Insurance Policy Effective as Soon as Payment Made: Consumer Forum

A district consumer forum said that, insurance policy becomes effective as soon as the first premium is paid. This rule was ordered by the consumer forum to one of the insurers who denied to pay reimbursement for the insurance claim.

One of the residents of Thane, had taken an insurance policy for his vehicle on October 25, 2008 at 20.34 hrs from one of the insurance companies. His car met with an accident within hours of paying the first premium. But the insurance company rejected his claim, saying that policy was effective from October 26, 2008.

Dismissing the submission of the insurance company, the forum said that, insurance policy becomes effective from the time the payment is made. So, the complainant is entitled to get the reimbursement from the insurer.

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