J&K&L High Court Says Insurer Cannot Rely on Undisclosed Exclusion Clause to Deny Flood Damage Claim

The J&K&L High Court has held that insurers cannot rely on undisclosed or hidden exclusion clauses to reject claims when a policy is issued as a “Standard Fire and Special Perils Policy” that ordinarily covers risks like floods and inundation.

The Court observed that consumers’ legitimate expectations cannot be defeated by technicalities, especially when the policy itself promises coverage for events like heavy rainfall and inundation.

Reiterating that ambiguities in insurance contracts must operate against the insurer, the Bench upheld the compensation awarded to the insured family and directed settlement of the claim.

The appeal was accordingly dismissed.

[National Insurance Company Limited v. Mala Bashir & Ors.]