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Motor Insurance frequent questions

February 13, 2018

Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured.

Motor insurance policies cover against any loss or damage caused to the vehicle or its accessories due to the following natural and man made calamities.

Natural Calamities: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.

Man made Calamities: Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, elevator or air.

Motor insurance provides compulsory personal accident cover for individual owners of the vehicle while driving. One can also opt for a personal accident cover for passengers and third party legal liability.

Third party legal liability protects against legal liability arising due to accidental damages. It includes any permanent injury / death of a person and damage caused to the property.

  • Protection from a financial loss arising out of loss or damage to your vehicle.
  • Protection from liability towards third parties for personal injury.
  • Protection against death and property damage on account of any accident involving your vehicle.
  • What is the significance of vehicular documents in motor insurance claims?

The provisions of the Motor Vehicles Act largely influence motor insurance. Offences relating to vehicular documents can affect the contract of insurance adversely.

If the certificate of insurance is not valid at the time and date of accident, there is no question of claim under the policy, as the risk would have operated beyond the period of insurance. Just imagine the fate of the owner of a vehicle in case he does not have a valid policy and fatally injures a pedestrian by accident.

The certificate of registration not only proves ownership of the vehicle but also gives it an identification number. If the vehicle is not registered in a person’s name, he cannot be rightfully the owner of the same.

He is therefore not entitled to claim any insurance money arising on account of accident to the vehicle.

When a vehicle is sold, the buyer should necessarily get the ownership transferred in his name by means of a transfer endorsement in the RC book. Intimation should be given to the insurance company also to endorse the insurance policy accordingly.

The driving license is a very important document. The insurance companies by means of a warranty in the policy specifically mention that the company shall not be liable to pay any loss or damage arising out of an accident, if at the material time the driver was not holding a valid and effective driving license.

Valid means that the driver should possess the license entitling him to drive that particular type of vehicle. A person holding a driving license to drive a car is not entitled to drive a motor cycle.

Effective it means that the license should be in force. If any of these conditions are not satisfied the driving license is treated to be invalid and claims if made are rejected by the insurance companies.

A learner’s license is said to be valid and effective, if an “L” board, according to specifications of the Act, is installed in the front and rear of the vehicle, and a person holding a valid and effective driving license of the vehicle being driven, is seated beside the holder of the learner’s license.

The permit is a document issued to commercial vehicles authorizing its use and route. Normally we find the words ‘National Permit’ written on the hood of trucks or buses.

What extension of cover can be obtained with regard to private car?

The following are the prominent extra risks that can be covered in addition to the standard cover:
Personal accident of insured, spouse and unnamed passengers
Legal liability of the employees of the insured
Wider Legal Liability to Drivers

How much would the insurance company pay in the event of an accident?

. In case of an accident, the insurance company pays for cost of damaged parts which are replaced and the labour cost towards repair cost of the vehicle. As per the revised regulations, depreciation is not deducted from the cost of the parts except for the tires and tubes for which 50 percent depreciation is deducted.