Insurance companies often lionize the slew of options and schemes available and prevail upon people to somehow subscribe to their ‘lucrative’ plans. But when it comes to paying back this money, the same officials, who were earlier at their amicable best find some means to impede the proper transfer of money. It is now a commonly seen scenario that people should walk down courts with a volley of litigation works to earn back their deserved money from such insurance companies.

People with fixed jobs and salaries sometimes endure untimely death in accidents. The Insurance company is thus entitled to pay compensation to the kin of the victim as per rule and the amount to be paid back is fixed. So, there is little option for any doubts in this case as the money to be paid back is all fixed on paper. But the same won’t work with people working in unorganized sectors. The amount they get under third-party insurance is often very low. Until now, it was not under the usual practice of courts to discern the social status of the deceased in determining the compensation. The directive given by the Supreme Court yesterday has brought the needed change to end the ambiguity that existed in this regard.

The Supreme Court has given a suggestion that the social status of the person should be taken into consideration if the person working in the unorganized sector loses his/her life in a road accident. The SC made the recommendation while considering a case of a car accident in Gujarat. Justice A S Bopanna and Justice Prashant Kumar Mishra made this vital recommendation.

Thirty-five-year-old Yakub Muhammad Singh, a native of Gujarat, died in a car accident on November 14, 2000. He was an auto mechanic and a Jeep driver. He earned Rs 5,000 per month as a mechanic and Rs 3,000 as a jeep driver. The Motor Claims Tribunal took this into account and awarded the family a compensation of Rs 11,87,000 with 7.5% annual interest. However, the Gujarat High Court reduced the compensation on appeal by the insurance company.

The compensation was reduced to Rs 4,75,000 on the grounds that the family did not produce any proof that the deceased had worked as a mechanic. It was at this point that Yakub's wife Kabra Bibi approached the Supreme Court. SC after perusal of the documents quashed the Gujarat HC decision and also pointed out that the claim for compensation cannot be dismissed even in the absence of documents or evidence regarding the income of those working in the unorganized sector.

The current judgment from SC is a precedent and ensures more safety for people working in the unorganized sector in the country.