The Kerala High Court has ruled that an insurer cannot deny an accident insurance claim merely because alcohol was detected in the insured person’s blood. The Court clarified that for an exclusion clause in an insurance policy referring to accidents occurring “under the influence of intoxicating liquor” to apply, it must be proven that the insured’s mental or physical faculties were actually impaired by alcohol and that such impairment caused the accident. The judgment reinforces that insurance companies bear the burden of proof when invoking policy exclusions based on intoxication.
The case arose from a claim under a Group Personal Accident (GPA) insurance policy taken for government employees. The deceased, who was employed in the Irrigation Department, had died in a road accident when his motorcycle collided with a bus. His dependents filed a claim under the insurance policy, but the insurer rejected it, citing the chemical analysis report that indicated the presence of alcohol in the deceased’s blood. The insurer contended that the insured was under the influence of alcohol and therefore the policy’s exclusion clause applied, disqualifying the claim.
The Court examined the wording of the exclusion clause and noted that it did not state that the mere presence of alcohol constituted being “under the influence.” The policy excluded claims only where the accident was caused while the insured was under the influence of alcohol in a manner that impaired his faculties. The Court observed that there was no evidence to suggest that the deceased was incapable of controlling the vehicle or that alcohol had impaired his senses at the time of the accident. The mere detection of alcohol in the bloodstream, the Court held, did not automatically imply intoxication or loss of control sufficient to trigger the exclusion clause.
The bench emphasized that insurance contracts must be interpreted strictly, especially when an insurer seeks to rely on an exception clause to deny benefits. It observed that the burden of proof rests with the insurer to establish that the insured was so influenced by alcohol that his faculties were impaired and that this impairment directly caused the accident. The Court rejected the insurer’s argument that chemical test results alone were adequate evidence, stating that such an interpretation would unfairly deprive beneficiaries of legitimate claims.
Additionally, the Court noted that the standards used in motor vehicle and criminal laws to determine intoxication could not be automatically applied in civil insurance disputes, as the liability in insurance contracts depends on the terms agreed between the parties, not on statutory penal thresholds.
In conclusion, the Kerala High Court dismissed the insurer’s appeal and upheld the award of the insurance amount to the deceased’s dependents. The judgment underscores that exclusion clauses in insurance policies must be construed narrowly and that insurers cannot deny claims without clear evidence of impairment and causation. The ruling strengthens consumer protection in insurance disputes and upholds the principle that contractual obligations must be interpreted in favor of coverage rather than exclusion.
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