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MDC, 1st Floor, Azad market, Pirmuhani Chowk, Kadamkuan, Near Uma Cinema, Patna, Bihar, 800003
Motor insurance
Motor insurance (also known as car insurance, motor insurance, or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Motor insurance is a type of insurance policy that provides financial protection to vehicle owners against damages or losses caused to their vehicles or third-party liabilities. Third-party insurance is a legal requirement. The vehicle's owner is legally responsible for any injury, danger, or damage to life or property of a third party caused or arising from the use of the vehicle in a public place. Driving without insurance in a public place is a punishable offence under the Motor Vehicles Act of 1988.
Benefits
| Financial protection against accidents, theft, or damage | Covers third-party liabilities | Optional add-ons for additional protection |
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Types of Motor Insurance:
| 1. Two wheeler insurance | 2. Private car insurance | 3. Commercial vehicle insurance |
|---|---|---|
| It covers accidental insurance for the driver of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the beginning of a policy period | The fastest growing sector in India as it is compulsory for all new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture. This amount can be reduced by asking the insurer for a no claim bonus (NCB) if no claim is made for insurance in the previous year. | It provides cover for all the vehicles which are not used for personal purposes like trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle. |
Types of motor insurance policies:
| 1. Comprehensive Insurance: | 2. Third-Party Liability Insurance: | 3. Own Damage Insurance: |
|---|---|---|
| Covers damages to your vehicle and third-party liabilities. A comprehensive car insurance policy is a type of car insurance policy which covers a policyholder against the damages sustained by both the parties involved in an uncertain event like fire and accident. | Mandatory in India, covers damages to third-party property or bodily injury. Third-party insurance, which is also sometimes referred to as ‘act-only’ insurance, is a statutory requirement for all vehicle owners as per the Motor Vehicle Act. | Own-damage insurance covers your vehicle against damages due to accidents, theft, and natural or man-made disasters. |
Period of Insurance:
Generally, a vehicle insurance policy is valid for one year. However, long-term third-party vehicle insurance has been made mandatory for two-wheelers and four-wheelers as per the Supreme Court order. While the long-term insurance policy is 3 years for four-wheelers, it is 5 years for two-wheelers.
Additional Coverage Options:
| 1. Zero Depreciation: | Covers full repair costs without depreciation deduction. |
| 2. Personal Accident Cover: | Provides financial protection in case of accidents. |
| 3. Roadside Assistance | Offers emergency services like towing, fuel delivery, and battery jump-starts. |
| 4. Engine Protection: | Covers engine damage due to water logging, oil leaks, or other external factors. |
| Consumables Cover: | Covers costs of consumables like batteries, tires, and spark plugs. |
| 6. Return to Invoice: | Provides compensation if your vehicle is stolen and not recovered. |
| 7. NCB (No Claim Bonus) Protection: | Protects your no-claim bonus in case of a claim. |
How To Make a Claim - Motor Insurance
A claim under a motor insurance policy could be
| ● For personal injury or property damage related to someone else. This person is called a third party in this context) | OR | ● For damage to your own, insured, vehicle. This is called an own damage claim and you are eligible for this if you are holding what is known as a package or a comprehensive policy. |
Third Party Claim
In a third party claim, where your vehicle is involved, it is important to ensure that the accident is reported immediately to the police as well as to the insurance company. On the other hand, if you are a victim, that is, if somebody else’s vehicle was involved, you must obtain the insurance details of that vehicle and make an intimation to the insurer of that vehicle.
Own Damage Claim
In the event of an own damage claim, that is, where your own vehicle is damaged due to an accident, you must immediately inform the insurance company and police, wherever required, to enable them to depute a surveyor to assess the loss.
Do not attempt to move the vehicle from the accident spot without the permission of police and the insurance company. Once you receive permission for removal of the vehicle and for repairs, you can do so.
If your policy provides for cashless service, which means you do not have to pay out of your pocket for covered damages, the insurance company will pay the workshop directly.
In either of these situations, you must intimate the insurance company immediately.
Theft Claim
If your vehicle is stolen, you must inform the police and the insurance company immediately. In addition you must keep the transport department also informed. As soon as you receive the policy document, read about the procedures and documentation requirements for claims rather than wait for a claim to arise.
If you have to make a claim, ensure that you collect all the required documents and submit them along with the requisite claim form duly filled in, to the insurance company. There may be certain specific documentation requirements for specific types of claims.
For instance in respect of a theft claim, there is a special requirement that you should surrender the vehicle keys to the insurance company
COMPARISON OF MOTOR POLICIES
| Parameters | Third-party insurance | Own Damage | Comprehensive |
|---|---|---|---|
| Definition | Third-party insurance only covers damages to a third-party vehicle or property and injuries to/death of a third-party person | Standalone own damage insurance covers the damages only to the insured car. | Comprehensive car insurance covers third-party liabilities as well as own damage under a single policy premium. |
| Insurance Coverage | The insurance cover is limited to third-party damages only. | The standalone own damage insurance only offers protection to your insured vehicle | This insurance coverage is extensive and includes third party as well as own damage protection. |
| Advantages | Being a compulsory cover, third-party insurance protects you from legal traffic fines and from third-party liability costs. | An own damage car insurance cover enables protection from natural disasters as well as damage due to human causes. Moreover, you can enhance the coverage with add-on benefits and earn a No Claim Bonus discount too | The comprehensive insurance covers the losses from third-party damages, covers own damage, enables you to enhance the coverage with add-ons and lets you enjoy a No Claim Bonus discount on premiums. |
| Insurance Premium Amount | Since a third-party cover is compulsory but basic, the insurance premium amount is quite affordable. | The standalone own damage car insurance premium is high at the start but decreases as the car gets older. | The premium for this insurance cover is high as it includes third-party and own damage premiums. However, the own-damage premium decreases with time. |
| Depreciation Rate | The insurance premium is not affected by depreciation. | The depreciation rate affects the insurance premiums. | The own damage component in comprehensive car insurance is affected by depreciation. |
