General information for a grievance, not legal advice.
Life insurance death claim (Section 45, Insurance Act 1938)
- Three-year incontestability: once a life policy has run for three years — counted from the latest of its issuance, the commencement of risk, its revival, or a rider — it cannot be called in question on any ground whatsoever, including fraud. A recent revival restarts a fresh three-year clock.
- Within three years: the insurer may repudiate, but it must communicate its grounds and the supporting material in writing. For a non-fraud misstatement the onus is on the insurer to prove the fact was material — that it would not have issued the policy had it known. For fraud it must prove a deliberate intent to deceive; mere silence is not fraud.
- Premium refund: if the repudiation is for a non-fraud misstatement, the insurer must refund all premiums paid, within 90 days.
- Suicide: within the first 12 months from risk commencement or revival, the nominee still receives at least 80% of premiums paid or the surrender value (the fund value for a ULIP). After 12 months it is covered.
- Grace period: death within the grace period (15 days monthly / 30 days other modes) is a payable claim — the policy was in force.
- Nominee: a parent, spouse, or child nominee is a beneficial nominee (Section 39(7)) and keeps the money.
Motor own-damage claim (causal-nexus principle)
- A claim cannot be repudiated in full for a breach that is not germane to the loss. Where a use-class technicality, licence irregularity, or intimation delay had no causal connection to how the damage occurred, the insurer must settle — often on a "non-standard" basis (commonly up to 75%) rather than reject outright. This rests on settled Supreme Court authority (e.g. National Insurance v. Nitin Khandelwal; Amalendu Sahoo v. Oriental Insurance; Jitendra Kumar v. Oriental Insurance).
- Delay: mere delay in intimation cannot deny a genuine, FIR-supported claim (Gurshinder Singh v. Shriram), and the 2024 Master Circular bars repudiation for delay that has not increased the assessed loss.
- Drunk driving: the burden of proving intoxication and impairment is on the insurer (IFFCO Tokio v. Pearl Beverages).
- Depreciation: partial-loss claims apply a standard depreciation schedule to replaced parts (50% on rubber/plastic, nil on glass, rising by vehicle age); a zero-depreciation add-on removes it. A total loss is paid at the Insured's Declared Value less the wreck.
- Engine water damage (hydrostatic lock): a grey area — insurers often deny flood engine damage on a base OD policy as consequential loss, so cover is commonly disputed; not restarting the engine strengthens a "direct accidental damage" argument but does not guarantee it. The reliable route is an engine-protection add-on, which expressly covers water-ingress / hydrostatic-lock damage (with its own exclusion for continuing to drive or restart after ingress).
- Surveyor's report: important but not conclusive or binding (Section 64UM, Insurance Act) — the insurer may depart from it for recorded reasons and the policyholder can put an independent estimate against it (Sri Venkateswara Syndicate v. Oriental Insurance).
Where to escalate
Both life and motor rejections follow the same ladder — insurer's Grievance Redressal Officer → IRDAI / Bima Bharosa → Insurance Ombudsman (free, binding, claims up to ₹50 lakh; Rule 13(1)(b) covers partial or total repudiation by life, general, and health insurers).
Source: Insurance Act 1938 (ss.45, 39, as substituted by the Insurance Laws (Amendment) Act 2015); IRDAI Master Circular on Protection of Policyholders' Interests, 2024; named Supreme Court judgments. Last reviewed 2026-07-11.