Driving License : If your car gets into an accident and the insurance company rejects the claim for not having a driving license, it does not automatically release the company from its liability. A similar situation was revealed in a recent decision of the West Bengal State Consumer Disputes Redressal Commission. The commission dismissed the insurance company’s appeal and ordered the policyholder to pay Rs 3.5 lakh, along with compensation of Rs 1 lakh for mental distress.
This order was promulgated on July 8, 2026. In this case, HDFC General Insurance Company rejected the motor insurance claim of the policyholder. The driver did not have a valid driving license at the time of the accident, the company said. He also had another license, which the company declared fake.
What was the whole matter?
The policyholder owned a Skoda New Laura Ambiente 1.8 TSI car. The car was insured at an IDV of Rs.6.95 lakh. The policy was valid from March 9, 2014 to March 9, 2015 and paid a premium of Rs.11,233. On October 12, 2014, a car accident occurred. It was taken to a Skoda service centre, where the repair cost was estimated at Rs 5.28 lakh. The policyholder then filed a claim with the insurance company, but the company refused to pay the claim, stating that the driver did not have a valid license and also had another license issued from Nagaland. The company said, this is a violation of Section 6 of the Motor Vehicle Act.
Having only two licenses does not absolve the company from liability
Holding more than one driving license may violate the Motor Vehicle Act and may also attract legal penalties, the consumer commission said. However, the insurance company cannot reject the policyholder’s claim on this basis alone. The commission clarified that driver’s fault and violation of insurance policy by the car owner are two different things. If the driver violates the conditions, legal action can be taken against him, but this does not automatically release the insurance company from its responsibility.
How much will the insurance company have to pay now?
The commission ordered the insurance company to pay Rs 3.5 lakh to the policyholder. This amount will bear interest at 6% per annum from September 7, 2016. If payment is not made within 45 days, the interest rate will be 9% per annum. Additionally, the policyholder will get a compensation of Rs.1 lakh for mental distress. However, the Commission did not order payment of the entire IDV amount of Rs.6.95 lakhs requested by the policyholder.
What is the lesson for policyholders?
The biggest lesson from this decision is that not every motor insurance claim can be rejected simply on the basis of a fake or invalid driving license. The car owner should check the driving license and ensure that they are competent to drive the vehicle. Additionally, if the insurance company denies the claim, the policyholder should carefully review the denial letter and the surveyor’s report.