Motor insurance in india

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Motor insurance

• Introduction• Types of policies• All India Motor Tariff• Own Damage claims• Review

united india ins.co.ltd. bn


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Motor insurance


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Motor insurance

• Insurance : Insurance is the pooling of premium and sharing of losses.

• Insurer : The party to an insurance arrangement who under takes to indemnify for losses.

• Insured: A person whose interests are protected by an insurance policy.

• Premium: Financial cost of obtaining• an insurance cover, paid as a lump • sum.

• Policy: Written contract or certificate• of insurance


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Motor insurance

• Utmost Good Faith

•Insurable Interest

•Principle of Indemnity

•Principle of Contribution

•Principle of Subrogation

•Principle of loss Minimization

•Principle of ‘CAUSA PROXIMA’

Principles of Insurance

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Motor insurance

Motor insurance provides mainly two types of policies :

a. Liability only or Act only or TP policy

b. Package or Comprehensive Policy



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Motor insuranceLiability cover :

• 1a. Third party death or bodily injury.• 1b. Third party property damage.

• 2a.Personal Accident cover to owner/ driver death.

• 2b.Personal accident cover to owner/ driver injury.

• 2c. Total compensation not to exceed 1 lac in two wheelers and 2 lac in case of other vehicles.(exclusions as per pa policy)


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Motor insurance

• Comprehensive policy includes the below in addition to liability only policy covers:

a. Fire, Explosion, Self ignition, Lightening.b. Burglary, housebreaking or theft.c. By riot and strike.d. By Earthquake.e. By flood, typhoon, hurricane, storm, tempest, inundation,

cyclone, hail storm, frost.f. By accidental external means.g. By malicious act.h. By terrorist activity.i. While in transit by road, rail, inland water way, lift, elevator or air.


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Motor insuranceExclusions :

• Contractual liability.

• War perils nuclear perils .

• Consequential loss, Depreciation ,Wear and tear ,mechanical or electrical break down.

• Damage suffered due to driving the vehicle under the influence of intoxicating liquor or drugs.

• Claims arising outside the geographical area specified in the policy.

• Claims arising whilst the vehicle is used in contravention of the limitations as to use.

• Claims arising when the vehicle is driven by a person without valid driving license


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Motor insuranceHistory:

1939

•First Motor Vehicle Act was passed to make TP insurance compulsory. MV Act 1939.

1988

•MV Act of 1988 replaced the 1939 act and came into force from 1.7.1989.

1988 act

•Chapters X, XI, XII of MV act deal with mandatory TP insurance of Motor Vehicles.

•Exemption : Vehicles operated by Central, State Govt & Local authority for govt. purpose are exempted.


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Motor insurance

MOTOR VEHICLES

PRIVATEVEHICLES

TWO WHEELERS PVT CARS

COMMERCIALVEHICLES

GOODS CARRYING

PASSENGER CARRYING

MISC. VEHICLES

MOTOR TRADE


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Motor insurance

Commercial Vehicles :

GOODS CARRYING VEHICLES

• Private carriers• Public carriers• Trailers

PASSENGER CARRYING VEHICLES

• Buses• Taxies• Auto rickshaws

MISC. TYPE OF VEHICLES

• Ambulances• Agri. Tractors etc

MOTOR TRADE

• Road risks• Road transit risks• Motor trade

internal


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Motor insurance


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Motor insuranceINDIA MOTOR TARIFF :

• SECTION 1. General Regulations (GR) • SECTION 2. Tariff for Private Car • SECTION 3. Tariff for Motorised Two–Wheelers • SECTION 4. Tariff for Commercial Vehicles

» A. Tariff for Goods Carrying Vehicles » B. Tariff for Trailers » C. Tariff for Vehicles used for Carrying Passengers for Hire or

Reward » D. Tariff for Miscellaneous and Special Type of Vehicles » E. Tariff for Motor Trade - Road Transit Risks » F. Tariff for Motor Trade - Road Risks » G. Tariff for Motor Trade - Internal Risks

• SECTION 5. Proposal Forms • SECTION 6. Standard Wordings in respect of Policy including Premium

Computation Table and Certificate of Insurance Cover Note • SECTION 7. India Motor Tariff (IMT) Endorsements • SECTION 8. Statistical Codes


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Motor insuranceImportant General Regulations (GR):• GR 2: Proposal forms are required• to be submitted.

• GR 3: Policy is to be issued only as• per standard fomat.

• GR 4: Extension of Geographical Area: Policy can be extended to include Bangladesh, Burma, Nepal, Pakistan, Srilanka, Maldives by charging extra premium.

• GR 5:Vintage Cars :Cars manufactured before 31.12.1940 are termed as Vintage cars.

• GR 6: Classic cars: Cars manufactured after31.12. 1940 but before 31.12.1970 are termed as classic cars.


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Motor insuranceImportant General Regulations (GR):

• GR 7: Agreed value policies for Vintage Cars.

• GR 8:IDV :Insured’s declared value will be the sum insured for the vehicle. Is applicable for Total Loss and Constructive total Loss.

• GR 9: Depreciation to be applied on parts.

• GR 10 : Geographical Zones: For the purpose of rating the country has been divided into Geographical Zones.

• GR 16: Stipulates the minimum premium.

• GR 17 :Transfer of Policy. On transfer of ownership Liability cover is deemed to be transferred automatically. For OD cover an application to be given within 14 days from the date of tfr. Endt. To be passed and Rs.50/- to be charged.


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Motor insuranceImportant General Regulations (GR):

• GR 19,20,21:Hire purchase agreement, Lease agreement, Hypothecation agreement. Vehicle to be in the name of regd. Owner and necessary endt. attached.

• GR 22 : Covernote. To be as specified.

• GR 23 : Certificate of Insurance. To be as specified.

• GR 24 : Cancellation of insurance and double insurance.

• GR 27 : No Claim Bonus : NCB allowed upto 90 days.


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Motor insuranceImportant General Regulations (GR):• GR 27 : contd..

_ Ncb follows the insured not the vehicle.

_To claim ncb policy has to run for 12 months.

_Ncb can be given only at the time of renewal.

_Ncb is calculated only on OD premium.

_If the renewal is from other insurer ncb can be allowed to insured basing on a declaration from him saying that he has not made any claims and is eligible for ncb. Present insurer has to write to the previous insurer and obtain confirmation of ncb.


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Motor insuranceImportant General Regulations (GR):• GR 36 :• a. Compulsory Personal Accident cover for owner-driver. In case of

two wheeler Rs.1 lac for other vehicles Rs.2 lacs. He must have an effective driving license.

• b. Optional PA cover for persons other than owner-driver.

• GR 39 :TPPD cover. The statutory limit is Rs.6000/- as provided in MV Act. However option available to opt for higher limits of Rs.1 lac for two wheelers and Rs.7.50 lacs for other vehicles.

• GR 40 :Compulsory deductibles : It is the amount deducted from own damage claim. The amount to be deducted depends upon the class of vehicle.


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Motor insuranceOWN DAMAGE CLAIMS :• Insured should contact the policy issuing Office. • If the damages are of major nature and if there are tp

injuries/death, intimation should be given to police authorities.

• Office may arrange for a spot survey if the damages are of major nature. Then the vehicle may be shifted to a garage for repairs.

• Estimation of repairs, claim form, policy details and vehicle records are to be submitted to Office for appointment of final surveyor.

• Final surveyor appointed as per finanancial authority (BO,DO,RO,HO).


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Motor insuranceOWN DAMAGE CLAIMS (contd):

• Final surveyor visits the garage discusses with repairer, owner of the vehicle and prepares assessment.

• Assessment of surveyor is a recommendation of claim amount.

• The assessment can be on repair basis, Total Loss or Constructive total loss.

• Bills are given by insured then the payment is made either to insured or garage.


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Motor insurance


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Motor insuranceTERMS USED :• TP : THIRD PARTY• OD : OWN DAMAGE• TPPD :THIRD PARTY PROPERTY DAMAGE• TPD : THIRD PARTY DEATH• TPI :THIRD PARTY INJURY• MV ACT : MOTOR VEHICLE ACT• PCV : PASSENGER CARRYING VEHICLE• GCV : GOODS CARRYING VEHICLE• NCB : NO CLAIM BONUS• IDV : INSURED’S DECLARED VALUE• DEDUCTIBLES :AMOUNTS DEDUCTED FROM CLAIM



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• Bhyravanath, Bancassurance Division, Hyderabad.

Motor insurance in india

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