Recently, an incident reported in media caught everybody’s attention, where a lady who was allegedly drunk and was under the influence of alcohol banged her car into a traffic policeman, as well as a biker whom the traffic policeman was checking. Sadly both died in this unfortunate accident. There are many such instances which have been highlighted by the media in the past also. It is worth mentioning that at least in Mumbai we have seen that the traffic police’s consistent drive against drunk driving, has succeeded in reducing the road accidents to a significant extent, thus clearly establishing the connection between drunk driving and accidents.

In fact the Motor vehicle act states that if any person while driving (a) has in his blood, alcohol in any quantity, howsoever small the quantity may be or (b) is under the influence of a drug to such an extent as to be incapable of exercising proper control over the vehicle shall be punishable for the first offence with imprisonment for a term which may extend to six months. So drunk driving carries stiff legal penalties besides the social stigma that it brings and of course it also has an impact on your insurance policy.

Let’s turn to the impact of drunk driving on matters of insurance.

If we look at life insurance, there are two things to consider –

1) The death of the person herself/ himself while driving under the influence of alcohol. My colleagues and I spoke to various life insurance companies and also looked at various policy documents. We believe that the death caused in the above circumstances would still be covered under the basic life insurance policy, although in most cases if she/he has taken an additional rider for accident insurance (to pay additional sums of money over and above the basic sum insured in case of death due to an accident or the accidental disability benefit) , it will not be granted to the person driving under the influence of alcohol.

2) If we look at the Motor Insurance policy documents then the reading of the policy documents and discussions with the general insurance companies seem to suggest that the affected third parties ( in the reported case the policeman and the motor bike driver) will still be eligible to be paid the damages despite the driver causing the accident while under the influence of alcohol. Of course the courts reserve the right to decide who shall pay the damages (whether the owner of the vehicle or the insurance company) and in most such cases the court is likely to ask the owner to bear the payment rather than the insurance company. Coming to the damage to the car itself, this will not be payable by the Insurance company as the damage occurred due to the actions of the driver, who was drunk.

In most countries drunk driving or speeding gets you not only a suspension/cancellation of license but it also increases the insurance premiums for the future. But in India Car insurance policies are not issued with named drivers. In the UK your car insurance premium will depend on the age and the driving records of the named driver (and if you name more than one driver the premium will be higher) and the insurance monies are not payable if the accident is caused by a driver who is not named in the policy. In India this is a far cry as we are not even able to identify who was driving the car at the time of fatal accident ( Readers will remember the fatal accident at Bandra which was allegedly caused by a famous film star while under the influence but till today the prosecution has not been able to conclusively prove who was driving the car. Since selective increase in car insurance premiums is not an option in India ,everybody has to share the burden of the losses caused by a few drivers who indulge in drunk driving.

So more power to the Mumbai traffic policeman (and their counterparts in other cities) who make sure that the road accident rates come down by strictly enforcing the rules against drunken driving.

Remember this the next time you grumble about the delay caused at a check point while returning home late from the office or a party. And if you have downed a few and have still chosen to drive, I hope they put you in a cell and throw the key away.

Indian cricket team skywalks in Australia.

If you are wondering what these headlines are doing in a personal finance blog let me explain.

Millions of dollars are riding on these celebreties. In fact for the cricket team it is probably in billions rather than millions. I am sure they are insured to the gills against accidents. Given the amounts involved  i am sure the packages are specially designed for them. Am very curios to find out if their policies cover accidents that may be caused while engaged in such adventure sports . Did the thought of insurance coverage cross their minds at all while they were engaging in these high risk sports ?

Any information is most welcome ……

In any case even if the celeberities are covered because they have access to high quality insurance brokers what about the common folks. A close friend of mine was recently describing his bungee jump in South Africa.  He had no problems but he clearly was not aware that he had no insurance coverage if he had suffered from any injuries. I have myself done para sailing on a trip overseas (even after going through the policy wordings i am not sure i would have been covered in the event of an accident) . We have already read reports of the unfortunate death in Bangalore from a bungee jumping accident. Off Course Life insurance cover is available for death from this accident but the medical expenses would not have been covered if he had survived.

Shouldn’t these facts be known more widely and shouldn’t the people running these sports be required to provide warnings to their clients apart from the release forms that they normally get signed.

Views welcome………

P.S. Preity - if you ever read this - my daughter is a big fan of yours

Watching cricket has professional spin offs as well. Just saw an advertisement from the Bajaj Allianz Insurance group (it has both life as well as non life insurance products). The advertisement feature a youngish couple engaging in white water kayaking as well as other sports which, in my dictionary, can only be classified as adventure sports. The advertisement story line is that the couple is so relaxed because they have chosen to protect themselves through the various policies of the group that they can afford to engage in these pursuits. So what is so exceptional about this advertisement that i am writing this blog entry?

The point is that most health and accident policies exclude claims arising from injuries/accidents caused while engaging in adventure sports. Most consumers are not even aware of such exclusions. now if somebody watched this advertisement and bought a policy from them and a claim arose because he followed the lifestyle that the advertisement featured  would the Insurance company be justified in rejecting that claim ?

I invite your views on this. For the Apnateam members - could somebody please do the research on their policies to see if white water kayaking is covered in their accident and health insurance policies ?

A close friend of mine, Mr. Ramzan R. Motani has expired in the recent bomb blasts in July 2006. He had credit cards from HDFC/HSBC with an approximate due of Rs.22, 000. Reliable sources have informed us that is an insurance of Rs.2 lakh for personal accident. The bank hid this and did not issue a claim form. They said that the above mentioned case is not an accident case and are not issuing a claim form.