Vehicle_Insurance

8/6/2019 Vehicle_Insurance

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1. General or Social Definitions:

The general definitions are given by social scientists and they

consider insurance as a device to protect against risks, or a provisionagainst inevitable contingencies or a cooperative device of spreading

risks.

According to John Magee, Insurance is a plan by which large

number of people associate themselves and transfer to the shoulders of

all, risks that attach to individuals.

According to Boon and Kurtz, Insurance is a substitution for a

small known loss (the insurance premium) for a large unknown loss

which may or may not occur.

2.Functional/Economical/Business Definitions:

These definitions are based on economic or business oriented since

it is a device providing financial compensation against risk or

misfortune.

According to Federation of Insurance Institutes, Mumbai,

Insurance is a method in which large number of people exposed to

similar risks make contribution to a common fund out of which, the

losses suffered by the unfortunate few, due to accidental events, are

made good.

According to Roseblantt, Bennington and others, Insurance is a

system of protection against financial loss in which risk is shifted to a

professional risk bearer; an insurance company in exchange for a certain


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sum of money (the insurance premium), the insurer agrees to pay the

insured if losses occur.

3. Contractual/Legal Definitions

These definitions consider insurance as a contract to indemnity the

losses on happening of certain contingency in future.

In the words of Justice Tindall, Insurance is a contract in which a

sum of money is paid to the assured as a consideration of insurers

incurring the risk of paying a large sum upon a given contingency.

According to E. W. Patterson, Insurance is a contract by which one

party, for compensation called the premium, assumes particularly risks

of the other party and promises to pay him or his nominee a certain or

ascertainable sum of money on a specified contingency.


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History of Insurance

In some sense we can say that insurance appears simultaneously with

the appearance of human society. We know of two types of economies inhuman societies: money economies (with markets, money, financial

instruments and so on) and non-money or natural economies (without

money, markets, financial instruments and so on). The second type is a

more ancient form than the first. In such an economy and community,

we can see insurance in the form of people helping each other. For

example, if a house burns down, the members of the community help

build a new one. This type of insurance has survived to the present day

in some countries where modern money economy with its financial

instruments is not widespread (for example former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern

money economy), early methods of transferring or distributing risk were

practiced by Chinese and Babylonian traders as long ago as the 3rd and

2nd millennia BC, respectively. Chinese merchants traveling treacherous

river rapids would redistribute their wares across many vessels to limit

the loss due to any single vessel's capsizing. The Babylonians developed

a system which was recorded in the famous Code of Hammurabi, c. 1750

BC, and practiced by early Mediterranean sailing merchants. If a

merchant received a loan to fund his shipment, he would pay the lender

an additional sum in exchange for the lender's guarantee to cancel theloan should the shipment be stolen.


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Achaemenian monarchs were the first to insure their people and

made it official by registering the insuring process in governmental

notary offices. The insurance tradition was performed each year in

Norouz (beginning of the Iranian New Year); the heads of differentethnic groups as well as others willing to take part, presented gifts to the

monarch.

A thousand years later, the inhabitants of Rhodes invented the

concept of the 'general average'. Merchants whose goods were being

shipped together would pay a proportionally divided premium which

would be used to reimburse any merchant whose goods were jettisoned

during storm or sink age.

The Greeks and Romans introduced the origins of health and life

insurance c. 600 AD when they organized guilds called "benevolent

societies" which cared for the families and paid funeral expenses of

members upon death. Guilds in the middle Ages served a similar

purpose. The Talmud deals with several aspects of insuring goods.

Before insurance was established in the late 17th century, "friendly

societies" existed in England, in which people donated amounts of

money to a general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with

loans or other kinds of contracts) were invented in Genoa in the 14th

century, as were insurance pools backed by pledges of landed estates.

These new insurance contracts allowed insurance to be separated from

investment, a separation of roles that first proved useful in marine

insurance. Insurance became far more sophisticated in post-Renaissance

Europe, and specialized varieties developed.


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Toward the end of the seventeenth century, London's growing

importance as a centre for trade increased demand for marine insurance.

In the late 1680s, Mr. Edward Lloyd opened a coffee house that became

a popular haunt of ship owners, merchants, and ships captains, andthereby a reliable source of the latest shipping news. It became the

meeting place for parties wishing to insure cargoes and ships, and those

willing to underwrite such ventures. Today, Lloyd's of London remains

the leading market (note that it is not an insurance company) for marine

and other specialist types of insurance, but it works rather differently

than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of

London, which in 1666 devoured 13,200 houses. In the aftermath of this

disaster, Nicholas Barbon opened an office to insure buildings. In 1680,

he established England's first fire insurance company, "The Fire Office,"

to insure brick and frame homes.

The first insurance company in the United States underwrote fire

insurance and was formed in Charles Town (modern-day Charleston),

South Carolina, in 1732.

Benjamin Franklin helped to popularize and make standard the

practice of insurance, particularly against fire in the form of perpetual

insurance. In 1752, he founded the Philadelphia Contribution ship for the

Insurance of Houses from Loss by Fire. Franklin's company was the first

to make contributions toward fire prevention. Not only did his company

warn against certain fire hazards, it refused to insure certain buildings

where the risk of fire was too great, such as all wooden houses.


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In the United States, regulation of the insurance industry is highly

Balkanized, with primary responsibility assumed by individual state

insurance departments. Whereas insurance markets have become

centralized nationally and internationally, state insurance commissionersoperate individually, though at times in concert through a national

insurance commissioners' organization. In recent years, some have called

for a dual state and federal regulatory system for insurance similar to that

which oversees state banks and national banks.

Principles of Insurance

1. Utmost Good Faith

2. Insurable Interest

3. Principle of Indemnity

4. Principle of Contribution

5. Principle of Subrogation

6. Principle of Mitigation Loss

7. Principle of Cause Proxima

The following Principles of Insurance are explained in detail below:

1. Utmost Good Faith:

One of the basic and primary principles of insurance is Utmost Good Faith. It

states that insurance contract must be made in absolute good faith on the part ofboth the parties. The insured must give to the insurer complete, true and correct

information about the subject matter of the insurance. Material fact should not

be hidden on any ground. This principle is applicable to all types of insurance


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contracts. Insurance is for protection and not for profit and hence, correct

information must be given to the insurance company.

2.

Insurable Interest:

This principle suggests that the insured must have insurable interest in

the object of insurance. In other words, the insured must suffer some

kind of financial loss by damage to the subject matter of insurance.

Ownership is the most important test of Insurable Interest. Every

individual had insurable interest in his own life. An insurance contract

without insurable interest is void. Insurable Interest is not a sentimentalconcept but a pecuniary interest. Insurance contract without Insurable

Interest is nothing but a wagering contract. Some of the examples of

Insurable Interest are: A trader has Insurable Interest in his business and

a creditor has Insurable Interest in his debtor. Similarly, an exporter has

Insurable Interest in the goods, which he is exporting. In addition, the

owner of a shop or a building has Insurable Interest in his shop or

building.

3. Principle of Indemnity:

This is one important principle of insurance. This principle suggests

that insurance contract is a contract for affording protection and not for

profit making. The purpose of insurance is to secure compensation in

case of loss or damage. Indemnity means security against loss. The

compensation will be paid in proportion to the loss actually occurred.

The amount of compensation in the insurance contract is limited to the

amount assured or the actual loss whichever is less. The compensation

will not be more or less than the actual loss. Compensation will not be


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paid if the specified loss does not occur during a particular period due to

a particular reason. Thus, insurance is simply for giving protection and

certainly not for profit- making.

4. Principle of Contribution:

There is no restriction as to the number of times the property can be

insured. But on the occurrence of loss only the amount of actual loss can

be realized from one insurer or all the insurers together. This principle is

however, not applicable to Life Insurance contract.

5. Principle of Subrogation:

This principle is an extension and a corollary of the principle of

Indemnity. It is applicable to all the contracts of Indemnity. It states that

once the insurance company pays the full compensation, it acquires all

the rights and remedies, which the assured would have enjoyed

regarding the said loss. When the compensation is paid for the total loss,all the rights of the insured in respect of the subject matter of insurance

are transferred to the insurer. The assured will not be able to keep the

damaged property because in that case he will realise more than the

actual loss suffered. This principle prevents the insured from making

profit out of loss. When the partial compensation is paid, the insurance

company cannot exercise such rights. The principle is applicable to fire,

marine and all other accident policies. In such policies the insured has to

give a letter of subrogation to the insurance company. The insurance

company protects its interest with the help of such letter of subrogation.


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6. Principle of Mitigation Loss:

According to this principle every insured should take all the necessary

steps to minimize the loss. E.g. If a trader takes out a marine policy forthe goods being shipped from Goa to Mumbai and if the storm takes

place due to which there might be risk of ship sinking. According to this

principle, the ship can be saved by throwing away some of the goods in

order to reduce the weight of the ship.

7. Principle of Cause Proxima:

The efficient or the effective cause that causes loss is Proximate

Cause. It is the real and actual cause of loss. If the cause of loss is

insured, the insurer will pay. In Life Insurance the doctrine of Cause

Proxima is not applied because the insurer is bound to pay the amount

of insurance whatever may be the reason of death. It may be natural or

unnatural. Hence, this principle is not much practical importance with

Life Insurance.


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2. TYPES OF INSURANCE

Life insurance

Life insurance or life assurance is a contract between the policy

owner and the insurer, where the insurer agrees to pay a sum of money

upon the occurrence of the insured individual's or individuals' death. In

return, the policy owner (or policy payer) agrees to pay a stipulated

amount called a premium at regular intervals or in lump sums (so-called

"paid up" insurance). There may be designs in some countries where:

(Assets, Bills, and death expenses plus catering for after funeral

expenses should be included in Policy Premium. Anyone whose assets

equal more than the value of their primary residence should not be

compensated beyond that value in case they cannot sell their house. In

the case of those whos lost their spouse should be compensated also for

one full year the wages of their spouse which would or should be

included to avoid lawsuits

As with most insurance policies, life insurance is a contract between

the insurer and the policy owner (policyholder) whereby a benefit is paid

to the designated Beneficiary (or Beneficiaries) if an insured event

occurs which is covered by the policy. To be a life policy the insured

event must be based upon life (or lives) of the people named in the

policy.


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Insured events that may be covered include:

death

accidental death

sickness

General insurance

Definition

The General Insurance Business (Nationalization) Act, 1972 defines

General Insurance Business as fire, marine and miscellaneous insurance

business, whether carried on single or in combination with one or more

of them, but does not include capital redemption business and annuity

contain business.

General insurance or non-life insurance policies, including

automobile and homeowners policies, provide payments depending on

the loss from a particular financial event. General insurance typically

comprises any insurance that is not determined to be life insurance. It is

called property and casualty insurance in the U.S.


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There are three major types of general insurance. They are:

1. Fire Insurance

2. Marine insurance

3. Miscellaneous insurance

3. Types of General Insurance

The scope of General Insurance includes as follows:

Fire insurance

Fire insurance is the oldest form of insurance. In the early

development of industrial society, fire was the main source of energy.

The industrial or commercial activities were not possible without fire.

However, there was a need to insure the risk of uncontrolled or uncertain

fire. Fire insurance is designed to provide for financial loss to the

property due to fire and few other related hazards. Fire insurance is

governed by a tariff under the Tariff Advisory Committee (TAC). The

property that can be covered under fire insurance includes Building,

Machinery, Equipments, Accessories, Goods, Raw Materials, Furnitures,

Residential Houses, etc.


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The standard fire policy covers the following hazards.

a. Fire i.e. burning of any property.

b. Explosion/implosion.

c. Aircraft damage caused by pressure waves.

d. Lightning.

e. Riot, strike, malicious and terrorism damage.

f. Storm, cyclone, tornado, floods, etc.

g. Missile testing operations.

Marine insurance

Insurance was introduced to the world by marine insurance. The

object of marine insurance is to make good losses exposed to the

seafarers due to sea conditions, war, pirates, weather, etc. the legal

framework of marine insurance is provided by Marine Insurance Act,

1963.

Marine insurance has two important and broad components. The first

one is cargo insurance and the second one is hull insurance. Cargo

insurance provides cover for losses or damages that could occur to goods

in transit on sea, rail, road or air. This insurance is purchased by the

owners of cargo/ships.

Hull insurance covers the insurance of the carrier of the goods. This

type of insurance is purchased by the owners of the transportation

vehicle. In case of Import-Export trade, the responsibility for purchase of


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insurance lies with the seller if the price quoted is Cost, Insurance, and

Freight (CIF).

The important risks covered by the Institute cargo clauses are as

follows:

a. Fire.

b. Vessel or craft being stranded grounded sunk or capsized.

c. Overturning or derailment of land conveyance.

d. Collision or contract of vessel, craft, or conveyance with any

external object other than water.

The following extraneous risks are also covered:

a. Theft, pilferage or non-delivery.

b. Fresh or rain water damage.

c. Breakage.

d. Leakage.

e. Country damage.


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Miscellaneous insurance

Miscellaneous insurance

Farm insurance

Farmers are the food providers of the nation. They see to it that we

have enough food to serve on our everyday plates. This is a result of a

long and tiring struggle against the scorching heat of the sun and other

unfavorable weather conditions. On the other hand, it is very saddening

to know that at times, few farmers expect to suffer major misfortunes.

This is the reason why more and more farmers are into farm insurance

right now. Farm insurance can assist them to select from different

coverages, limits and deductibles and thereby customize the policy to fit

their needs and budget, including homestead, farm motor, farm

machinery, farm liability, livestock, fencing and hay, farm loss of

income and business interruption, personal accident and much more.

Some of the perils that threaten the farm operation, which are being

covered by most farm insurance companies are the following: fire and

lightning, explosion, wind and hail, vandalism, theft, aircraft and vehicle

damage, smoke damage and collision. The dwelling is also covered for

glass breakage, damage caused by falling objects, collapse of building

parts, accidental electrical injuries, heating frozen plumbing and air

conditioning. Other supplemental coverages are the following: fire

department charges, fire extinguisher refills, credit cards, collapse on

farm personal property and refrigerated products. Protection from farm


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liability and chemical spillage is also being offered. Farm liability

coverage provides personal and medical payments as a result of injuries

and damages for which the owner is legally viable. Chemical spillage

coverage provides insurance for damages caused by accidental or suddenspillage of agricultural chemical products in the course of farming

operation.

One of the farm insurance companies that offer exceptional coverage

for farm owners is the Farm Family Group. The Farm Family groups of

insurance companies consist of the following: the Farm Family Life

Insurance Company, the Farm Family Casualty Insurance Company, and

the United Farm Family Insurance Company, each of which serves the

needs of policyholders in over 12 Northeastern states. The Farm Family

Group is headquartered in Glenmont, New York, which has been

providing insurance protection for families and businesses in rural and

suburban areas since the mid-1950s.

Another one is the National Farmers Union Property and Casualty

Company Farmers Union Insurance Company, which has been serving

the nation for more than 62 years. Farmers Union Insurance, on the other

hand, is under QBE The Americas, a segment of the QBE Insurance

Group Limited. The A.M. Best Company (a leading analyst of insurance

companies) awarded the QBE Insurance Group an outstanding "A"

(Excellent) rating. Both National Farmers Union Property and Casualty

Company and United Security Insurance Company are rated "A-"

(Excellent) respectively.

It is a good thing to know that these farm insurance companies have

web sites that potential clients can check for more information. This will


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also help clients differentiate the services that were being offered by

these insurance companies. It is also best to build strong relationships

with your insurance agents to ensure that you are getting your moneys

worth. To make sure that you are in good hands, select a farm insurancecompany with an excellent background and exceptional credibility.

Business Insurance

Business insurance gives the insured business or organization the

chance to be covered from any business risks that may come.

Business insurance serves to protect a business establishment from

many business risks that many come up. It is usually the small

businesses that may need a small business insurance coverage for a

fledging company. This is because it s still a growing company that may

encounter several obstacles or problems along it progress. Insurance for

small business establishments can help eliminate the worry that an owner

may have in investing in something new. Small business liabilityinsurance covers health insurance and other concerns regarding their

responsibility to their clients and their performance.

Business insurance is a great insurance business opportunity for

insurance agents because they usually get higher commissions for

multiple insurance policies. They can also give their prospective clients

quotes for many different kinds of business insurance combinations that

could benefit the business. Any business insurance group may offer

discounts when clients avail of several insurance policies or packages for

their organizations or stores.


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Business liability insurance covers a lot of aspects in the business

industry. There are several insurance coverage ranges that include

professionals to bodily injury to business income coverage. You may

have the insurance agent you are dealing with give you a businessinsurance quote depending on your need and preference. These business

insurance quotes give prospective clients of the insurance company a

glimpse of what they can offer the client and what they assure they can

deliver if the time comes. There are several types of business insurance

and some of these may suit you or your business needs and

requirements.

Other use for insurance business focus is errors and omissions

liability coverage. This helps the professionals like architects, doctors,

accountants, lawyers, bankers, architects etc deal with expensive

litigation and legal services which may be the result of their negligence

or poor performance during a project or a job. This kind of insurance

also protects and covers any independent contractors or employees who

may make mistakes or be neglectful regarding their duties and jobs in the

company.

Insurance for business establishments are quite useful to have since

they have packages that cover theft and losses of data in the business

involved. They may also have some insurance concerning business car

insurance where the transportation of the business or establishments is

concerned. Business insurance has a very wide coverage and they can

adjust their quotes to suit your needs and preferences. Business and

insurance make great team because businesses need to have a fall back

plan incase their initial business scheme does not work.


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Insurance for business helps stabilize a business if it hits a snag.

Business insurance in all kinds of businesses is handy to have and may

not cost as much as you anticipate. You could also search for several

topics regarding business insurance online to help you understand theterms and coverage included better. This will help to make you get better

deals and make better decisions regarding getting insurance for your

business. Researching business insurance will also give you an idea of

what may be covered in the policies and what you might want to add.

Student Insurance

Student Insurance is designed to the particular needs of students

specially university or college students to protect them and their

important belongings.

A lot of students are not really aware that there is a kind of insurance

available for them. Health insurance is already a need for students

especially who are studying medicine. But surprisingly still a lot of

students depend on the schools health care clinic. You have to admit that

these kinds of clinic dont really provide the health coverage you need

when you are inside the campus. That is why; a lot of students still dont

know what a Student Insurance is.

There are different kinds of student health insurance, and one of the

most common is Domestic Student Health Insurance plan. In this kind of

insurance, it will cover products and services not covered by the heath


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service fee. Most of the time different services are rendered when the

student already register for the incoming semester.

If the student has medical health insurance, the costs given are the

following:

o Medical care received outside of the school like hospitalization,

etc.

o Services which are not covered by the students tuition fee like

eye and ear care, immunization, medication, etc.

o Medical services for spouses, family partner and dependents.

You need to be informed that without having health care insurance,

you will shoulder all the fees for these services. Most of the time, getting

a student health insurance is not that easy because the expenses and other

cost are really high. That is why a lot of students cant afford to have this

kind of insurance. Through Domestic Student Health Insurance,

everything would be possible because it was designed and developed to

meet the needs of the students especially when it comes to the budget.

The following are some of the examples of Domestic Student Health

Insurance:

o With this kind of plan, age is not a factor in determining the

eligibility of the student. For most health plans, age restriction is

one of the factors that will limit the coverage of the dependent.

But with this kind of medical health insurance, it will cover you

up provided that you are still a student.

o With this kind of plan, travel health assistance is covered when

live far from your house and school campus.


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o It will also provide direction in drug coverage.

o The periods of coverage are dependable with academic semesters.

You should always remember that the eligibility of the student is at

all times subject to verification with the following considerations:

o A student who will enroll in different classes or just within the

semester.

o Students who meet different qualifications and who is a green

card holder too.

o A student who has this kind of insurance will received a permitted

medical leave of absence.

o Age wont be a problem since it is not a factor in determining the

eligibility of students.

Health care insurance is really important. You dont have to entrust

yourself with medical clinic of different schools since they cant really

provide everything that a student need. In order to be perfectly safe even

when you are away from home, this kind of very basic plan is perfect

you.

Dental Insurance


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Dental insurance is simply an agreement between the dental

insurance company and you that will allocate you to get pleasure from

discounts on dental expenses.

Maybe you will think that dental insurance and dental plan are just

one and the same, but you are wrong. There are big differences between

the two. First let me tell you what a dental plan is. A dental plan is

simply the agreement between you and the company that will provide

the plan for you. Just like dental insurance, it is a plan that will also give

you discounts on all your dental costs. They will also let you choose the

doctor that you like from the lists and the process of the approval is so

easy. One good thing about dental plans is, if you want to decrease your

dental costs without filling out so many documents, then this one is the

right for you.

Are you still a bit confused about the difference between the two?

There are more ways wherein a dental plan is dissimilar from dental

insurance.

o With dental insurance, you need to accomplish tons of application

forms, and not only that, because you still need to convince them

that you are free from any dental problems in the present that can

affect your dental care in the future. Which is exactly opposite if

you will apply for a dental plan. Worry free when it comes to

documents because the process is very simple.

o With dental insurance, they may still require you to undergo

dental examination in order to qualify and you still have to wait

for a long period of time. While in dental plan, you just have to

apply and pay a certain amount of money for your membership


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and thats it. Once they accept your application, you may already

enjoy getting discounts on your dental care expenses.

o With dental insurance, most of the time procedures that will make

your teeth look good is not covered like, teeth whitening, bracesand many more. On the other hand, with some dental plans, you

may be eligible for treatments of pre-existing situation. Both

dental insurance and dental plans cover cleaning of teeth, root

canals and other dental care.

In getting your claims, there is also a big difference, with dental

insurance; first, you have to fill out a form that will be given to the

doctor or to the dental insurance company for approval which means that

you will wait in order to find out if your money will be reimbursed for

the dental expenses. Sometimes dental insurance companies will only

give you back a small percentage of the money you incurred for your

dental care. While with a dental plan, you will just simply show your

membership card and policy number to your dentist and your dentist will

be the one who will do all the paperwork for you and you will be able to

get the discount immediately. In that way, you just have to pay your

lowered dental expenses straight to your dentist.

Pet Insurance


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Do know the A-B-C of being a pet owner? Owning a pet is not just

about taking care of them and treating them as members of the family,

security is also important for these pets.

Pets bring joy and happiness to any home and play a very important

role in mans life. Like the popular saying goes, pets (dogs) are a mans

best friend. Not only that they are great companions, but also, most

households consider their pet as a part of their family. Pets are curious

about their environment and love to explore everything around them,

especially during their first few years of existence. Pets often use their

mouth if they find something amusing that they tend to swallow things

like small objects. Like any other family member, pets are susceptible to

injuries, diseases or accident, which may sometimes lead to malfunction

of other body parts, or worst, death. Now can you imagine being faced

with the cost to undergo such unfortunate situation? This is where Pet

Insurance comes in.

Since you can't predict when injuries, accidents or illnesses will

happen, pets insurance will provide you the best defense against sudden

veterinary costs, while providing the best possible protection for your

pet. With the advanced technology in medical techniques and drugs for

pets, veterinary medicine now uses human medical procedures, making

it very expensive for the pet guardian to pay for veterinary bills. The

good thing about having pet insurance is that this will cover all the

veterinary expenses if one's pet is ill or got into an accident. Some

guidelines even pay out if the pet dies, is missing or stolen.

There are a lot of pet insurance companies in the US and UK, each

offering a wide variety of insurance plans and claiming to be the best pet


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insurance around. In the US, we have VPI Pet Insurance, Pet Care

Insurance, and Pets Best Insurance. In the UK, we have Direct Line Pet

Insurance, Pet Care Insurance and Tesco Pet Insurance. Some pet

insurance companies do not limit themselves in covering health andveterinary pet insurance alone, but also, some cover boarding costs,

funds to help retrieve a lost pet, and third party liability insurance. This

means that if a pet caused a vehicular accident, the insurance will pay

and rectify the damage as mandated by law under the 1971 Animals Act.

Some pet guardians who are on a tight budget also want to buy pet

insurance, however some just cannot afford it. This is the reason why

there are a lot of cheap pet insurance around that offers a good plan at a

lower rate. However, here are some of the things to consider in choosing

the best pet insurance. First is the policy cover. Look for plans that cover

accidents, illnesses, and optional routine care coverages like vaccination

and other tests. Second is the deductible. Choosing a higher deductible

will lower your monthly plan but you will pay more if your pet will

require medical treatment. Choosing a lower deductible will do

otherwise. Third is veterinary assistance. Some pet insurance companies

will require you to select a doctor that you do not even know from a list.

It would still be best if you will deal with a licensed veterinarian. And

lastly, choose a company that is licensed by your state or is

recommended by your veterinarian. By doing so, youll get the best

experience ever as far as pet insurance is concerned.

Vehicle insurance


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A motor vehicle is defined as, mechanically propelled vehicle

adopted for use upon roads where the power of propulsion is transmitted

thereto from an external or internal source and includes a chassis to

which a body has not been attached and a trailer but not a vehicle whichis running on fixed rails.

The Motor Vehicle Act of 1939 introduced compulsory general

insurance to protect those who may get injured in an accident. However,

the insurance of damage to the vehicle is not compulsory.

4. Vehicle insurance

A motor vehicle is defined as, mechanically propelled vehicle

adopted for use upon roads where the power of propulsion is transmitted

thereto from an external or internal source and includes a chassis to

which a body has not been attached and a trailer but not a vehicle which

is running on fixed rails.

The Motor Vehicle Act of 1939 introduced compulsory general

insurance to protect those who may get injured in an accident. However,

the insurance of damage to the vehicle is not compulsory. The Tariffs

Advisory Committee regulates vehicle insurance in India. Vehicle

insurance is one of the largest non-life insurance business in the world.

All motor vehicles are to be registered with the Road Transport

Authorities. They are also insured for third party liability. The Motor

Vehicle act was modified in 1988. Vehicles require compulsory


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insurance because any vehicle can be parked or drived in public places.

Vehicle insurance (also known as auto insurance, car insurance, or motor

insurance) is insurance purchased for cars, trucks, and other vehicles. Its

primary use is to provide protection against losses incurred as a result oftraffic accidents and against liability that could be incurred in an

accident.

The liability that requires to be covered under this Act includes the

following:

a. Any liability arising in respect of death or bodily injury to any

person including the owner of the vehicle or his authorised person

in the carriage.

b. Any liability incurred in respect of damage to any person or

property of a third party.

c. Any liability incurred in respect of death or bodily injury of any

passenger of a public service vehicle.

d. Liability arising under Workmens Compensation Act, in respect

of injury or death of a paid driver of the vehicle, conductor or

workers carried in goods vehicle.

e. Liability for bodily injury or death of passengers who are carried

for hire by a reason of a contract of employment.

f. The policy should carry no fault liability limited to a sum of Rs.

50000 in case of death, Rs. 25000 in case of permanent disability

and Rs. 6000 in case of damage to the property. No fault liability

is based on the premise that the injured party does not have to

prove any fault in order to claim this amount under the policy.


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Motor vehicles are classified into three categories for the purpose of

insurance they are:

Passengers and other miscellaneous items include Auto Rickshaws,

Taxis, Buses, Ambulances and Mobile Utilities.

There are two of policies of motor insurance available for all types of

vehicles in India:

1. Third Party Liability Policy

This policy covers the liability as defined in the motor Vehicle Act.

Under this policy the insurer indemnifies the insured against all sums

which the insured may become legally liable to any person, including

occupants of the insured motor vehicle. The liability of the insured for

damages to property of third party is limited to Rs. 6000 and the liability

for the death of, or bodily injury to third party is unlimited. The legal

costs incurred by such third parties are reimbursed in addition to the

above liability. The legal expenses incurred by the insured can also be

reimbursed with the written consent of the insurer.

2. Comprehensive Policy

This policy covers the range of risks as defined in the tariff. The risks

covered under this policy includes loss due to fire, explosion, burglary,

theft, earthquake, flood, cyclone, terrorist activities, riots, strikes inland,

waterways, lift and air. However, the losses due to mechanical


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breakdown, failures, breakages, depreciation, overloading are not

covered under the comprehensive policy.

If the motor vehicle is disable, the insurer also bears a reasonable cost

to tow the vehicle to a place of repairs. This cost is covered up to Rs. 300

in case of motor cycle and Rs. 2500 for other vehicles. The repairs can

be carried out without authorization of the insurer to the extent of Rs.

150 for motor cycles and Rs. 500 for other vehicles. In case of

commercial vehicles the insured has to bear a sum of Rs. 1500 in respect

of each accident compulsorily. It is called compulsory excess.

In case of motor insurance, the insurer is not liable in respect of the

following losses:

a. Any accident when the vehicle is driven by the driver without a

valid license.

b. Any accident when the vehicle is used not in accordance with the

limitations to use clause.

c. Any contractual liability.

d. Loss due to war and nuclear risk.

e. Any accident occurred outside the boundaries of India.

The following conditions are specific to Motor Insurance in India:

a. The insured is required to safeguard the vehicle from loss or

damage and maintain it in efficient condition. In case of an

accident, the insured is required to take precaution to prevent

further damage.


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b. The insurer has the option to repair or replace the vehicle or any

of the parts or pay for the damages. The insurers liability cannot

exceed the insureds estimated value of the vehicle as specified in

the policy.

Claims procedure

The insured is under an obligation to follow all the procedures of

giving notice to the insurer relating to (i) the place of accident, (ii) time

of accident, (iii) cause of accident and (iv) particulars of the insurance

coverage. All the precautions to be taken to mitigate the losses should be

taken by the insured and the insurer has to follow the procedure that

follows like (i) appointment of surveyors provided the claim is more

than Rs. 20000 and (ii) assessment of loss by primary enquiry and (iii)

analysis of cause of damage and 9iv0 verification of the facts with those

attributed by the policy documents. And if the insurer satisfied with theclaim made by the beneficiary or the insured or the third party, it can

make a decision and communicate its acceptance or rejection of the

claim. If it rejects it should mention the reasons for rejection. The

insured after receiving the communication of acceptance or the rejection,

if not satisfied can file a petition with the claims Tribunal.

Settlement of claims under motor vehicle insurance


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The ever increasing numbers of claims are related to the number of

accidents caused, which has the ultimate relation to the increasing

number of vehicles used. The presence of the vehicle has become

symbol of status. But the same vehicle is cause of concern when theowner suffers damages either due to use of vehicle directly or due to

payment of damages to the third party for the loss suffered by the third

party due to the operation of the vehicle directly by the owner or the

driver of the vehicle. The motor vehicle insurance forms major part of

the insurance business and also claims under this class and more. The

payment and settlement of claims under motor vehicle insurance are

directly related to the following concept. The settlement of claims and

the quantum of the compensation payable are dependant on these factors.

Type of the policy

Payment of premium

Nature of the claim

Warranties and conditions

Driving license

Permits

Negligence

Type of the vehicle

Type of the passengers

Ownership of the vehicle.

Type of the Policy


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The motor vehicle insurance includes the insurance policy as per

the procedure laid down in the Insurance Act 1938 and also includes the

certificate of insurance issued under Section 145(b) of the Motor Vehicle

Act and a cover note, which is issued as a temporary and time gaparrangement and is operative till the original policy is issued. The other

important element is that the policy should be valid at the time of

accident.

o The policy should be issued by an authorized insurer. An

authorized insurer is one defined by Insurance act, 1938.

o The policy should be issued in favor of person by whom it is

affected.

o It should include a Certificate of Insurance as defined by the Act.

o It should be in the prescribed Form of format.

o It should contain the prescribed information and conditions of the

subject matter of insurance, the risks covered under the policy,

and the description of the vehicle.

o It may contain further information as agreed upon by the parties.

o It should state whether the insurance is limited to third party

insurance or the comprehensive insurance covering the vehicle

and third party damages.

Premium


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Any insurance policy cannot be affected until the premium is

paid. The cover note and the policy are not effective until the premium is

paid. The question whether the premium has been paid has to be

established by the claimant.

Warranties

Motor Vehicle policy has some warranties the non-compliance of

which by the insured would exempt the insurers from their liability. An

important warranty relates to the age and the condition of the vehicle. It

is important for the insurer to find out whether the car is more liable to

accidents and breakages than any other vehicle. A false statement in this

respect would make the contract void even though it was made by

inadvertence. As in the case of marine insurance there is an implied

warranty that the vessel is seaworthy, whereas there is no such warranty

in case of motor insurance policy. The insurers can, however, limit their

liability by an express warranty in the policy to any accident that the

vehicle is not roadworthy and was unsafe foe driving.

Driving License

A driving license is essential requirement to obtain a motor car

insurance policy. Holding a driving license and or being a qualified and

competent driver is one thing and being employed as a driver is another

thing. A person who does not have a valid driving license is not eligible

to claim indemnity from the insurer. The burden of proof falls on the

insurer to prove that the driver did not possess a valid driving license. In

case the driver of the vehicle dies in an accident and the insurance

company is not able to prove that he did not possess a license, the


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liability of the insurer remains. Even if the driver is holding a learners

license the insurance company can be held liable to pay compensation.

The conjoint reading of Section 94 and 125 of the Act, tells that a person

who drives any motor vehicle or allows a person to drive motor vehiclein public is under the duty to find out that whether the vehicle is insured

or not. It is found that the vehicle is not insured then it falls on the

person to get the vehicle insured.

The insurance company is not liable to pay or the liability of the

insurance company stands cancelled if

o The vehicle is driven by a person who is not duly licensed.

o When no driving license has been produced by the claimant either

at the time of filing of the written statement or at the time of

recording evidence or even at the later stage.

o If the vehicle was driven by somebody else, other than the license

driver.

Some of the principles relating to driving license are-

o A forged driving license if validly renewed will not make it a

valid driving license.

o If the insured bonafidely believes in forged driving license

employing the holder of a fake driving license renewed by a

competent authority, would not amount to violation of the terms

of contract of the insurance policy nor be the conditions of

indemnity be violated. Under this situation, merely employing a

driver with the forged driving license would not amount to breach

of the terms and conditions of policy.


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o In the absence of knowledge or intention to violate the terms of

the policy or the provisions of the Act by the insured, the liability

of the insurance company remains.

o The insurer is liable both statutorily and contractually toreimburse the third party for the tortuous acts of the insured and

his employees.

o The insurance company cannot refuse the liability to indemnify

the insured or the claimants for an act of fraud of the third party;

whilst it has he right to recover any loss suffered by it from the

person who is guilty of the act or who committed the fraud, as

permissible under the law of tort or any other statute.

Permit

A permit is an approval/permission granted by the government

authorities for a particular purpose. A permit for a vehicle means that itis permitted to ply on such routes and with such load and subject to such

other conditions as specified in the permit. Permit is granted for vehicles

used for commercial purposes. The permit is for specified period of time

and is renewable. It is for the statutory authority to take into

consideration all the relevant factors while considering the applications

for grant of licenses. The Regional Transport Authority (RTA) is the

authority for granting permits and it is up to the RTA to see whether

there is any genuine requirement to grant permit. A permit is non

transferable as per section 59(1)(a) of the Act, except with the

permission of the transport authority. The types of permits can be-


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1. Contract carriage permit

2. Stage carriage permit

3. Temporary permits

A contract carriage permit is one which is engaged in carrying

person(s) from one point to another but cannot take other persons en

route, whereas in a stage carriage permit the driver can board the other

persons enroute. Temporary permits are also granted on special

occasions when there is too much load. These occasions could be

festivals, seasonal, during summer vacations, etc.

Negligence

Negligence can be defined as an omission to do something which

is reasonable man guided by those considerations which regulate the

human affairs, would do, or to do something which a reasonable and

prudent person not do. Negligence can be said to be the breach of duty

resulting in damages to the person or property. Negligence can be termed

as statutory or actionable if it is subject to law or if it arises from the

circumstances of a particular case. The types of Negligence are:

o Contributory negligence

o Composite negligence

o Statutory negligence


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Contributory negligence is defined as the negligence on the part of

the person also who suffered from damages. Composite

negligence arises when the negligent acts or omission of two or

more persons causes damages to the third person. In contributorynegligence, the Court has the power to apportion the amount of

loss between the parties. But in case of composite negligence the

third person does not contribute to damages and as such he is

entitled to sue any of the persons for damages caused to him. In

case of statutory negligence, neither the defense of composite

negligence nor the cover of contributory negligence is available to

the wrong doer.

Determination of as to who is a negligent person is important

to prove negligence. Simply pleading negligence on the counter

partys part without proving the negligence and the person

negligent does not amount to anything. Negligence can be

attributed to number of factors.

There can be no negligence by the act of a child who is of

tender age. The owner of a motor vehicle does not become liable

for his owning a motor vehicle. The Supreme Court in one case

pointed out that the owners liability arises by his failure to

discharge the duty which is cast on him by law. The Supreme

Court further pointed out that the owner is liable only for

negligence and proof of vicarious liability for the acts of servants.

The Supreme Court concluded that the proof of negligence is

necessary to hold the owner or the insurance company for the

payment of compensation in case of motor vehicle accident


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claim.

Claims under motor vehicle insurance

The motor insurance is a combination of property and personal

insurance. It insures the damages to motor vehicle, its accessories,

liability for damage to the property, liability for death and disablement

(whether temporary or permanent) and the risk of injuries or death of any

third party (who may not be a party to the contract). Thus broadly the

motor vehicle insurance covers the following three aspects:

o Comprehensive insurance

-Property accident aspect

-Personal accident aspect

o Compulsory insurance

-Third-party liability

Comprehensive insurance

Property accident

If a motor vehicle is insured, the insured will be indemnified for

any kind of loss or damage caused to it by accident. The contract being

one of indemnity, the insured is entitled to indemnity only and that too in

the manner as specified by the policy. He can get medical expenses also


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but subject to a limit. If the insured car suffers damage the insurer is

entitled at his option to replace or repair the car or any part of the insured

car or may pay the amount of loss or damage not exceeding the amount

insured or the value at the time of loss whichever is less. It may sohappen in the case of imported vehicle that there is considerable effort

involved in getting parts of the vehicle replaced wherein the insurer may

chose to pay the amount instead of getting replaced. The terms of the

policy will provide the nature and extent of indemnity.

Personal accident

Besides insuring the personal safety the extension clause indemnifies

the insured for the injury caused to him whilst he is driving motor car not

belonging to him or hired by him and any person driving the insured car

by the general knowledge and permission of the assured. Further paying

extra premium, coverage can be had for risks covering-

o Wife of the assured

o Child of the assured

o Other relatives as specified

o Earthquakes

o Floods and

o Various other risks can be covered depending upon the extent of

premium that is needed and paid for such coverage.

The benefit is extended in two ways- it extends to the insured not

only when he is driving the car, but also when he is driving a private

motor car (but not a motor cycle), not belonging to him and not hired by

him. Such a benefit is available only till he is the owner of the insured


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car. The policy also extends to any driver who is driving the vehicle by

the order or permission of the insured.

Some of the usual condition which the assured must take care of, to

make the insurer liable is as follows-

o The insured will maintain the vehicle in good state of repair.

o He takes all reasonable steps and precautions to avoid the accident

and select competent and good drivers.

o That he takes all the reasonable steps to safeguard the vehicle

from loss or damage.

Where the insured fails to take the reasonable care of the care, which

he can do without any expert knowledge and efforts, and meets with an

eventuality the insurer is absolved of his liability.

Third party or Compulsory Insurance

Insurable Interest

A motor policy may extend the right and indemnity to any person

who is driving the vehicle of insured with his knowledge and consent. It

may be noticed that such person is not a party to the contract and cannot

enforce the policy for his benefit. Such a clause confers no right on such

person- unless there is an intention on the part of the assured to create

such a trust.


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The nature of the third party insurance derives its effect from the fact

that in the law of torts when the driver drives a vehicle and causes

injuries to the third party, the driver whose negligence caused such

injuries is liable to the third party.

Third party insurance is compulsory in case of motor vehicles. The

contract in this policy is a contract of indemnity, like in case of other

insurance contracts. The objective of this type of policy is to protect the

insured against the liability to third parties arising out of an accident

caused by the use of motor vehicle on a public road and hence it is made

compulsory. The persons required to insure are-

o One who uses a motor vehicle except a passenger, i.e., the driver

of the vehicle, and

o One who causes or allows any other person to use a motor

vehicle. He may be the permanent owner of the vehicle, one who

is in possession of a vehicle under a contract of loan or hiring, or

even an owner in due course.


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Hit and Run Motor Accidents

Hit and Run motor accidents create a liability on the insurer. Section

161-163 of the Motor Vehicles Act, 1988 deal with the hit and run cases.These cases arise when the motor car hits a third party and goes away

and with all the efforts of the injured vehicles that hit him is not

traceable. The liability in such case falls on all the insurers who have to

contribute to a fund which is maintained by the District Collector. The

claimant has to file an application with the District Collector for grant of

compensation. Thus, the liability in such cases on the insurers is an

indirect one. The Central Government is authorised to make a scheme by

notifying in the official gazette that the liability arising out of the hit and

run motor accidents will be looked upon by the General Insurance

Corporation. The insurer is liable to pay the third party a fixed sum of

rupees twenty five thousand in case of death and rupees twelve thousand

in case of grievous injury.

Coverage under auto policy

What is covered by a basic auto policy?

Your auto policy may include six coverages. Each coverage is priced

separately.

1. Bodily Injury Liability

This coverage applies to injuries that you, the designated driver or

policyholder, cause to someone else. You and family members listed on


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the policy are also covered when driving someone elses car with their

permission.

Its very important to have enough liability insurance, because if you

are involved in a serious accident, you may be sued for a large sum of

money. Definitely consider buying more than the state-required

minimum to protect assets such as your home and savings.

2. Medical Payments or Personal Injury Protection (PIP)

This coverage pays for the treatment of injuries to the driver and

passengers of the policyholder's car. At its broadest, PIP can cover

medical payments, lost wages and the cost of replacing services

normally performed by someone injured in an auto accident. It may also

cover funeral costs.

3. Property Damage Liability

This coverage pays for damage you (or someone driving the car withyour permission) may cause to someone else's property. Usually, this

means damage to someone elses car, but it also includes damage to

lamp posts, telephone poles, fences, buildings or other structures your

car hit.

4. Collision

This coverage pays for damage to your car resulting from a collision

with another car, object or as a result of flipping over. It also covers

damage caused by potholes. Collision coverage is generally sold with a

deductible of $250 to $1,000the higher your deductible, the lower


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your premium. Even if you are at fault for the accident, your collision

coverage will reimburse you for the costs of repairing your car, minus

the deductible. If you're not at fault, your insurance company may try to

recover the amount they paid you from the other drivers insurancecompany. If they are successful, you'll also be reimbursed for the

deductible.

5. Comprehensive

This coverage reimburses you for loss due to theft or damage caused

by something other than a collision with another car or object, such as

fire, falling objects, missiles, explosion, earthquake, windstorm, hail,

flood, vandalism, riot, or contact with animals such as birds or deer.

Comprehensive insurance is usually sold with a $100 to $300

deductible, though you may want to opt for a higher deductible as a way

of lowering your premium.

Comprehensive insurance will also reimburse you if your windshield

is cracked or shattered. Some companies offer glass coverage with or

without a deductible.

States do not require that you purchase collision or comprehensive

coverage, but if you have a car loan, your lender may insist you carry it

until your loan is paid off.


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6. Uninsured and Underinsured Motorist Coverage

This coverage will reimburse you, a member of your family, or a

designated driver if one of you is hit by an uninsured or hit-and-run

driver.

Underinsured motorist coverage comes into play when an at-fault

driver has insufficient insurance to pay for your total loss. This coverage

will also protect you if you are hit as a pedestrian.

Coverage levels

Vehicle insurance can cover some or all of the following items:

o The insured party

o The insured vehicle

o Third parties

Different policies specify the circumstances under which each item is

covered. For example, a vehicle can be insured against theft, fire

damage, or accident damage independently.

Basis of premium charges

Depending on the jurisdiction, the insurance premium can be either

mandated by the government or determined by the insurance company in

accordance to a framework of regulations set by the government. Often,


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the insurer will have more freedom to set the price on physical damage

coverages than on mandatory liability coverages.

When the premium is not mandated by the government, it is usually

derived from the calculations of an actuary based on statistical data. The

premium can vary depending on many factors that are believed to have

an impact on the expected cost of future claims. Those factors can

include the car characteristics, the coverage selected (deductible, limit,

covered perils), the profile of the driver (age, gender, driving history)

and the usage of the car (commute to work or not, predicted annual

distance driven).


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5. CASE STUDY

1. Auto Insurance in the United States

Coverage Available

The consumer may be protected with different coverage types

depending on what coverage the insured purchases. Every state requires

that motorists carry minimum levels of auto insurance coverage in order

to ensure that its drivers can cover the cost of damages to people or

property in the event of an automobile accident.

In the United States, liability insurance covers claims against the

policy holder and generally, any other operator of the insured vehicles

provided, do not live at the same address as the policy holder, and are

not specifically excluded on the policy. In the case of those living at the

same address, they must specifically be covered on the policy. Thus it is

necessary for example, when a family member comes of driving age they

must be added on to the policy. Liability insurance sometimes does not

protect the policy holder if they operate any vehicles other than their

own. When you drive a vehicle owned by another party, you are covered

under that partys policy. Non-owners policies may be offered that

would cover an insured on any vehicle they drive. This coverage is

available only to those who do not own their own vehicle and is

sometimes required by the government for drivers who have previously

been found at fault in an accident.


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Generally, liability coverage extends when you rent a car.

Comprehensive policies ("full coverage") usually also apply to the rental

vehicle, although this should be verified beforehand. Full coverage

premiums are based on, among other factors, the value of the insuredsvehicle. This coverage, however, cannot apply to rental cars because the

insurance company does not want to assume responsibility for a claim

greater than the value of the insureds vehicle, assuming that a rental car

may be worth more than the insureds vehicle. Most rental car

companies offer insurance to cover damage to the rental vehicle. These

policies may be unnecessary for many customers as credit card

companies, such as Visa and MasterCard, now provide supplemental

collision damage coverage to rental cars if the transaction is processed

using one of their cards. These benefits are restrictive in terms of the

types of vehicles covered.

Liability

Liability coverage provides a fixed dollar amount of coverage for

damages that an insured driver becomes legally liable to pay due to an

accident or other negligence. For example, if an insured driver drives

into a telephone pole and damages the pole, liability coverage pays for

the damage to the pole. In this example, the drivers insured may also

become liable for other expenses related to damaging the telephone pole,

such as loss of service claims (by the telephone company).

Liability coverage is available either as a combined single limit

policy, or as a split limit policy:


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1. Combined Single Limit

A combined single limit combines property damage liability coverage

and bodily injury coverage under one single combined limit. For

example, an insured driver with a combine single liability limit strikes

another vehicle and injures the driver and the passenger. Payments for

the damages to the other driver's car, as well as payments for injury

claims for the driver and passenger, would be paid out under this same

coverage.

2. Split Limits

A split limit liability coverage policy splits the coverages into

property damage coverage and bodily injury coverage. In the example

given above, payments for the other driver's vehicle would be paid out

under property damage coverage, and payments for the injuries would be

paid out under bodily injury coverage.

Bodily injury liability coverage is also usually split as well into a

maximum payment per person and a maximum payment per accident.

Collision

Collision coverage provides coverage for an insured's vehicle that is

involved in an accident, subject to a deductible. This coverage is

designed to provide payments to repair the damaged vehicle, or payment

of the cash value of the vehicle if it is not repairable. Collision coverage

is optional. Collision Damage Waiver (CDW) is the term used by rental

car companies for collision coverage.


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Comprehensive

Comprehensive (a.k.a. - Other Than Collision) coverage provides

coverage, subject to a deductible, for an insured's vehicle that isdamaged by incidents that are not considered Collisions. For example,

fire, theft (or attempted theft), vandalism, weather, or impacts with

animals are just some types of Comprehensive losses.

Uninsured/Underinsured Coverage

Underinsured coverage, also known as UM/UIM, provides coverageif another at-fault party either does not have insurance, or does not have

enough insurance. In effect, your insurance company acts as at fault

party's insurance company.

In the United States, the definition of an uninsured/underinsured

motorist, and corresponding coverages, are set by state laws.

Loss of Use

Loss of Use coverage, also known as rental coverage, provides

reimbursement for rental expenses associated with having an insured

vehicle repaired due to a covered loss.

Loan/Lease Payoff

Loan/Lease Payoff coverage, also known as GAP coverage or GAP

insurance, was established in the early 1980's to provide protection to

consumers based upon buying and market trends.


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Due to the sharp decline in value immediately following purchase,

there is generally a period in which the amount owed on the car loan

exceeds the value of the vehicle, which is called "upside-down" or

negative equity. Thus, if the vehicle is damaged beyond economicalrepair at this point, the owner will still owe potentially thousands of

dollars on the loan. The escalating price of cars, longer-term auto loans,

and the increasing popularity of leasing gave birth to GAP protection.

GAP waivers provide protection for consumers when a "gap" exists

between the actual value of their vehicle and the amount of money owed

to the bank or leasing company. In many instances, this insurance will

also pay the deductible on the primary insurance policy. These policies

are often offered at the auto dealership as a comparatively low cost add

on that can be put into the car loan which provides coverage for the

duration of the loan.

Consumers should be aware that a few states, including New York,

require lenders of leased cars to include GAP insurance within the cost

of the lease itself. This means that the monthly price quoted by the dealer

must include GAP insurance, whether it is delineated or not.

Nevertheless, unscrupulous dealers sometimes prey on unsuspecting

individuals by offering them GAP insurance at an additional price, on

top of the monthly payment, without mentioning the State's

requirements.

In addition, some vendors and insurance companies offer what is

called "Total Loss Coverage." This is similar to ordinary GAP insurance

but differs in that instead of paying off the negative equity on a vehicle

that is a total loss, the policy provides a certain amount, usually up to


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Towing coverage, which pays for non-accident related tows

2. Auto Insurance in India

Car Insurance - Introduction

ICICI Lombard brings to you a comprehensive Package Policy for

your four-wheelers, which covers Loss or damage to the vehicle insured,

Personal Accident and Third Party Liability.

Policy Details

1. Policy coverage

2. Key benefits

3. Need for policy

4. Sum insured

5. Claim process

6. Why buy online
http://www.icicilombard.com/


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Policy Coverage

Our Motor insurance Policy is governed by the Indian Motor Tariff.

It covers you for:

Loss or damage to your vehicle: The policy covers you against any

loss or damage caused to the vehicle 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.

Personal accident cover: The motor insurance provides compulsory

personal accident cover of Rs. 2 lakhs for individual owner driver of the

vehicle insured while traveling in, mounting or dismounting from the

car. You can also opt for a personal accident cover for passengers.

Third party legal liability: This protects you against legal liability

arising due to accidental damages

Any permanent injury/ death of a person Any damage caused to the property.


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Key Benefits

You can avail of our cashless claim facility at our Cashless Garage

Network all across India. You can claim towing charges up to Rs 1,500 in the event accidental

damage or loss to your vehicle as specified under the policy

Avail of the following bonuses and discounts

1. No Claim Bonus: If you do not make a claim during the

policy period, a No Claim Bonus (NCB) is offered on

renewals. This discount can go as high as 50%. (NCB willonly be allowed provided the policy is renewed within 90

days of the expiry date of the previous policy.)

2. Transfer your NCB: You can transfer full benefits of No

Claim Bonus when you shift your motor insurance policy

from another company to ICICI Lombard.

The discount rate remains the same; provided you show evidence that

you are entitled to No Claim Bonus from your previous motor insurance

company.

Evidence can be in form of:

Renewal notice or

Letter confirming the NCB entitlement from the previous

insurer or

NCB declaration


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3. Voluntary Excess discount: A further discount on the

premium is available if you opt for a Voluntary Excess in

addition to the Compulsory Excess. (Compulsory Excess is

the amount of loss which the insured has to bear in eachand every claim.)

4. Additional discounts: If you are a member of a recognized

Automobile Association in India you can avail a discount

of 5% on the OD Premium subject to a maximum of Rs.

200.

5. Discount for Anti-theft Devices: In case you have

installed ARAI approved anti theft device in your vehicle,

you get a discount of 2.5 % on the OD Premium to a

maximum of Rs. 500.

6. Cover yourself and your family: You can also opt for

personal accident cover of up to Rs. 2 Lakhs for other

unnamed passengers in your car. For e.g. your family,

relatives, friends etc.

7. Customize your insurance with additional covers:

Electrical and/ or non-electrical items fitted to the vehicle

can be insured separately. For example: fog lights, music

system, seat covers. In case of vehicles fitted with bi-fuel

system such as Petrol/ Diesel and CNG/ LPG, permitted by

the concerned RTO, the CNG/LPG kit fitted to the vehicleis to be insured separately at an additional premium of 4%

on the value of such kit. You need to specifically declare

this in the proposal form.


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Need for Policy

The number of road accidents in India is estimated to be three times vis-

a-vis developed countries. The number of accidents for 1000 vehicles in

India is as high as 35 while the figure ranges from 4 to 10 in developed

countries

Comprehensive Car Insurance serves as an add-on to the mandatory

third-party cover and protects the car owner from financial losses,

caused by damage or theft of the vehicle

Sum Insured

The vehicles are insured at a fixed value called the Insureds

Declared Value (IDV). IDV is calculated on the basis of the

manufacturers listed selling price of the vehicle (plus the listed price of

any accessories) after deducting the depreciation for every year as per

the schedule provided by the Indian Motor Tariff.

If the price of any electrical and / or electronic item installed in the

vehicle is not included in the manufacturers listed selling price, then the

actual value (after depreciation) of this item can be added to the sum

insured over and above the IDV.


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Claim Process

Know all about making a claim

Motor Claim Procedure

In case of motor insurance claim, you can avail cashless facility for

the repair of your car in any of our All India Cashless Garage List.

However, if the car is serviced in a garage outside the purview of our

network, then you can claim reimbursement for the same.

In Case of an Accident

o Note the number of the other vehicle involved in the accident, if

any.

o Jot down the names and contact details of witnesses, if any.

o Contact our 24X7 insurance helpline number 1800 209 8888. Get

your claim number / reference number. Call centre representative

will provide you the details of documents required for claim

processing and also details of our preferred garage, where cashless

repair facility can be availed.

o File an FIR at the nearest police station in case of property

damage, bodily injury, theft and major damages.

After Registering the Claim

o Our customer service manager will contact you within 24 hours of

registering the claim.


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o Submit the copy of documents to the dealer / CSM and get

verified with the originals.

o Our CSM will get the estimate for the repairs of your vehicle and

give spot approval after assessment.o After completion of repair at our preferred garage we will make

payment of our share of the loss directly to the garage.

o The insured to pay the excess mentioned in the policy and

depreciation, salvage etc informed by the CSM.

Documents Required

For Accident Claims

o Claim form duly signed *

o RC copy of the vehicle

o Driving license copy**

o Policy copy (First two pages)

o FIR on a case-to-case basis

o Original estimate

o Original repair invoice, payment receipt (for cashless garage, only

repair invoice)

For Theft Claims

o Claim form duly signed*

o RC copy of the vehicle with all original keys

o Driving license copy

o Original policy copy


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o Original FIR copy

o RTO transfer papers duly signed along with Form 28, 29, 30 and

Form 35 (if hypothecated)

o Final report A no trace report from the police saying that thevehicle cannot be located.

For Third Party Claims

o Claim form duly signed*

o Police FIR copy

o Driving license copy

o Policy copy

o RC copy of the vehicle

* Stamp required in case of company registered vehicle

** Original documents

All India Cashless Garage List

Locate Garage near you

Search from our network of over 2500 cashless garages, to locate one

near your city. Just choose your state, city, the vehicle manufacturer and

click on submit and find the contact details of the garage nearby.


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Claim Form

Why buy online

Why buy online at www.icicilombard.com? We give you a few of

many reasons why -

o No Paperwork required to buy your policy online

o Instant Policy Issuance - Digitally signed policy is available 24X7

online, you can take prints instantly. The hard copy of the policy

is couriered to you within seven days.

o Multiple Payment options - Credit Card, Debit Card, Net Banking

or Cash Card

o 0% EMI option - You can pay online through ICICI Bank or

Citibank Credit Card at 0% EMI (interest-free EMI).

Note: EMI option subject to minimum annual premium of

Rs. 1500.

o Highest Levels of Security-

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