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CHAPTER 1
INTRODUCTION TO INSURANCE
INTRODUCTION
Insurance is a financial topic of paramount importance for every individual.
Insurance is designed to protect the financial well-being of the company and their
dependents in the case of unexpected loss. Some forms of insurance are required
by law, while others are optional. Agreeing to the terms of an insurance policy
creates a contract between the company and the insurance company. In exchange
for payments from they (called premiums) the insurance company agrees to pay
they a sum of money upon the occurrence of a specific event. That event may be as
mundane as a visit to the doctor or as serious as a car crash, depending on the type
of insurance.
After contacting an insurance company about entering into a policy, they will
receive a quote, which is the total amount of money they will need to pay over the
term of the insurance policy in exchange for coverage. When they have agreed to
pay this amount and the insurance company has agreed to insure they, they will
receive a copy of the policy detailing the terms and conditions of their policy. If an
insured incident occurs, they will make a claim for payment from the insurance
company. They will receive the amount they are insured for in the case of the
specific incident minus a deductible that they must pay for each claim. Higher
deductibles are associated with lower premiums and vice versa. Therefore, for
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claims that are likely to be made, it may be in their best interest to pay a higher
premium in exchange for a lower deductible.
Given the importance of insurance, it is essential to make sure that their coverage
is sufficient. Investigate all potential insurance policies carefully in terms of their
own needs at the time of purchase and throughout the term of the policy.
MEANING OF INSURANCE
The meaning of insurance is important to understand for anybody that isconsidering buying an insurance policy or simply understanding the basics of
finance. Insurance is a hedging instrument used as a precautionary measure against
future contingent losses. This instrument is used for managing the possible risk of
the future. Insurance is bought in order to hedge the possible risks of the future
which may or may not take place. This is a mode of financially insuring that if
such a incident happens then the loss does not affect the present well-being of the
person or the property insured. Thus, through insurance, a person buys security and
protection. A simple example will make the meaning of insurance easy to
understand. A biker is always subjected to the risk of head injury. But it is not
certain that the accident causing him the head injury would definitely occur. Still,
people riding bikes cover their heads with helmets. This helmet in such cases acts
as insurance by protecting him/her from any possible danger. The price paid was
the possible inconvenience or act of wearing the helmet; this i.e. equivalent to the
insurance premiums paid.
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NEEDS OF INSURANCE
1. Insurance Benefits encompass the facilities associated with buying of
insurances.
2. Insurance is mainly a instrument used by consumers for hedging the future
contingent risks related with life, health and non-life general issues.
3. Insurance benefits help the policy holder or beneficiary in combating with
the losses or hazards associated with him/her.
4. The policy holder buys the insurance to hedge against the future perceivedlosses by paying a regular amount to he insurance company known as the
Premium.
5. Insurance companies ensure financial reimbursement of the insured losses to
the policy holders or his/her beneficiary . This is the most coveted Insurance
Benefits.
6. But with time, more and more insurance companies have cropped up and
consequently the competition among them has increased.
7. Every company is trying to woo all the customers into its fold and in a way
offering more and more innovative.
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Benefits of Insurance :-
To the consumers :-
Affordability of Insurance:- The foremost insurance benefit in todays
world is the low insurance rate and premium one has to pay. While choosing
a insurance policy, every customer looks at this rate first and then to the
other associated benefits. The lesser the insurance rate, the more affordable
the insurance becomes. Thus, among all the insurance benefits, low
insurance rate and premium is the most coveted one.
Accessibility Of Insurance:- The easy accessibility of a insurance is the
next most coveted Insurance Benefits that the customers look for. The online
access to insurance companies and their policies has made them more
lucrative to the customers. Now-a-days, customers can search, compare and
select their insurance coverage through the click of a mouse from their own
residence. This has been observed that through online services, the insurance
companies have been able to reach more number of customers and
consequently their customer base has also mopped up significantly.
Some others benefits are:-
o Basic benefits of the insurance policy :- The person enrolling for the
policy is entitled to receive the financial compensation in case of
actual occurrence of the loss/hazard/damage.o Optional Insurance Benefits:- These benefit are also given by the
companies to their policy holders in order to entice them to access
their insurance package. These optional benefits include
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Health and dental insurance of the family, life insurance of the
spouse and the child,
Accidental death policy for the policy holder in addition to the
actual insurance for which he/she has enrolled for,
Long term and short term insurance plans against disability of
the policy holder
Unit linked insurance schemes meant for appreciation of the
accumulated capital during the life span of the same, managed
by an experienced and well-learned fund manager
o Pre-tax insurance benefits:- These benefits are an added advantage
to the insurance holders because they help them in saving a large
portion of their tax payment. When the tax-payment gets curtailed
then consequently their disposable income increases leading to more
enjoyment out of a secured life.
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CHAPTER 2
Insurance Regulatory and Development Authority (IRDA)
The Insurance Regulatory and Development Authority (IRDA) is a national agency
of the Government of India, based in Hyderabad. It was formed by an act of Indian
Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate
some emerging requirements. Mission of IRDA as stated in the act is "to protect
the interests of the Policyholders, to regulate, promote and ensure orderly growth
of the Insurance industry and for matters connected therewith or incidental
thereto."
In 2010, the Government of India ruled that the Unit Linked Insurance
Plans (ULIPs) will be governed by IRDA, and not the market regulator Securities
and Exchange Board of India.
Duties, Powers and Functions of IRDASection 14 of IRDA Act, 1999 lays down the duties, powers and functions of
IRDA:
1. Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.
2. Without prejudice to the generality of the provisions contained in sub-
section , the powers and functions of the Authority shall include, issue to the
applicant a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration;
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3. Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of Insurance claim , surrender value of policy and other terms
and conditions of contracts of insurance;
a. specifying requisite qualifications, code of conduct and practical
training for intermediary or insurance intermediaries and agents;
b. specifying the code of conduct for surveyors and loss assessors;
c. promoting efficiency in the conduct of insurance business;
d. promoting and regulating professional organizations connected with
the insurance and re-insurance business;
e. levying fees and other charges for carrying out the purposes of this
Act;
f. calling for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organizationsconnected with the insurance business;
g. control and regulation of the rates, advantages, terms and conditions
that may be offered by insurers in respect of general insurance
business not so controlled and regulated by the Tariff Advisory
Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
h.
specifying the form and manner in which books of account shall bemaintained and statement of accounts shall be rendered by insurers
and other insurance intermediaries;
i. regulating investment of funds by insurance companies;
j. regulating maintenance of margin of solvency;
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k. adjudication of disputes between insurers and intermediaries or
insurance intermediaries;
l. supervising the functioning of the Tariff Advisory Committee;
m. specifying the percentage of premium income of the insurer to
finance schemes for promoting and regulating professional
organizations referred to in clause (f);
n. specifying the percentage of life insurance business and general
insurance business to be undertaken by the insurer in the rural or
social sector; and
o. exercising such other powers as may be prescribed from time to time,
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CHAPTER 3
MOTOR INSURANCE
Meaning
Motor Vehicle Insurance had its beginning in the United Kingdom. Motor
Insurance belongs to miscellaneous class of insurance. Motor Insurance got great
importance recently. Motor insurance accounts for a major portion of the
miscellaneous premium income of insurance companies. I the older times, personswho were injured or killed through the negligence of the Motorists could not get
any compensation from the Motorists. Because they did not have the financial
resources to pay the compensation. And also there were no insurance schemes
resent at that time. In order to safeguard the financial hardship caused to the
persons, the Motor Vehicles Act 1939 introduced Compulsory Motor Vehicle
Insurance.
The Motor Vehicles Act 1939 was amended in 1988.as per the provision of this
Act it was made compulsory for the motorists to insure against the risk of liability
to third parties. In other words the insurance of motor vehicles against risk is not
made compulsory, but the insurance of third party liability arising out of the use of
motor vehicles in public places is made compulsory.
The rate of premium under Motor Vehicle Insurance is standardized because the
business is tariff, no insurer can charge lower rates than the tariff rates and noinsurer can grant benefits exceeding than those prescribed by the tariff.
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Types of Motor Insurance:
The word Motor broadly covers a lot of classes of vehicles plying on the roads.
These may be two-wheelers like scooters and motorbikes, three-wheelers or four
wheelers like private cars, jeeps, buses, trucks, commercial taxis and other
vehicles.
Car Insurance
This is the fastest growing segment in the insurance sector as car insurance ismandatory while buying a new car. Major car manufacturers are tying up with
leading insurance companies to provide quick insurance to its customers. Car
insurance covers loss or damage by accident, fire, lightning, riots, earth quake,
hurricane, terrorist attacks, explosion, theft, third partys claims and damages (like
liability for third party injury or death, third party property and liability to paid
driver). On payment of appropriate additional premium it covers loss or damage to
electrical or electronic accessories and other significant items.
Car insurance (also known as auto or motor insurance) is done to protect share
holder vehicle from unforeseen risks. It basically provides protection against the
losses incurred as a result of unavoidable instances. It helps cover against theft,
financial loss caused by accidents and any subsequent liabilities. The cover level of
Car insurance can be the insured party, the insured vehicle and third parties (carand people). The premium of the insurance is dependent on certain parameters like
value of the car, type of coverage, vehicle classification; voluntary excess etc
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All the states in India require a minimum amount of insurance. Car insurance can
help offset the loss of huge sum in the following manner:
Provides benefits to survivors when an accident results in death. It covers lawsuits, including legal fees brought against share holder as
the result of an accident.
Covers the bills of vehicle repairs due to damage caused in an
accident.
Covers damage caused by other than an accident for example, theft,fire, etc.
Additional discounts: Car insurance policies allow premium
discounts for theft or for owning more than one policy with the same
insurer. It also provides added advantage to extend coverage to others
driving share holder car with share holder permission.
No Claim Bonus: If share holder do not make a claim during the
policy period, a No Claim Bonus is offered on renewals provided
share holder fulfill certain terms and condition
CAR INSURANCE GLOSSARY
Like all other industries, insurance industry also use specific terms that is oftendifficult for a layman to understand the meaning. In the following we have tried to
simplify the terms as much as possible.
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Representative
An insurance sales person; Independent representative who works for or on behalf of an insurance company; Broker is an insurance sales person who deals with
agents and companies to find the right insurance policy for the customer.
Claim - An insurance owner requests the insurer to pay the loss covered under a
policy. Share holder claims to share holder company are "first-party claims. When
a person claims against the other person's insurance company it is called "third-
party claims."
Collision Coverage
Optional insurance covers the damage to share holder car caused by collision with
another car or object. Is frequently required if share holder have a car loan.
Comprehensive physical damage coverage
Optional insurance covering damage to share holder car caused by something other
than a collision or the car rolling over, such as fire, theft, vandalism, flood or hail.
Is frequently required if share holder have a car loan.
Conditions
These are part of an insurance policy that states the obligations of the insuranceowner and those of the insurance company in order for the policy to be in effect.
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Insured Declared Value (IDV)
The premium is calculated on the basis of the IDV of the vehicle, which isbasically the depreciated value of the vehicle agreed upon by the insurer and the
policyholder. The IDV of a vehicle reduces with age.
Liability coverage
Offers share holder and any other party involved in an accident a significant sum
to cover mainly the medical expenses. Normally these figures are divided into
three parts, first one represents the maximum share holder insurance will pay an
individual, second represents a cover to all individuals and third one covers
damage to another car or property at the time of collision.
No Claim Bonus (NCB)
If share holder does not make a claim during the policy period, a No Claim Bonus
is offered on renewals. Insurers reward policyholders by giving them substantial
discounts on the Own Damage Premium. However the NCB is applicable only if
the policy is renewed within 90 days of the expiry date of the previous policy.
Own Damage Premium (OD)
Payment of OD premium entitles share holder to claim compensation in case of
theft or damage of share holder vehicle due to fire, earthquake, etc.
Personal Accident Cover
It covers share holder not only against Accidental Death and Permanent Total
Disablement (PTD), but also against terrorism and acts of terrorism.
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Policy Period -It is the period when the policy is in force.
Policy Holder Owner of the policy.
Premium - The amount a policy holder agrees to pay the insurer for covering the
risk.
Proof of loss
Documents share holder provide to the insurer to support share holder request for
payment of losses. The company uses these documents to determine whether and
how much it will pay. For example written repair estimates from auto body shops,
police reports, etc.
Uninsured motorist coverage Uninsured motorist coverage can pay for the
injuries caused to share holder and damage to share holder.
Tips for buying car Insurance
Motor Insurance can be confusing for many people as there is plethora of Motor
policies and is an arduous task to choose a Motor policy which share holder should
really carry to protect share holder self compared to various coverages available.
1. Depending on the vehicle share holder have
2. Claim settlement
3. Customer service
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4. Discount & Deductable %
5. IDV (Insured Declared value)
Two Wheelers Insurance
Two wheeler insurance is another type of popular auto insurance in India. It is
governed by the Indian Motor Tariff. This insurance provides protection against
natural and man made calamities like: fire, rockslide, landslide, storm, hurricane,
flood, earthquake, burglary, theft, riots or any damage caused to the vehicle in
transit by road, air, inland waterway or rail. Two wheeler insurance providesmandatory personal accident cover of Rs. 1 lakh to the insurer. This accident cover
can also be opted for passengers. It also protects against legal liabilities arising due
to third parties injury/death or damage caused to its property there are two types of
motor insurance
1. Third Party Insurance
This insurance is mandatory by law. It protects a policy holder against losses
which arise due to bodily injury/death to a third party or any damage to
property. Here third party includes people travelling with share holder or
whom the insured person injures and claims damages at the time of accident.
But this insurance does not protect share holder, share holder vehicle and co-
passengers against losses which arise due to bodily injury/death.
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2. Comprehensive Insurance
In addition to third party coverage, this policy covers share holder, share
holder car and co-passengers against damages /losses arising from
unforeseen calamities, hence it is prudent to purchase this policy.
Commercial Vehicle Insurance
This type of insurance covers all those vehicles which are not used for personal
purpose. Trucks, buses, heavy commercial vehicles, light commercial vehicles,
multi utility vehicles, agricultural vehicles, ambulances etc are covered under this
insurance. The premium is calculated on the basis of the make and model of the
commercial vehicle, place of registration, year of manufacture, current showroom
price and whether the insurer is individual or corporate. Insurance Companies in
collaboration with the automobile manufacturing companies chalk out different
kind of easy and less complicated plans for safe and easy insurance policy.
Benefits of Car Insurance
All the states in India require a minimum amount of insurance. Car insurance can
help offset the loss of huge sum in the following manner:
Provides benefits to survivors when an accident results in death. It covers lawsuits, including legal fees brought against share holder as
the result of an accident.
Covers the bills of vehicle repairs due to damage caused in an
accident.
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Covers damage caused by other than an accident for example, theft,
fire, etc.
Additional discounts: Car insurance policies allow premium
discounts for theft or for owning more than one policy with the same
insurer. It also provides added advantage to extend coverage to others
driving share holder car with share holder permission.
No Claim Bonus: If share holder do not make a claim during the
policy period, a No Claim Bonus is offered on renewals provided
share holder fulfill certain terms and conditions
Classification of Motor Vehicles
For purpose of insurance, Motor Vehicles are classified into three board
categories-
(a) Private Cars (not used for commercial purposes)
(b) Motor Cycles and Motor Scooters
(c) Commercial Vehicles.
Commercial Vehicles can further be classified into-
(1) Goods Carrying Vehicles
(2) Passenger Carrying Vehicles (e.g.) (motorised rickshaws, taxis, buses
etc)
(3) Miscellaneous Vehicles (e.g.) (hearses, ambulances, cinema film
recording and publicity vans, mobile dispensaries etc.)
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Kinds of policies
To cover the losses arising in respect of car vehicles, the following various kinds of
policies are granted under car vehicle insurance
1) Act liability: this policy is designed to meet the requirements of motor
vehicle act 1988, which provides for compulsory insurance in regard to
liabilities arising out of the use of motor vehicle in a public place this policy is
also called as form A policy. This policy applies uniformly to all classes of
vehicles, whether private cars, commercial vehicles, motor cycles or motor
scooters.
2) Third party policy:
This policy under takes the liabilities of the third parties who suffered loss in
connection with the damage of property and personal injury or death
This policy may be extended to include
a. Fire
b. Theft risk
c. Legal liability to persons employed in connection with the operation and or
maintenance and or loading or unloading of car vehicle
The private car policy extend to indemnify the insured against legal liabilities
incurred by him subject to limitations of indemnity while personally driving a
private motor car
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3) Comprehensive policy:
This policy covers own damage, losses and act liability. The policy may extend
to cover additional liabilities as provided in the tariff. This policy is called as
Form B policy. This policy has 3 sections, they are:
(1) First Section covering damage to the vehicles
(2) Second Section covering the insured liability to third parties
(3) Third Section which differs according to the class of the vehicles.
The comprehensive policy covers the following risks:
(a) Loss or damage (Own damage)
(b) Third party liabilities
(c) Repair charges, medical expenses
(d) Remover charges of repairer (e) Damage to car parts or body.
(f)
4) Garage Insurance Policy:
Under this policy, such motor vehicles risks are covered which are related to
the motor vehicles standing in the motor garages or service stations. As such,
all the risks which can affect the vehicles kept in the garage or at servicestations and any loss caused to the motor vehicle is agreed to the indemnified
by the insurance company.
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5) Collision Insurance Policy:
This policy is designed to meet the losses caused due to any collision or
accident between two or more vehicles indemnified by the insurance
company.
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CHAPTER 3
PROCEDURE FOR CAR INSURANCE
The following are the procedure for taking car insurance, they are as follows
1. Proposal FormsIn Motor Insurance Contract the Proposal Form is used, as a rule they
constitute the means of communicating the offer to the insurers or for
making proposal for motor insurance. It is also customary to indicate on the
form a brief statement of the cover which is provided by the appropriate
policy, or the terms and conditions which relates to motor insurance of:
a) Identification of Vehicles (register number, horse power, shape, size
etc.)
b) Risk identification
c) Declaration etc.
2. Rating of Insurance
After selecting an appropriate policy, the proposal form elicits all
information necessary to determine the amount of premium and
underwriting. Some examples of rating are given below:
(a) Private Cars: Rates are determined on the basis of the cubic capacity(Power of the engine) as given by manufacturer, Insured Estimated value
and the Zone of operation.
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(b) Goods Carrying Vehicles: the rate or amount of premium is determined
on the basis of gross vehicle weight i.e., the total weight of the vehicle
and load certified by the registering authority
3. Tariff Rules
Some important tariff rules prescribed by the tariff are as follows:
(1) Agreed value policies are not allowed except for vintage cars.
(2) Policies have to be issued in the name of the registered owner only.
(3) The prescribed cover note should be used when full details are not
available. The cover note incorporate certificate if insurance.(4) The tariff prescribes the procedure for issue of a duplicate certificate when
the original is lost, torn, defaced etc.
(5) The Tariff provides concessions e.g. return of premium, restricted cover
etc. When the vehicle is laid up in a garage and not in use for a period of
two consecutive years or more.
4. Policy Form
As soon as the proposal form is accepted Cover Note is issued Policy forms,
like proposal forms, vary within wide limits as between the different classes
of insurance, but they have certain features in common. The policy is not the
contract itself, but the evidence of the contract. As soon as the policy is
issued, the cover note is cancelled.
5. Term of Insurance
The Motor Insurance Policy is issued generally for one year. However, the
policy can be issued for less than one year but the premium rate will be
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higher e.g. the premium rate is three fourths of annual premium of the policy
issued for six months.
6. Extra Benefits
During the currency of policy, after payment of extra premium, additional
benefits can be added to the original policy. Thus, additional risks can be
included to the original policy.
7. Change of VehicleThe insured vehicles can be disposed of along with policy. The term of
policy will remain the same. The policy will continue up to the unexpired
period with the purchaser of the car. Similarly, the insured can replace
another car under the same policy.
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CHAPTER 4
SETTLEMENT OF CLAIMS UNDER
CAR INSURANCE
For settlement of insurance claim under car Insurance, the following claims usually
occur in the following ways:
(a) Claims for own damage
(b) Claims for theft
(c) Claims for third party.
1. Claims for Own Damage
On receipt of notice of loss, the policy records are checked to see that the policy is
in force and that it covers the vehicle involved. The loss is entered in the claim
register and a claim form is issued to the insured for completion and return. The
insured is also requested to submit a detailed estimate of repair charges.
Assessment or Survey Report:
Independent Automobile Surveyors are assigned the task of assessing the cause
and extent of loss. They inspect the damaged vehicle, and submit their survey
report along with the copy of the policy, Claim form and estimate cost of repairs.
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Claim Documents:
Apart from claim form and survey report the other documents required for
processing the claim are:
(1) Driving Licence
(2) Registration Certificate Book
(3) Fitness Certificate
(4) Permit
(5) Police Report
(6) Financial Bill from repairs(7) Satisfaction Note from the insured
(8) Receipted Bill from the repair if paid by insured.
Settlement of Claim: On the basis of survey report and claim documents the
insurance company determines the extent of its liability and the loss is indemnified.
The usual practice in the case of damage of motor vehicle, the insurance company
may get the vehicle repaired instead of making cash payment to the insured.
2. Claims for Theft or Total Loss Claims
Total Losses can also arise due to the theft of the vehicle and its remaining
untraced by the policy authorities till the end. These losses will have to be
supported by a copy of the First Information Report lodged with police
authorities immediately after the theft has been detected. If the policeauthorities do not succeeded in recovering the vehicle for theft claims, the
insurer is requested to submit the certificates of SIDE No. or CR No.,
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certification of true and undetected, R.C. Books and Taxation certification
by vehicle etc. Along with documents related to vehicles and insurers. On
the basis of investigation or inspection with valid documents the insurancecompany determines the total loss or theft is indemnified.
3. Claims for Third Party
Section 165 of the Motor Vehicle Act 1988 empowers the State Government
to set up Motor Accident Claims Tribunals, for adjusting upon third party
claims.On the receipt of notice of claim from the insured, or the third party or
from the Motor Accident Claims Tribunals, the matter is entrusted to an
advocate. The insured is requested to submit full information relating to
accident along with the following documents:
(1) Driving Licence
(2) Police Report
(3) Details of drivers pro secution
(4) Death Certificate
(5) Coroners Report
(6) Medical Certificate
(7) Details of age, income, no. of dependents etc.
On the basis of the written statements the matter is then filed with Motor
Accident Claims Tribunals by the Advocate, the MACT determines the
amount of claims to the third party.
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Car Insurance Cover
Car insurance or Motor Insurance is mandatory by law. It is a legal requirement to
have a minimal level of insurance before driving a car in India. Coverage would
differ by product; however following is a list of possible coverages:
1. Bodily injury liability- It covers bodily injury claims of people who get injured
in an accident.
2. Property damage liability- It covers property damages to third partiessuch asanother person's car.
3. Medical payments- This payment is done to the policy owner and other
pas sengers in the policy owners car.
4. Uninsured and underinsured motorist coverage. This coverage protects share
holder when the negligent driver has no insurance or insufficient insurance. Inmost states, this covers only bodily injury losses, though some states do include
property damage losses.
5. Physical damage covers damage to share holder car in the following instances:
a. Covers losses to share holder car involved in a collision.
b. Covers non-collision physical damage if share holder car is damaged in storm
or windshield breaks etc.
Car insurance is packaged into different coverage types and is broadly divided into
two as discussed below:
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1. Comprehensive car insurance policy
It protects against any loss or damage caused to the vehicle and its insured
accessories as a result of natural and man-made calamities. These calamities
can be broadly classified as Natural Calamities and Man Made
Calamities. Natural calamities include: fire, explosion, lightning, flood,
typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost,
landslide, rockslide, fire and shock damage due to earthquake. Man-made
calamities include: burglary, housebreaking, theft, riot or strike, accident byexternal means, malicious act, terrorist activity and damage during travel by
road, rail, inland-waterway, or air. This policy also includes personal
accident cover, which provides accident cover for the driver of the vehicle
while driving. The owner can avail personal accident cover for passengers in
the vehicle. Another mandatory feature is the third party legal liability cover.
It protects the owner against legal liability arising from an accident causing
any permanent injury or death as well as any damage to the property. It also
covers for fire and theft provided the vehicles are laid up in a garage and not
in active use.
2. Third Party car insurance policy -
An insurance policy is between two parties, the insurer and the insured.
Therefore, a third party is any person who is neither the insured nor the
insurer. Third parties are mainly pedestrians, fare-paying and non fare
paying passengers in a vehicle. People in the vehicles like the driver, owner
or passengers are also third parties. Fare paying passengers are the people
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who travel in public transport such as taxis, auto rickshaws and buses. Non-
Fare Paying Passengers are the people who are allowed to travel in a vehicle
for free. The Third Party car insurance policy covers share holder legal
liability for any compensation to be paid arising from accident caused by
share holder vehicle. It includes liability for death or injury to third parties
like pedestrians, occupant of other vehicles, and outsiders other than
passengers. Passengers of private vehicles and pillion riders are also
considered to be covered. As an owner of the vehicle share holder are
insured against death or injury caused to passengers carried in the vehicle for
hire. The liability covered is unlimited in case of death or injury. Damage to
third partys property is usually covered by the insurance policy.
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CAR INSURANCE CLAIM PROCESS
In case of car insurance claim, share holder can avail cashless facility for the
repair of share holder vehicle in any of our cashless garage network. However, If
the vehicle is serviced in a garage outside the purview of our network, then share
holder can claim reimbursement for the same.
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In Case of an Accident
Note the number of the other vehicle involved in the accident, if any.
Note down the names and contact details of witnesses, if any.
Contact our toll free number 1-800-209-8888 and get share holder claim
number / reference number.
The Call Centre Representative will provide share holder with the details of
the documents required for claim processing and also details of our preferred
cashless garage.
File an FIR at the nearest police station in case of property damage, bodily
injury, theft and major damages.
After Registering the Claim
Our Customer Service Manager (CSM) will contact share holder within 24
hours of registering the claim. Submit all the required documents to the dealer / CSM and get them verified
with the originals.
Our CSM will get the estimate for the repairs of share holder vehicle and
give spot approval after assessment.
Payments that need to borne by us at our preferred garage will be made
directly to the garage on completion of the repairs. The balance amount will have to be paid by the insured as per the terms and
conditions of the policy, which will be informed by the CSM.
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Documents Required
For Accident Claims
Claim form duly signed*
RC copy of the vehicle
Driving License copy
Policy copy (First two pages)
FIR on a case-to-case basis Original Estimate
Original Repair Invoice and Payment Receipt (for cashless garage, only
repair invoice)
For Theft Claims
Claim form duly signed*
RC copy of the vehicle with all original keys
Driving License copy
Policy copy
Original FIR copy
RTO Transfer Papers duly signed along with Form 28, 29, 30 and Form 35
(if hypothecated)
Final report A no trace report from the police saying that the vehicle
cannot be located.
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For Third Party Claims
Claim form duly signed*
Police FIR copy
Driving License copy
Policy copy
RC copy of the vehicle
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CHAPTER 5
CAR INSURANCE ONLINE POLICY
Features and Benefits of Automobile Insurance Online Policy India
Car Insurance Online/Auto Insurance governed by the India Motor Tariff Act. The
key features are:
o Protection from loss of car or damage to share holder car with Auto Car
Insurance plan
o Indemnity for third party property damage up to a limit of Rs. 7.5 lakhs
Speedy authorisation of repairs to get share holder car back on the road
o Personal Accident Cover for share holder, share holder paid driver and the
occupants in the car
Customer Helpline to give share holder support and guidance when share
holder need it
Efficient and worry free claims service to give share holder peace of mind
only with Auto Car Insurance plan from Royal Sundaram
o First Information Report is not required (Unless legally mandatory)
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Extra Benefits of Car Insurance Policy Online
- Special Model Wise Discounts on Own Damage Premium for share holder car
only with Auto Car Insurance plan
- Discount in premium up to 5% on the Own Damage Premium (or) Max of
Rs.200/
- for a valid Member of Automobile Association of India
- Discount in premium up to 2.5% on the Own Damage Premium (or) Max of Rs.
500/- on Installation of Anti-Theft Device in share holder car
- Discount of Rs. 100/- in Third Party Basic Premium on reduction in Limits of
Liability for Third Party Property Damage with Auto Car Insurance plan
- Discount of 35% on Own Damage Premium subject to a maximum of Rs. 2,500/-
on opting maximum voluntary deductible of Rs. 15,000/-
- Transfer of No Claim Bonus (NCB) from other insurance company on renewal
with Royal Sundarams Car Insurance Policy Online
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Car Insurance Online Policy Coverages
a) Loss or damage to share holder car: This Auto Car Insurance policycover share holder against any loss or damage caused to the vehicle
due to the following natural and man made calamities
What is covered in Auto Car Insurance
Policy
What is not covered in Auto Car Insurance
Policy
- Accidental & External Damage - Wear and tear, Depreciation or any consequential
loss
- Fire & Explosion - Mechanical/ electrical breakdown
- Riot & Strike - Damage caused by a person driving the car
without a valid license
- Malicious Act - Damage caused by a person driving the car under
the influence of alcohol or drugs
- Burglary, housebreaking/ Theft - Other exclusions as per the policy terms and
conditions
- Landslide
- Transit
- Earthquake- Storm and Flood
- Terrorism
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b) Liability to Third Parties (Additional Auto Insurance Policy Covers)
What is covered in Auto Car Insurance
Policy
What is not covered in Auto Car Insurance
Policy
- Legal protection for death or injury
claims
from third parties
- Damage to share holder personal
property
- Legal protection for damage to third party
property
- Costs and expenses incurred
without our prior written
consent
- Legal costs and expenses - Other exclusions as per the
policy terms and conditions
C) Personal Accident Cover to Owner/ Driver: This insurance policy
provides compulsory Personal Accident Cover to the owner/ driver whilst
driving the vehicle including mounting into/ dismounting from or traveling in
the insured vehicle as a co driver for Rs. 2 lakhs.
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Extra Covers offered under Car Insurance Online Policy
- Personal Accident Cover to Unnamed Passengers and paid driver for a maximum
of Rs. 2 lakhs per person
- Personal Accident Benefits for share holder, share holder paid driver and
occupants of share holder car
- Legal liability to paid driver employed in connection with the operation of insured private car
- Legal Liability to the Employees of the Insured other than paid driver who may
be driving or travelling in the car
- Comprehensive cover for Electrical/ Electronic/ Non-Electrical Fittings in the car
- Cover for CNG Kit and Bi-Fuel System which are endorsed in the RC book
Damage to share holder car
This Car Auto Insurance Policy provides protection for share holder car from loss
or damage caused by misfortunes such as impact, fire, theft, riot, strike, storm,
flood, landslide, malicious act and earthquake.
Legal Liability to Third Parties
This policy provides for the customers legal protection against death or injury
claims from third parties and for damage to third party property up to the limit of
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Rs. 7.5lakhs. Car Insurance Online also includes cover for share holder legal costs
and expenses agreed by Royal Sundaram.
Personal Accident
Under this Online Car Auto Insurance we provide the Owner Driver a Capital Sum
Insured of Rs. 2 lakhs for death or permanent total disability. We also provide an
option to insure other named and unnamed occupants of the car for Personal
Accident benefits for death and serious injuries.
Wider Legal Liability for share holder Paid Driver
Auto Insurance/Car Insurance Online also gives share holder the option to provide
for a wider cover of share holder legal liability to share holder Paid Driver, over
and above what is offered as per the Workmens Compensation Act.
Deductible
Car Auto Insurance Online includes a deductible of Rs.500 for cars not exceeding
1,500cc and Rs.1,000 for cars exceeding 1,500cc. This means that share holder pay
the first amount of each claim for loss or damage to share holder car. This policy
gives share holder the opportunity to get a discount on the premium if share holder
choose to increase this deductible. The discount is allowed from the Loss or
Damage Section premium.
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CONCLUSION
Car insurance gives confidence to drive peacefully. In emergencies it acts like a
boon to the insurance holder. With so many car insurance companies vying for
customer base in the market, it is quite difficult to make a decision like choosing
the right policy and insurer. Figuring out the right insurance policy, fulfilling the
requirement and being cost effective can be time consuming. Many a times car
insurance may seem complex but having it saves share holder spending a fortune
later. At policy bazaar share holder can compare car insurance quotes online and
save up to 40% on share holder premium. Motor insurance protects share holder
vehicle against losses arising from unforeseen risks. It basically covers financial
losses arising from accidents, theft and other natural calamities. Motor insurance is
a contract for an automobile in which the insurance company agrees to pay for
share holder financial loss resulting from a said specified event.
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