court

Chennai: Observing that it is unfortunate that vehicle owners are not getting adequate compensation in the event of death or injury, Madras high court has directed Insurance Regulatory and Development Authority of India (IRDA) to enhance Compulsory Personal Accident Cover (CPAC) from Rs 1 lakh to not less than Rs 15 lakh.

A division bench comprising Justices R. Subbiah and A.D. Jagdish Chandira gave the directive while setting aside an order of the Motor Accident Claims Tribunal (MACT), awarding a compensation of Rs 51.37 lakh to four legal representatives of the deceased Rajini.

On June 13, 2011, when Rajini was riding pillion on his own two-wheeler, driven by Balamurugan in Neyveli, a cyclist suddenly darted across the road.  The rider of the vehicle lost his balance and applied sudden break. In the impact, Rajini was thrown out of the vehicle and sustained multiple head injuries and died the next day. MACT awarded '51.37 lakh as compensation.

Aggrieved, the insurance company filed the present appeal contending that when the owner of the vehicle died in the road accident without the involvement of any other motor vehicle, he cannot be construed as a third party for the purpose of payment of compensation and at best, the claimants were only entitled for payment of Rs 1 lakh under the CPAC as per the terms of the policy and the amount of premium paid thereof.

 Allowing the appeal filed by United India Insurance Company, the bench made it clear that the claimants are only entitled for a sum of Rs 1 lakh towards CPAC as per the terms and conditions of the insurance company.

 Pointing out that the policy to compensate the owner of the vehicle by virtue of CPAC was introduced 15 years ago, the bench said in 2002, the sum of Rs1 lakh envisaged under CPAC might be sufficient to meet medical expenses for treatment of the injured owner of the vehicle to certain extent.

 Now 15 years later, cost of medical treatment has sky rocketed. Also, number of vehicles has been on the rise and not a single day passes without a road accident in which victims suffer bodily injury or death.