Motor Insurance

To have a better and more sustainable tomorrow having insurance is a must that saves from the uncertainty of the future. Having a secured future is our core aim and we assist our clients to manage the investment made in insurance.

What Motor Insurance is

Motor insurance gives protection to the vehicle owner against (I). damages to his/her vehicle and (ii). pays for any Third-Party Liability determined as per law against the owner of the vehicle. Third Party Insurance is a statutory requirement. The owner of the vehicle is legally liable for any injury or damage to third party life or property caused by or arising out of the use of the vehicle in a public place. Driving a motor vehicle without insurance in a public place is a punishable offence in terms of the Motor Vehicles Act, 1988.

To have a better and more sustainable tomorrow having insurance is a must that saves from the uncertainty of the future.

Types of Motor Insurance cover

Broadly there are two types of insurances policies that offer motor insurance cover:

Remember that if you take only a Liability Only Policy, damage to your vehicle will not be covered. Hence, it would be prudent to take a Package Policy which would give a wider cover, including cover for your vehicle.

What Motor Insurance covers

The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy:

  • Fire, Explosion, Self- Ignition, Lightning
  • Burglary/Housebreaking / Theft
  • Riot & Strike
  • Earthquake
  • Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost
  • Accidental external means
  • Malicious Act
  • Terrorism acts
  • While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air
  • Land slide / Rock slide

What Motor Insurance excludes

The following contingencies are usually excluded under the Motor Insurance Policy

  • Not having a valid Driving License
  • Under Influence of intoxicating liquor/drugs
  • Accident taking place beyond Geographical limits
  • While Vehicle is used for unlawful purposes
  • Electrical/Mechanical Breakdowns.

Basis of Sum Insured

For Own Damage:

The Sum Insured under a Motor Insurance policy reflects the value of the motor vehicle determined based on the concept known as Insured’s Declared Value. Insured’s Declared Value is the value arrived at based on the Manufacturer’s present value and depreciation based on the Age of the Vehicle.

For Third Party:

Coverage is as per requirements of the Motor Vehicles Act, 1988. Compulsory Personal accident cover for owner -driver is also included. Policy can also be extended to cover various other risks like Personal Accident to occupants of vehicle, Wo r k m e n's Compensation to Driver, etc. over and above the cover available to him under statute.

No Claim Bonus:

No Claim Bonus (NCB) is the benefit accrued to an insured for NIL claims during the previous policy period. As per current norms prevalent, it ranges from 20% on the Own Damage premium (and not on Liability premium) and progressively increases to a maximum of 50% based on successive claim free years.

If, however, a claim is lodged, the No claim Bonus is lost in the subsequent policy period.

NCB is given to insured and not to the insured vehicle. Hence, on transfer of the vehicle, the insurance policy can be transferred to new owner but not the NCB. The new owner has to pay the difference on account of NCB for the balance policy period. The original owner can, however, use the NCB on a new vehicle purchased by him provided he has not transferred the insurance to the buyer of old car. Insurance Co has to be intimated immediately (in any case not later than the time limit prescribed) about sale of his old vehicle and his intention to retain the insurance. Original certificate of Insurance is to be surrendered to Insurance Co. within 3 years period, as and when the Insured buys a new car, it will be substituted in the old insurance policy till its validity period. Pro-rata difference of premium on account of increase in IDV of new vehicle is to be paid.

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