The Insurance Company’s RIGHT TO INSPECT

It seems no Insurer or Broker who deals with Motor Insurance has talked of the issue which is being said here.

An extract from the Motor Policy Document which states:

“The insured shall take all reasonable steps to safeguard the vehicle insured from loss or damage and maintain it in efficient condition.”

Further,

“The company shall have at all times free and full access to examine the vehicle insured or any part thereof or any driver or employee of the insured…”

This means the following:

1. The insurance company shall have at all times free and full access to examine the vehicle. In other words, the company is only informing us that at any point of time, whenever the company chooses, it has free and full access to the vehicle. It need not have owner’s permission. It has free and full access. The owner has no say. If the insurance company were to decide to examine the vehicle insured, then it is an obligation on the part of the insured to show the vehicle irrespective of time, place, availability or whatever.
2. The company also has free and full access to examine a part of the vehicle. Thus, it can examine the tyres, for example. If it wants to examine the engine, it can. 
3. It can also examine, due to free and full access clause, any driver driving the vehicle.
4. It has full and free access to examine any employee of the insured.

What will it examine with free and full access at all time? It examines the following:

1. Whether the insured is taking all reasonable steps to safeguard the vehicle from loss or damage.
2. Whether the insured is maintaining the vehicle in an efficient condition.
3. It can also examine a part of the vehicle or a driver or the employee of the insured to decide whether the vehicle is maintained in an efficient condition or not.

The Motor Policy document does not define phrases like – reasonable steps, safeguarding the vehicle and efficient condition.

What will happen if you refuse to give free and full access?

1. The company can cancel the policy.
2. No refund of the balance premium on the grounds of misrepresentation, fraud, non-closure of material facts or non-cooperation of the insured – none of these terms are defined!
3. If the policyholder is refusing to cooperate with the insurance company, the policy will be cancelled ab initio (from the beginning). Further, the premiums paid by the insured will not be returned. They will be forfeited. If there is any claim, it will not be paid.

Please be aware these policy terms are never openly discussed, but written in the policy document.

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