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Motor Insurance
ABC of Motor Insurance
Most of us own a motor vehicle; whether it is a two wheeler-a motor cycle or a four wheeler-a car.We also remember the day when we purchased it brand new from the show room.On that auspicious day of purchase the dealer of the show room had ensured that all essential formalities which are required to be completed for a new motor vehicle are completed; like insurance of vehicle and then through RTO its registration in the Government Transport Department by depositing the necessary road tax. RTO in turn allots a new Registration Number to the new vehicle. We presume that the story ends here. However it does not. A motor vehicle provides us the desired mode of conveyance and pleasure but simultaneously it also binds us with certain legal liabilities, while we use it. The motor insurance policy which we referred above may prove to be a boon if we always insure our vehicle and may be a matter of repentance if we do not insure. There are many court cases where in owners of uninsured vehicles have been fastened, with the liability of Millions of Rupees by the use of their vehicles in the unfortunate road accidents, involving third parties-death/disability/injury to the persons Hence let not the uninsured vehicle be your liability but an asset and the motor insurance policy be a protective umbrella for your well being. Follow these simple rules about the motor insurance to be a happy and proud owner of a motor vehicle:- (1).Motor Insurance policy of our vehicle is a mandatory requirement by Motor Vehicles Act 1988.Law prohibits us to take the vehicle on the road without a valid motor policy at any time. (2).Motor Policy of the vehicle is issued only for one year at a time and to keep it enforced it is essential that we get it renewed every year without any break in insurance period. (3).Renewal of motor policy can be done by either the insurance company who has initially insured the vehicle at the time of purchase or by any General Insurance Company in public or private sector. (4).There are two types of motor policies: one is called a Package Policy (Comprehensive Policy) which insures the Third Party risk as well as the damage and theft of the vehicle. Another policy is called a Motor Liability only Policy (Third Party Policy) which covers the death and injuries and property damage of third parties. At least a Third Party Policy is mandatory for every vehicle. Premium for the Third Party Policy is also much lesser than premium of a Package Policy. (5). Premium of the policy paid to the insurance company in every successive year comes down if there is no accident due to the benefit of No Claim Bonus in the policy and due to reduction in the Sum Insured of the vehicle in case of Package Policies. If the policy is not renewed within 90 days of its expiry then the benefit of NCB is lost. (6). As required by the law, motor vehicle owners have to carry with the vehicles the motor insurance certificate issued by insurance companies for inspection by police authorities on demand. (7).For renewal of motor policy, insured is required to visit the office of the insurance company well before the date of expiry premium in cash or by cheque and should obtain the necessary premium receipt/policy. Premium can also be paid by cheque by companies are not obliged to send the renewal notices of the policies to the insured. (8).Do not allow your motor vehicle to be driven by a person who does not possess a valid driving license; since it will not absolve you of your liability in case of accident involving third party. (9).As per Motor Vehicles Act a person less than 18 years of age is not authorised to drive a motor vehicle(Motor cycle,scooter,car).However, a person of 16 years (after attaining 16) of age can drive a motor cycle with engine capacity not exceeding 50 cc. A person under the age of 21 years of age is not authorised to drive a transport vehicle (Taxi,Auto,bus truck etc.) Do not drive after consuming liquor.Do not talk on mobile while driving. Maintain safe speed. Safety first, speed afterwards. (10).All motor vehicle owners/drivers are required to possess an effective and valid permanent driving license for the type of vehicle being driven while driving the vehicle. This is required as per Motor Vehicles Act 1988 and also a pre-requisite to make the claim under the motor policy. (11).While driving the vehicle, motor vehicle owners are also compulsorily insured in motor policy for personal accident for a sum of Rs. one lac in case of two wheelers and Rs. 2 lacs. in case of four wheelers. (12).In case of an unfortunate accident, involving your motor vehicle, inform the office of the insurance company quoting your vehicle number, policy number, place of accident, date and time of accident and follow the instructions of the insurance company regarding the survey and submission of documents. (13).Motor insurance policies can be bought online through internet. Please refer the websites of insurance companies for details of policies sold online & renewed online. Insurance customers may compare the premium rates, coverage, exclusions, terms & conditions of policies of different insurers before making a decision to buy a suitable policy. Following Insurance Companies sell motor policies online & also renew online to the customers via their respective website:Bajaj Allianz General Insurance Company Ltd-Car Insurance,ICICI Lombard General Insurance Company Ltd-Car Insurance,Two Wheeler insurance,Iffco Tokio General Insurance Company Ltd-Car Insurance,Two Wheeler insurance,Reliance General Insurance Company Ltd-Car Insurance,Two Wheeler insurance,Royal Sundaram Alliance Insurance Company Ltd-Car Insurance,Tata AIG General Insurance Company Ltd-Car Insurance,Two wheeler,Cholamandalam Ms General Insurance Company Ltd-Private Car Insurance,HDFC ERGO General Insurance Company Ltd-Private Car Insurance,The Oriental Insurance Company Ltd. Please visit our link LINKS to go to websites of non-life insurance companies for different motor insurance policies available in insurance market.
Motor Insurance & Claims
Motor Insurance Motor insurance is the most important insurance as a tool for the financial security of the owner of the vehicle if properly handled and can also be a cause of great nuisance and liability if regular renewals of motor policy are not arranged. Since the motor insurance consumers form the biggest segment of non-life insurance consumers in the country, insurance companies should come forward for increasing the awareness regarding importance of motor insurance amongst this class, which will also increase their motor business and would also bring reduction in their incurred loss. It is seen that the owners of motor vehicles have not prepared themselves with the important aspects and risks and liabilities associated with owning a valuable asset like motor vehicle procured with their hard earned money and importance and nitty-gritty of motor insurance. Motor Accidents India had in all more than seven crores and twenty seven lacs of vehicles as on March 2004 which is increasing at the rate of more than 15 % every year. The risks associated with motor vehicle can be imagined by the total no. of motor accidents reported in the year 2004-05, which was more than four lacs, thirty nine thousands, where in more than ninety four thousand persons died and more than four lac and sixty five thousand persons were injured. A total of more than eighty one thousand theft of vehicles were reported in the year 2004.Since the motor policy covers the unlimited third party liability of the insured, in the event of an unfortunate accident, involving third party claim, if the vehicle remains uninsured , the financial legal liability falls on the owner of the vehicle. Discounts in Premium The discount in motor own damage premium can be given by the insurers, to the insured who have a good claims free record should bargain for the maximum reduction in own damage premium with the insurers. This reductions in own damage premium is in addition to the No Claim Bonus (NCB) and other discounts which a consumer is entitled as per terms and conditions of motor policy. Owners of new vehicle can also bargain for the maximum discount in own damage premium depending upon their past history of driving and claims free experience. Third Party Insurance Insurers tend to deny the third party coverage only, to the motor vehicles particularly old and commercial vehicles and if reluctantly accept then charge higher premiums with loadings on one or other pretext. To mitigate the hardship faced by the motor insurance consumers, the IRDA vide their circular letter no.043/IRDA/De-Tariff/Jan-07 dated 23-01-07 has prescribed the motor third party premium rates applicable w.e.f. 01-01-07 and has also instructed all insurers not to deny the motor third party cover only, which is mandatory to motor owners. Types of Motor Policies It is very important to know about the various types of motor policies available in the general insurance market.The policy which is required mandatory as per Motor Vehicles Act 1988, to be purchased by every motor vehicle owner every year and so long the motor vehicle remains registered in his name and unless sold whether car, two wheeler or a commercial vehicle or a agriculture tractor or any other motor vehicle is called “Liability Only Policy”. The premium of this policy is the lowest whereas it covers unlimited third party liability of the insured. This policy covers the legal liability of the owner of the vehicle towards the death or injuries of the persons or damage to the property caused due to the use of his vehicle as mentioned in the policy. The other motor policy is called “Package Policy” which covers the risk of third parties as well as the risk of damage or loss to the owner’s motor vehicle caused by fire, self ignition, lightning, theft, riot and strike, earthquake, flood, hurricane, cyclone, hailstorm, frost, storm, terrorist activity, while in transit by road, rail, air or inland waterway, lift elevator, malicious act, landslide, rockslide and by accidental external means. Variant of above motor policies are also available like “Liability Only Policy with Fire and or Theft Risks”. While driving, the vehicle owner is compulsorily covered with personal accident insurance of Rs. 2 lacs of sum insured in case of private cars and commercial vehicles; and Rs. 1 lac in case of two wheelers. All motor policies, are issued only for one year and unless premium is paid in advance before the date of expiry of the policy; the benefits of the policy are lost. Hence it is very important that the renewal premium is paid in advance to the concerned policy issuing office and the necessary renewal premium receipt, certificate of insurance and policy is obtained. Renewal of Motor policy can also be arranged from any office of any general insurance company, located any where in the country. In some cases insurers issue a document called “Cover Note” in motor insurance which is required to be followed by issue of the policy and certificate. On sale and consequent registration in the name of new owner the package policy can be transferred to the new owner of the vehicle duly informing the insurer. However on transfer of the ownership of the vehicle the liability only cover automatically passes to the new owner. Package motor policies are insured for a sum which is called “Insured’s Declared Value” as per the policy conditions; which is arrived at every renewal after deducting prescribed depreciation. The premium is charged for IDV only. “No Claim Bonus” up to a maximum limit of 50 % is allowed only at the own damage portion of the premium if the policy is renewed within 90 days of expiry. Electrical or electronic additional fittings in the car can also be insured on payment of additional premium. Discounts in own damage premium are also available for voluntary deductibles, automobile association membership and anti-theft devices. Motor Own damage claims Whenever a claim is to be reported to insurance company either because the vehicle has met with an accident causing damages to the vehicle, theft of vehicle or accessories or injuries/death of third parties, it should be immediately done by telephone, e-mail and in writing quoting the policy/cover note no., vehicle registration no., date and time of accident, place of accident to the office of the insurer who has issued the policy. If the accident has taken at a place where the policy issuing office is not located then any nearest office of the concerned insurance company may also be intimated for deputing the surveyor for assessment of damages/loss. The fees and expenses of the surveyor for assessing the loss are paid by the insurance companies, hence insured is not required to make any payment to the surveyor in connection of his claim. In case of involvement of third parties in the accident and in theft claims, FIR is required to be lodged with the nearest police station requesting police authorities to furnish a copy of FIR. In major claims the spot survey of the vehicle is done by the surveyor at the place of accident. After the spot survey and in minor claims the vehicle should be removed from the place of accident and taken to the authorized workshop for detailed estimate, assessment of loss by the surveyor deputed by the insurance company and then repairs should be undertaken. The settlement of motor claims by the insurance companies is done as per the terms and conditions of motor policy applicable in the individual cases. In case of partial damage claims of vehicles the repair includes cost of parts replaced and labour charges. Generally full labour charges are paid if found reasonable. As for the parts is concerned, from the cost of the new parts replaced ,the depreciation is deducted as per policy conditions and also the cost of salvage of old parts is also deducted before arriving at the final payable amount of new parts. When the vehicle is damaged extensively and the cost of its retrieval and repairs is more than the 75 % of IDV, it is treated as total loss claim. In all such claims insurer offers the IDV less the cost of salvage if the damaged vehicle is retained by insured or else the insurer takes possession of salvage and settles the claim for IDV. In case of theft of the vehicle, the IDV or the sum insured is the payable claim amount. Motor Claims-Documents There are some important vehicular documents like driving licence, registration certificate, permit, fitness certificate, load challan/trip sheet; which may be required in the claims. Insured should ensure that the relevant documents of the vehicle are genuine and valid and are available with him. Claim form issued by the insurer is required to be submitted duly completed by the insured in all types of claims. If the accident occurred while driving the vehicle then the driving licence of the driver who was driving the vehicle at the time of accident is required. In case of theft of the car, a copy of FIR and Final Investigation Report of the police along with the original RC and ignition keys of the vehicle are required. Insured is advised in his own interest to keep record and copies of all vehicular and claim documents, correspondence made with insurance company for future use, if required. Insurers also depute an investigator for investigation of theft and third party claims, who is required to be given cooperation by the insured. He is paid investigation fees and expenses by the insurance company like a surveyor , hence is not required to be paid any amount by the insured. In case of partial loss claims, the estimate of the repairs and bills of parts and labor charges are required. Insurance company is liable only for the parts damaged and labor charges directly necessitated by the accident and not for any other replacement of parts and labor charges claimed by the motor workshop/insured. Third Party Claims In case of third party claims whenever a summon is received by the insured from the Motor Accidents Claims Tribunal/courts, the intimation of the same and all cooperation is required to be given to the insurance company. |
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