Terms Of Insurance Contracts Should Be Strictly Interpreted: NCDRC
The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, dismissed an appeal against National Insurance Company and held that insurance contract terms must be strictly interpreted, with precise adherence to their explicit wording and no alterations made. Contentions of the Insurer The insurer contended that the complainants secured a home loan to purchase the house solely for residential purposes and that the insurance policy specifically covers residential properties, excluding any commercial use. The evidence indicated that the complainant obtained a 'Home Loan Suraksha Policy' through the bank, which acted as the insurer's agent, making communications to the bank binding on the insurer as per Section 229 of the Indian Contract Act. Ltd. v. United India Insurance Co. Ltd. and Canara Bank v. United India Insurance Co. Ltd., highlighting the importance of strictly interpreting insurance contracts.
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