Madras High Court orders Rs 27 lakh insurance claim to COVID-19 victim's widow

MADURAI: The Madurai Bench of the Madras High Court has directed Tata AIG General Insurance Company to pay Rs 26,87,912 under a home loan insurance policy to a woman whose husband died of COVID-19, observing that his failure to disclose diabetes and hypertension was immaterial, as the cause of death was coronavirus infection.

The division bench of Justices CV Karthikeyan and R Sakthivel observed: “... it is immaterial that the husband of the writ petitioner had diabetes or that he suffered from hypertension. Even if he did not have the same, had he been affected by coronavirus, he would still have suffered the same fate. There was no proper treatment which was available at that particular point of time.”

The petitioner, Syed Ali Fathima, said her husband had obtained a loan of Rs 52.5 lakh from PNB Housing Finance Limited, New Delhi, for constructing a house and home loan insurance with Tata AIG General Insurance Company under a master policy for Rs 26,87,912, to cover the risk of death.

He was infected with COVID-19 and died on July 26, 2020. When his wife applied for the claim, the insurer rejected it on the ground that her husband had suppressed the fact that he suffered from diabetes and hypertension.

The Single Judge dismissed her writ petition, holding that non-disclosure of the husband’s diabetes and hypertension breached the principle of utmost good faith. On appeal, the division bench said these facts could not be denied or disputed, but the overriding fact was that he died of COVID-19.

The court noted that the husband died in the first phase of the pandemic, when the medical world did not yet know the effects of the virus, the proper treatment or the measures needed to prevent infection. The medical world was still at a nascent stage in determining the impact and seriousness of the virus, it observed.

“Though the fact of diabetes and hypertension have not been disclosed in the policy, we still hold that the risk of death by Coronavirus should be covered by the fourth respondent as that was a supervening circumstance and was not available as a cause for death, at the time when the policy was introduced or was entered into between the parties,” the judges said.

Accordingly, the court directed the insurer to pay the amount within four weeks, without interest.