A vehicle continues to be insured until the policyholder receives a formal cancellation notice, Karnataka HC held in a recent judgment, asking an insurer to pay over Rs 1.2 lakh as it could not prove that a customer had received formal intimation about annulment of coverage. P Yadava Rao’s car was damaged after being hit by a lorry in July 2007. He moved a motor accident claims tribunal seeking compensation. The insurance company was exonerated on the grounds that it had cancelled the policy as the cheque issued for payment of premium was dishonoured. Court held that it was the insurer’s responsibility to inform the vehicle owner about policy cancellation, stressing there must be proof of the addressee having received such an intimation.
