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Insurance not for pillion
No cover: Two men with luggage on a bike in Delhi

New Delhi, April 5: The Supreme Court has held that third-party insurance does not cover the risk of injury or death of a passenger travelling for free in a private vehicle.

“The law on this subject is clear. A third-party policy does not cover liability to gratuitous passengers who are not carried for hire or reward,” a division bench headed by Justice B.N. Srikrishna said while setting aside a Himachal Pradesh High Court order.

The court added that an insurance company would be liable to pay compensation only if the vehicle owner has paid additional premium for covering the driver or a pillion rider.

A third-party insurance policy, which is mandatory for all vehicles, covers risk to life or damage to property of others on the road. It does not cover injury to self or damage to the policy-holder’s vehicle.

In case a pillion rider dies or is injured, his/her family can claim compensation from the owner or driver if it is proved that the driver’s negligence had caused the accident.

Allowing an appeal by United India Insurance Company, the court said the high court had erred in making the insurer jointly liable with the owner of a scooter that met with an accident, killing a pillion rider.

The Motor Accidents Claims Tribunal had held that the accident happened because of negligent driving by owner Tilak Raj, who was liable to pay Rs 3,89,000 to the heirs of Rajinder Singh who lost his life.

The high court said the insurance company was jointly liable with the owner to pay the amount.

Citing an apex court judgment in 2003 where it was made clear that the third party policy did not cover passengers in a goods vehicle, the bench said same would apply with “equal force” to gratuitous passengers in other vehicles.

The court also clarified that even if the owner of a vehicle fails to inform the insurance company about its sale, the company would not be absolved from its liability under third party policy.

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