Motor insurance

Motor insurance
 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

 Motor insurance
• Principles of Insurance
• Utmost Good Faith
• Insurable Interest
• Principle of Indemnity
• Principle of Contribution
• Principle of Subrogation
• Principle of loss Minimization
• Principle of ‘CAUSA PROXIMA’
 Motor insurance
• Motor insurance provides mainly two
types of policies :
– Liability only or Act only or TP policy
– Package or Comprehensive Policy
 Motor insurance
• Liability cover :
– Third party death or bodily injury.
– Third party property damage.

– Personal Accident cover to owner/ driver death.

– Personal accident cover to owner/ driver injury.

– Total compensation not to exceed 1 lakhs in two

wheelers and 2 lakhs in case of other vehicles.
(exclusions as per pa policy)
 Motor insurance
• Comprehensive policy includes the below in
addition to liability only policy covers:

– Fire, Explosion, Self ignition, Lightening.

– Burglary, housebreaking or theft.
– By riot and strike.
– By Earthquake.
– By flood, typhoon, hurricane, storm, cyclone, tempest
inundation, hail storm, frost.
– By accidental external means.
– By malicious act.
– By terrorist activity.
– While in transit by road, rail, inland water way, lift,
elevator or air.
 Motor insurance
• Exclusions :
– 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
 Motor insurance
OWN 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 records are
to be submitted to Office fo final surveyor.
• Final surveyor appointed as per financial authority
 Motor insurance
• OWN 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.
Motor insurance
 Motor insurance
• TERMS 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