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The Insurance Regulatory and Development Authority of India (hereinafter as IRDAI) is a national level regulatory agency for the insurance industry in India. It was established in the year 1999 by the virtue of Section 3 of the IRDAI Act, 1999. The IRDAI's primary responsibilities include regulating the insurance industry, protecting policyholders' interests, promoting competition in the insurance market, and developing the insurance sector in India.

The IRDAI being the statutory and the regulatory authority in the matters concerning insurance disputes, it may also adjudge disputes concerning claim repudiation. The expression ‘Claim Repudiation’ concerns a situation where an insurance company denies a claim made by a policyholder. This typically occurs when the claim is based on conditions or losses that are not covered under the policy, and for the discussion it may also concern losses occurring due to alcoholism. In the cases referring to claim repudiation, the insurer is not required to pay the claim, as it falls outside the scope of the policy's coverage. 

Alcoholism is a chronic, progressive disease characterized by a strong craving for alcohol and the inability to control one's drinking. Numerous studies and news show that alcoholism leads to serious health problems, including liver disease, pancreatitis, neuropathy, and an increased risk of cancer. This further leads to higher health insurance premiums due to the increased risk of health problems associated with alcohol abuse. Moreover, if a person suffers from alcoholism, it may create barriers for him to get a life insurance, as insurers may view someone with a history of alcoholism as a higher risk. 

Now, let us examine the affect of alcoholism in the light of some specific kinds of insurance agreements currently existing: - 

Life Insurance

Life insurance is designed to provide financial protection for the loved ones of the policyholder in the event of the policyholder's death. This protection is often in the form of a monetary death benefit, which is paid to the designated beneficiaries upon the policyholder's death. Whether the Life insurance will cover a death due to alcoholism will depend on the specific terms particularly the exclusions of the policy. But it is important to note that insurers may be hesitant to issue policies to individuals who engage in risky behaviors such as heavy alcohol consumption or drug abuse. 

As a result, Individuals who have a history of alcoholism may be charged higher amount of premiums. If the policyholder has not disclosed these habits when applying for a life insurance policy, the insurer may choose to deny the death benefits to the beneficiaries as the insurance as a doctrine works upon the principles of good faith and of unfolding the truth. It is therefore crucial to accurately disclose any potentially relevant information first hand when applying for life insurance, including any history of alcohol consumption, to ensure that the policy remains valid and the death benefit will be paid to the beneficiaries as intended.

The apex court while adjudicating in the case of Narbada Devi vs H.P. State Forest Corp.& ANR.(2021 SCC Online SC 242), observed that: - 

"The facts of the present case show that on the night before his death, the deceased was heavily drunk, and had gone and slept outside on a cold, rainy October night in Chopal. In case of excessive drinking and cold weather, asphyxia is the final medical complication. Therefore, the learned counsel for the Insurance Company submitted that the Appellants’ claim is not maintainable under the Insurance Policy conditions, particularly Proviso 4...The relevant Proviso 4 of the insurance policy reads thus: 'PROVISOS Provided always that the company shall not be liable under this policy to: 4) Payment of compensation in respect of death, injury or disablement of the insured from (a) intentional suicide or attempted suicide, (b) whilst under the influence of intoxicating liquor or drug (c) or by insanity, (d) arising or resulting from the insured committing any breach of the law with criminal intent.' The aforesaid Proviso 4 makes it amply clear that the injured is not entitled to compensation since on facts it is proved that he was intoxicated and that was due to intoxication."

Health Insurance

Most health insurance policies in India do not cover treatment for alcoholism, drug or substance abuse related issues. 'IRDAI Guidelines on Standardization of Exclusions in Health Insurance Contracts' specifically excludes "Treatment for, Alcoholism, drug or substance abuse or any addictive condition and consequences thereof." Therefore, complying with the IRDAI the insurance companies do not associate with the above-mentioned. 

Motor Insurance

Numerous motor insurance policies exclude damages caused by a person driving under the influence of liquor or drugs from the scope of coverage. This means that if an accident occurs while the driver is intoxicated with alcohol or whatsoever, IRDAI Guidelines on Standardization of Exclusions in Health Insurance Contracts the insurance policy will not cover the damages. This exclusion is included in the terms of almost all motor insurance policies in India. It is important for policyholders to understand the terms of their motor insurance coverage, including any exclusions or limitations, in order to determine what expenses will be covered and how much they will have to pay out of pocket in the event of an accident.

Further, in the case of IFFCO-Tokio General Insurance v. Pearl Beverages Ltd. ((2021) 7 SCC 704); the Hon'ble Supreme Court held that a breath analyzer or blood test as examined under the Motor Vehicles Act is not compulsory for an insurer to renounce an accident policy claim based on drunken driving. While setting the jurisprudence upon the issue the court further observed: -

“It is not difficult to contemplate that the accident may take place with the driver being under the influence of alcohol and neither the Breath Test nor the laboratory test is done. A driver after the accident, may run away. A test may never be performed. However, there may be evidence available which may indicate that the vehicle in question was being driven at the time of the accident by a person under the influence of alcohol...What is in a summary proceeding noteworthy, is in the setting of the width of the road (a road near India Gate, New Delhi) and the thinnest possible traffic, and without the slightest excuse, hitting at the footpath with massive force, not being able to maintain control, hitting the electric pole, the wall of the children park. The impact is so much that it led to the overturning of the car and what is more, catching fire of the vehicle. This accident is inexplicable, if the driver is to be believed as PW2, when he deposed 'I was in my full senses and capable of exercising full control over the car, at the time of the accident'. It is more probable that his drink, really led to it. "

In conclusion, it is most relevant to say considering the judgments of the Indian courts and the stance if IRDAI, with respect to its guidelines that neither the authority nor the SC entertain the claims wherein the insurer has backed out or taken the advantage of the exclusion clause in the insurance agreement. 

References:

https://www.livemint.com/money/personal-finance/can-you-make-a-claim-on-your-motor-insurance-policy-if-you-ve-consumed-alcohol-under-permissible-limits-1569048168586.html

https://www.tataaia.com/blogs/life-insurance/will-drinking-affect-my-insurance-policy.html

https://zeenews.india.com/personal-finance/sc-rules-out-insurance-claim-to-kin-of-a-man-who-died-due-to-excessive-alcohol-consumption-2349733.html