Insurance Contracts Have Very Little Option For Consumers: Supreme Court
NDTV
Contracts of Insurance are prepared by the insurer having a standard format upon which a consumer is made to sign. He has a very little option or choice to negotiate the terms of the contract.
Insurance contracts prepared by an insurer have very little option or choice for a consumer, except to sign on the dotted lines, the Supreme Court said on Wednesday.
A bench of Justices Surya Kant and M M Sundresh made the observation while setting aside an order passed by the National Consumer Disputes Redressal Commission in a case seeking compensation for a shop which met with a fire accident.
"Contracts of Insurance are prepared by the insurer having a standard format upon which a consumer is made to sign. He has a very little option or choice to negotiate the terms of the contract, except to sign on the dotted lines. The insurer, who being the dominant party, dictates its own terms, leaving it to the consumer, either to take it or leave it. Such contracts are obviously one-sided, grossly in favour of the insurer due to the weak bargaining power of the consumer," the bench said.
The top court said the concept of freedom of contract loses significance in a contract of insurance.
