MOTOR INSURANCE PRESENTED BY- RAMZAN SHAH MS INSURANCE, NLU, JODHPUR
MOTOR INSURANCE
PRESENTED BY- RAMZAN SHAH MS INSURANCE, NLU, JODHPUR
First started in U.K. 1894- first motor car was introduce in U.K. 1895 – first motor car insurance introducing in
U.K. For T.P. 1899 – comprehensive policy covering
accidental damages to the car was introduce. 1903 – car & general insurance corp. Ltd. Was
established to transact motor insurance followed by other cos.
MOTOR INSURANCE - HISTORY
In India M.V. Act was passed in 1939 making
law for compulsory T.P. Insurance. It was governed by tariff till march-2008. Practices of motor insurance in India follows
U.K. Market. M.V. Act 1939 was replaced by M.V. Act –
1988(act no.-59 of 1988 act) & was made effective from 01.07.1989.
MOTOR INSURANCE - HISTORY
MOTOR INSURANCE IS A COMBINATION OF
TWO WORDS I.E. ‘MOTOR + INSURANCE’ MOTOR UNDER THE MOTOR VEHICLE ACT IS A
SELF-PROPELLED VEHICLE INSURANCE WE ALREADY KNOW IS
PROTECTION AGAINST ANY ‘UNFORESEEN RISK’
THE ‘UNFORESEEN RISK’ IS AN INCIDENT, WHICH CAN’T BE FORESEEN I.E. WHICH MAY OR MAY NOT HAPPEN I.E.
WHAT IS MOTOR INSURANCE?
A) IT MAY RESULT IN TO EITHER CREATION OF LIABILITIES
OR
B) WILL RESULT IN TO FINANCIAL LOSSES:
INJURIES/DEATH TO PERSON/S AND
DAMAGE TO PROPERTY.
(LIABILITIES)
DAMAGE TO THE VEHICLE ITSELF AND
THEFT OF PARTS OR THE THEFT OF THE VEHICLE ITSELF.
(FINANCIAL LOSSES)
WHAT IS MOTOR INSURANCE?
THE POLICY WHICH IS MANDATORY TO BE
TAKEN IN ORDER TO MEET THE REQUIREMENT OF THE MOTOR VEHICLE ACT IS, ‘LIABILITY ONLY POLICY’ AND
THE SECOND POLICY IS THE CHOICE OF THE OWNER OF THE VEHICLE I.E. HE MAY OR MAY NOT TAKE THIS POLICY, KNOWN AS, ‘PACKAGE POLICY’.
TYPES OF POLICIES
GLOBALLY MOTOR INSURANCE IS THE BIGGEST AND
FASTEST GROWING GENERAL INSURANCE PORTFOLIO AND INDIA IS NO EXCEPTION TO IT.
IT ACCOUNTS FOR MORE THAN 45% OF THE TOTAL GENERAL INSURANCE PREMIUM INCOME IN INDIA
IN THE YEAR ENDING 2012, TOTAL NONLIFE PREMIUM OF THE INDUSTRY WAS ABOUT 58,326 CRORES OUT OF WHICH MOTOR SHARE WAS ABOUT 24,156 CRORES
HOWEVER MOTOR BUSINESS WAS 25 CRORES ONLY AT THE TIME OF NATIONALIZATION.
INTRODUCTION
Segment- Wise gross Non - life Insurance premium for the last seven financial years, i.e. from 2005 - 06 to 2011 -12
(GDP : INR crores) (Unaudited & Tentative)
Segment
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Fire 3750 4163 3505 3436 3945 4644 5535
Cargo 783 886 1041 1156 1264 1544 1846
Hull 513 748 779 836 923 997 1003
Engg. 975 1374 1433 1574 1679 1908 2296
Motor OD 6122 7580 8083 8379 9445 11761
14336
Motor TP 2644 3098 4714 5105 5784 6363 9820
Health 2222 3210 5110 6634 8338 11145
13325
Aviation 405 417 304 365 410 462 481
Liability 397 464 606 715 864 1022 1237
PA 580 619 791 923 953 1140 1374
Others 2619 3074 3351 3629 4786 5996 7098
Total 21010 25634 29718 32751 38391 46999
58326
SEGMENT WISE NON LIFE PREMIUM
SOME OF THE FACTORS RESPONSIBLE FOR THIS
GROWTH ARE: INCREASE IN EARNING CAPACITY OF INDIVIDUAL CHANGE IN PRIORITIES OF LIFE EXPLOSIVE GROWTH OF AUTOMOBILE INDUSTRY NEWER MODELS BEING INTRODUCED IN INDIA
AND IN THE WORLD, THE COSTLIER ONES AND THE CHEAPEST VERSIONS AND
INTRODUCTION OF CHEAP AUTO LOANS.
INTRODUCTION
COSTLIEST CAR IN INDIA
CHEAPEST CAR IN INDIA
IN 1951, THERE WERE 3,00,000 MOTOR
VEHICLES THROUGHOUT INDIA THE ROAD NETWORK AT THAT TIME WAS OF
4,00,000 KILOMETERS BY THE YEAR ENDING 2011, THE NUMBER OF
VEHICLES HAS GONE UP BY 472 TIMES, WHERE AS
ROAD NETWORK HAS EXPANDED BY 11 TIMES ONLY.
GROWTH
IN INDIA THE VEHICLE POPULATION HAS ALREADY
CROSSED 14 CRORES COMPRISING OF THE FOLLOWINGS:
TWO WHEELERS: 9 CRORES MOTOR CARS : 3 CRORES COMMERCIAL : 2 CRORES AND
ABOUT 90 LAKH MOTOR VEHICLES (ALL TYPES) ARE BEING ADDED ON INDIAN ROADS EVERY YEAR
GROWTH
ABOUT 300 PERSONS ARE BEING KILLED ON ROAD
ACCIDENTS DAILY AND ABOUT 10,00,00 ARE BEING INJURED ANNUALLY AND
THE INCIDENCE OF ROAD ACCIDENTS TO NUMBER OF VEHICLES IN INDIA IS ALARMINGLY HIGH IN COMPARISON TO DEVELOPED COUNTRIES:
THE NUMBER OF ROAD ACCIDENTS PER 10,000 VEHICLES IN INDIA IS ABOUT 120 AS AGAINST 10 IN THE DEVELOPED COUNTRIES OF THE WORLD
THE NUMBER OF DEATHS PER 10,000 VEHICLES IN INDIA IS 55 AS AGAINST 2 IN THE WEST.
ACCIDENTS
IN 1990, TRAFFIC ACCIDENTS WERE WORLD’S NINTH
BIGGEST CAUSE OF DEATH AND IT IS EXPECTED TO BECOME THE THIRD BIGGEST BY 2020.
STUDY UNDERTAKEN BY THE ‘WORLD HEALTH ORGANIZATION’ REVEALS THAT ROAD ACCIDENTS ARE THE SECOND AND
THIRD BIGGEST CAUSE OF DEATH IN THE AGE GROUP OF 5-29 AND 30-44 YRS. RESPECTIVELY.
THE INDIAN SITUATION IS AMONGST THE WORST IN THE WORLD I.E.
SHARE OF ROAD FATALITIES IS AROUND 86%. AGAINST 40% SHARE OF VEHICLE POPULATION.
ACCIDENTS
During the calendar year 2010, there were close to 5 lakh road accidents in india, which resulted in more than 1.3 lakh deaths and inflicted injuries on 5.2 lakh persons. Thses number translates into one road accident every minute, and one road accident death every four minutes.
-MINISTRY OF ROAD TRANSPORT AND HIGHWAYS
ACCIDENTS
World’s Costliest Car-Bugatti Veyron
Before and after the accident
IT IS THEREFORE NATURAL THAT IN A
SITUATION LIKE THIS I.E. THE WIDESPREAD USE OF VEHICLE BY THE COMMON MAN
MANY VEHICLE OWNERS AND USERS MAY NOT HAVE THE REQUISITE FINANCIAL CAPABILITIES OF
COMPENSATION TO THE VICTIMS OF THE ROAD ACCIDENT.
IMPLICATIONS
THE MOTOR VEHICLE ACT HAS THEREFORE MADE
THE THIRD PARTY INSURANCE COMPULSORY IT IS A PUNISHABLE OFFENCE TO USE THE
VEHICLE WITHOUT INSURANCE NECESSARY PROVISIONS FOR ITS ENFORCEMENT
ARE THEREFORE ARE AVAILABLE WITH THE AUTHORITIES:
FAILURE TO COMPLY THE PROVISIONS OF SEC.146 OF THE MV ACT IS PUNISHABLE BY AN IMPRISONMENT OF THREE MONTHS OR A PENALTY OF RS. 1000 OR BOTH (SEC.196 OF THE MV ACT).
REMEDIES
THE MANDATORY PART OF THE MOTOR
INSURANCE IS KNOWN AS ‘THIRD PARTY INSURANCE’ THIS INSURANCE WAS FORMED ON THE BASIS
OF MOTOR VEHICLE ACT THE POLICY IS BEING ISSUED IN
ACCORDANCE WITH THE PROVISIONS OF THE M. V. ACT, IS NOW CALLED AS THE ‘LIABILITY ONLY POLICY’ & THE COVERAGE’S PROVIDED ARE:….
MANDATORY INSURANCE
DEATH OF OR BODILY INJURY TO ANY PERSON
INCLUDING OCCUPANTS (PROVIDED SUCH OCCUPANTS ARE NOT CARRIED FOR HIRE OR REWARD) AS PER MOTOR VEHICLES ACT, 1988.
THE COMPANY SHALL NOT BE LIABLE FOR DEATH OR INJURY ARISES OUT OF AND IN THE COURSE OF THE EMPLOYMENT
DAMAGE TO PROPERTY OTHER THAN PROPERTY BELONGING TO THE INSURED OR HELD IN TRUST/ CUSTODY OR CONTROL OF THE INSURED
ALL COSTS AND EXPENSES INCURRED WITH ITS WRITTEN CONSENT.
LIABILITIES TO THIRD PARTY
Loss or Damage to your vehicle against Natural Calamities
Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.
Loss or Damage to your vehicle against Man-made Calamities Burglary, theft, riot, strike, malicious act, accident by
external means, terrorist activity, any damage in transit by road, rail etc.
Personal Accident Cover Coverage for the individual driver of the vehicle while
travelling, mounting or dismounting from the car. Optional personal accident covers for co-passengers.
Third Party Legal Liability Protection against legal liability due to accidental damages
resulting in the permanent injury or death of a person, and damage caused to the surrounding property.
Comprehensive Policy: Coverage
Normal wear and tear and general ageing of the vehicle. Depreciation or any consequential loss. Mechanical/ electrical breakdown. Wear and tear of consumables like tyres and tubes unless
the vehicle is damaged at the same time, in which case the liability of the company shall be limited to 50% of the cost of replacement.
Vehicles including cars being used otherwise than in accordance with limitations as to use.
Damage to/ by a person driving any vehicles or cars without a valid license.
Damage to/ by a person driving the vehicle under the influence of drugs or liquor.
Loss/ damage due to war, mutiny or nuclear risk
Comprehensive Policy: Exclusions
THE INDIAN MOTOR TARIFF REVISED W.E.F.
1ST JULY 2002, FOR THE PURPOSES OF INSURANCE
HAS CLASSIFIED THE MOTOR VEHICLES BROADLY INTO THREE CATEGORIES WITH FURTHER SUB CLASSIFICATION VIZ.
PRIVATE CARS MOTORIZED TWO WHEELERS AND COMMERCIAL VEHICLES.
TYPES OF VEHICLES
PRIVATE CARS
TWO WHEELERS
COMMERCIAL VEHICLES
TYPE OF LOSSES: TOTAL LOSS (ACCIDENTAL) WHEN INSURED VEHICLE IS DAMAGED TO THE EXTEND THAT
REPAIRS IS UNECONOMICAL TO THE COMPANY OR COST OF RETRIEVAL EXCEEDS THE IDV.
IF ASSESSED VALUE OF THE LOSS EXCEEDS 75% OF IDV TOTAL LOSS (THEFT) WHEN PHYSICAL PRESENCE OF VEHICLE IS NOT THERE I.E. VEHICLE
IS STOLEN. PARTIAL LOSS (ACCIDENTAL) REPAIRABLE LOSS OCCURRING DUE TO AN INSURED PERIL. PARTIAL LOSS (THEFT) THEFT OF PARTS/ ACCESSORIES. ACCESSORIES COVERED ONLY IN PRIVATE CARS.
CLAIMS
IMMEDIATE NOTICE OF LOSS IN WRITING TO
BE GIVEN FOR ACCIDENTAL LOSSES, ESTIMATE OF
REPAIRS AND CLAIM FORM TO BE SUBMITTED FOR LOSS DUE TO THEFT OF VEHICLE, A COPY OF F.I.R. ALONG WITH A CLAIM FORM
TO BE GIVEN TO APPOINT A SURVEYOR FOR ASSESSMENT
OF LOSS/ AN INVESTIGATOR TO INVESTIGATE THE THEFT…..
CLAIM PROCEDURE
ORIGINAL R/C, D/L TO BE PRODUCED REPAIRS CAN BE STARTED IN CASE OF PARTIAL
LOSS, AFTER INITIAL VERIFICATION BY SURVEYOR’S CLAIMS ARE SUBJECT TO COMPULSORY EXCESSES IN CASE OF TOTAL LOSS, LIMIT OF LIABILITY WILL
BE IDV ANY DISPUTE REGARDING ‘QUANTUM’ OF CLAIM
AMOUNT HAS TO BE REFERRED TO AN ARBITRATOR TIME LIMIT FOR FILING A SUIT AFTER DISCLAIMER
IS 12 MONTHS FROM DATE OF SUCH DISCLAIMER
CLAIM PROCEDURE
THANKS