A STUDY ON AUTO INSURANCE

Introduction
Auto insurance (also known as car insurance or motor insurance) is insurance purchased
for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial
protection against physical damage and/or bodily injury resulting from traffic collisions and
against liability that could also arise there from. The specific terms of vehicle insurance vary
with legal regulations in each region. To a lesser degree vehicle insurance may additionally offer
financial protection against theft of the vehicle and possibly damage to the vehicle, sustained
from things other than traffic collisions.
Auto Insurance in India deals with the insurance covers for the loss or damage caused to
the automobile or its parts due to natural and man-made calamities. It provides accident cover
for individual owners of the vehicle while driving and also for passengers and third party legal
liability. There are certain general insurance companies who also offer online insurance service
for the vehicle.
Auto Insurance in India is a compulsory requirement for all new vehicles used whether
for commercial or personal use. The insurance companies have tie-ups with leading automobile
manufacturers. They offer their customers instant auto quotes. Auto premium is determined by a
number of factors and the amount of premium increases with the rise in the price of the vehicle.
The claims of the Auto Insurance in India can be accidental, theft claims or third party claims.
Certain documents are required for claiming Auto Insurance in India, like duly signed claim
form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy.

There are different types of Auto Insurance in India:

Private Car Insurance In the Auto Insurance in India, Private Car Insurance is the fastest
growing sector as it is compulsory for all the 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.
Two Wheeler Insurance The Two Wheeler Insurance under the Auto Insurance in India covers
accidental insurance for the drivers 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 time of the beginning of policy period.
Commercial Vehicle Insurance Commercial Vehicle Insurance under the Auto Insurance in
India provides cover for all the vehicles which are not used for personal purposes, like the 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. The auto insurance generally includes:

Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary,
housebreaking or theft, malicious act.

Liability for third party injury/death, third party property and liability to paid driver

On payment of appropriate additional premium, loss/damage to electrical/electronic

accessories

The auto insurance does not include:

Consequential loss, depreciation, mechanical and electrical breakdown, failure or

breakage

When vehicle is used outside the geographical area

War or nuclear perils and drunken driving.

With 85 per cent of all road deaths worldwide estimated to occur in low-income countries (LIC)
where road safety capability is just being developed, the scale of the human tragedy is unlikely to
decrease in the forseeable future. While the traditional focus of road safety interventions has
been on prevention activities, i.e. prevention is better than cure, this has often led to a lack of,
or at least a belated, consideration of those casualties not prevented. As the basic objective of
insurance systems is to compensate for losses incurred, the motor and personal injury insurance
sector have a potentially key role in ameliorating the consequences of those casualties and
crashes not avoided. They will also have an economic interest in the reduction of outlays, via a
reduced number of casualties and crashes.
Aim of the Project
Key issues to be considered were highlighted in the inception phase and included the following:

Existing and potential influence of the motor insurance industry Fair and timely

compensation of road victims

Promotion of safe driving and discouragement of unsafe driving by insurers
Funding of road safety activities from motor insurance
Likely investment in road safety when faced with a loss making business

Literature review
Background information was gathered from a variety of sources identified by library and internet
searches. The library search included TRACS (Transport and Road Abstracting and Cataloguing
System), the English version of the Institute of Transport Research Development (IRTD)
database that regularly receives material from the USA, Australia, Scandinavia, the Netherlands,
Canada and other countries as well as TRLs own UK input. The database is updated daily and
currently contains some 200,000 abstracts. PROJEX, which contains summaries of current and
recently completed projects undertaken by government and private research establishments,
industrial organisations, universities and consultants throughout the world, was also searched.
TRLs press clippings of transport related articles from UK newspapers were also monitored for
any insurance related news.
Much more information on individual insurance aspects for different countries was found using
the internet. One of the key references, a Review of Personal Injury Compensation, undertaken
for Irelands Department of Trade and Industry was found via the internet as were the motor
insurance websites from Botswana and Mauritius

Motro vechicle insurance law in india

Motor vehicle insurance law in India is governed by the Motor Vehicles Act, Insurance Act and
aspects of insurance contracts are governed by Indian Contract Act, Transfer of Property Act and
few others. Motor vehicle insurance is the insurance coverage of the risk of third party arising
out the use of motor vehicle and also for covering the risk of damage caused to the vehicle.
Taking insurance policy for coverage of certain risks are made compulsory and coverage for
other risks are optional at the instance of the owner. Accordingly, motor vehicle insurance
policies can be divided into two, namely, compulsory insurance policy (Act policy) and
comprehensive policy.
Compulsory insurance of motor vehicle or Act liability insurance
A motor vehicle in a public place is potentially a dangerous and lethal instrument. Even when it
is without its engine or without petrol, if it is moved down on an incline even un intentionally it
can cause considerable damage and human injury. Hence, unlike other properties which may be
insured or not at the option of the owner, a motor vehicle is required by law to be insured in
respect of the user's liability for death, bodily injury or damage to property of third party. [1] As
sometimes the driver of the vehicle is often a person of small means and injured person goes
without adequate compensation, insurance of motor vehicle covering the third party risk is made
compulsory in India and the Motor Vehicles Act provides that, vehicle should not be used in
public place without having insurance policy covering third party risks.[2] Third party risk means
risk covered for bodily injury, death and damage of property of third party. Third party means
any person except owner or passenger in the private vehicle. So pillion rider of the motor cycle,
passengers in private cars, jeeps etc. are not third party.[3] However, passengers in public vehicle
such as bus. contract carriage vehicle, taxi etc. are also third party and hence covered by third
party or statutory policy.

The occupants of private vehicles and pillion riders are not covered by the Act policy. However,
they can be covered by paying additional premium of insurance. If additional premium is not
paid to cover the risk of occupants of private vehicle and pillion rider, insurance company will
not be liable to compensate such victims. However, Hon'ble Supreme court held that if the policy
is package/comprehensive policy, then the occupants of private vehicles and pillion rider are
covered, even if the additional premium of coverage of such person is not paid.[4]

THE MOTOR VEHICLES ACT, 1988

The motor vehicles Act, 1939 ( 4 of 1939), consolidates and amends the law relating to motor
vehicles. This has been amended several times to keep it up to date. The need was, however, felt
that this Act should, now inter alia, take into account also changes in the road transport
technology, pattern of passenger and freight movements, developments, of the road network in
the country and particularly the improved techniques in the motor vehicles management.
Various Committees, like, National Transport Policy Committee, National Police Commission,
Road Safety Committee, Low Powered Two Wheelers Committee, as also the Law
Commission have gone into different aspects of road transport. They have recommended
updating, simplification and rationalization of this law. Several Members of Parliament have also
urged for comprehensive review of the Motor Vehicles Act, 1939, to make it relevant to the
modern day requirements.
A Working Group was, therefore, constituted in January, 1984 to review all the provisions of the
Motor Vehicles Act, 1939 and to submit draft proposals for a comprehensive legislation to
replace the existing Act. This Working Group took into account the suggestions and
recommendations earlier made by various bodies and institutions like Central Institute of Road
Transport (CIRT), Automotive Research Association of India (ARAI), and other transport
organisations including, the manufacturers and the general public, Besides, obtaining comments

of State Governments on the recommendations of the Working Group, these were discussed in a
specially convened meeting of Transport Ministers of all States and Union territories.

The Supreme Court in M. K. Kunhimohammed v. P. A. Ahmedkutty (1987) 4 S.C.C. 284, has

made certain suggestions to raise the limit of compensation payable as a result of motor
accidents in respect of death and permanent disablement in the event of there being no proof of
fault on the part of the person involved in the accident and also in hit and run motor accidents
and to remove certain disparities in the liability of the insurer to pay compensation depending
upon the class or type of vehicles involved in the accident. The above suggestions made by the
Supreme Court have been incorporated in the Bill.
The Motor Vehicles Act, 1988 (59 of 1988) consolidated and rationalised various laws regulating
road transport. The Act came into force with effect from 1st July, 1989 replacing the Motor
Vehicles Act, 1939.
The Motor Vehicles Act, 1988 (59 of 1988) is a Central legislation through which the road
transport is regulated in the country. By the Motor Vehicles (Amendment ) Act, 1994, inter alia,
amendments were made for make special provisions under sections 66 & 67 so as to provide that
vehicles operating on ecofriendly fuels shall be exempted from the requirements of permits and
also the owners of such vehicles shall have the discretion to fix fares and freights for carriage of
passengers and goods. The intention in bringing the said amendments was to encourage the
operation of vehicles with such eco-friendly fuels.
contract carriage means a motor vehicle which carries a passenger or passengers for hire or
reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle
as a whole for the carriage of passengers mentioned therein and entered into by a person with a
holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a
fixed or an agreed rate or sum

Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be
the basis of this contract and is deemed to be incorporated herein has applied to the L&T General
Insurance Company Ltd. for the insurance hereinafter contained and has paid the premium
mentioned in the schedule as consideration for such insurance in respect of accidental loss or
damage occurring during the period of insurance.

Section I. Loss Of or Damage to the Vehicle Insured

The Company will indemnify the insured against loss or damage to the vehicle insured hereunder
and / or its accessories whist thereon
by fire explosion self ignition or lightning;
by burglary housebreaking or theft;
by riot and strike;
by earthquake (fire and shock damage);
by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;
by accidental external means;
by malicious act;
by terrorist activity;
whilst in transit by road rail inland-waterway lift elevator or air;
by landslide rockslide.
Subject to a deduction for depreciation at the rates mentioned below in respect of parts replaced;
For all rubber / nylon / plastic parts, tires and tubes, batteries and air bags - 50%
For fiber glass components

- 30%

For all parts made of glass

- Nil

Rate of depreciation for all other parts including wooden parts will be as per the following
schedule:

Age Of The Vehicle

Not exceeding 6 months
Exceeding 6 months but not exceeding 1 year
Exceeding 1 year but not exceeding 2 years
Exceeding 2 years but not exceeding 3 years
Exceeding 3 years but not exceeding 4 years
Exceeding 4 years but not exceeding 5 years

% Of Depreciation For Fixing

IDV Of The Vehicle
5%
15%
20%
30%
40%
50%

The Company shall not be liable to make any payment in respect of:a) consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or
breakages or for damage caused by overloading or strain of the insured vehicle nor for loss of or
damage to accessories by burglary, housebreaking or theft unless the insured vehicle is stolen at
the same time.
b)

damage to tires and tubes unless the vehicle is damaged at the same time in which case

the liability of the Company shall be limited to 50% of the cost of replacement.
c)

any accidental loss or damage suffered whilst the insured or any person driving the

vehicle with the knowledge and consent of the insured is under the influence of intoxicating
liquor or drugs.
In the event of the vehicle being disabled by reason of loss or damaged covered under this policy
the Company will bear the reasonable cost of protection and removal to the nearest repairer and
redelivery to the insured but not exceeding in all Rs. 750 for three wheeled vehicles, Rs. 1,500/for taxis and Rs. 2,500/- for other commercial vehicles in respect of any one accident.
The insured may authorize the repair of the vehicle necessitated by loss or damage for which the
Company may be liable under this policy provided that:

the estimated cost of such repair including replacements, if any, does not exceed Rs. 500/the Company is furnished forthwith with a detailed estimate of the cost of repairs
the insured shall give the Company every assistance to see that such repair is necessary and the
charges are reasonable.

Sum Insured Insureds Declared Value (IDV)

The Insureds Declared Value (IDV) of the vehicle will be deemed to be the SUM INSURED
for the purpose of this policy which is fixed at the commencement of each policy period for the
insured vehicle.
The IDV of the vehicle (and accessories if any fitted to the vehicle) is to be fixed on the basis of
the manufacturers listed selling price of the brand and model as the vehicle insured at the
commencement of insurance/renewal and adjusted for depreciation (as per schedule below).
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total
Loss / Constructive Total Loss (TL/CTL) claims only.

The Schedule of Depreciation for fixing IDV of the Vehicle:

% Of Depreciation For
Age Of The Vehicle

Fixing IDV Of The Vehicle

Not exceeding 6 months

Exceeding 6 months but not exceeding 1 year
Exceeding 1 year but not exceeding 2 years
Exceeding 2 years but not exceeding 3 years
Exceeding 3 years but not exceeding 4 years
Exceeding 4 years but not exceeding 5 years

5%
15%
20%
30%
40%
50%

IDV of the vehicle beyond 5 years of age and of obsolete models of the vehicles (i.e. models
which the manufacturers have discontinued to manufacture) is to be determined on the basis of
an understanding between the insurer and the insured.
IDV shall be treated as the Market Value throughout the policy period without any further
depreciation for the purpose of Total Loss / Constructive Total Loss (TL/CTL) claims.
The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair of
the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.

Section II Liability to Third Parties

Subject to the limits of liability as laid down in the schedule hereto the Company will indemnify
the insured in the event of an accident caused by or arising out of the use of the vehicle against
all sums including claimants costs and expenses which the insured shall become legally liable to
pay in respect of:death of or bodily injury to any person caused by or arising out of the use (including the loading
and /or unloading) of the vehicle
damage to property caused by or arising out of the use (including the loading and /or unloading)
of the vehicle.
Provided Always That:The Company shall not be liable in respect of death, injury or damage caused or arising beyond
the limits of any carriageway or thoroughfare in connection with the bringing of the load to the
insured vehicle for loading thereon or the taking away of the load from the vehicle after
unloading there from.
Except so far as is necessary to meet the requirements of the Motor Vehicles Act, the Company
shall not be liable in respect of death or bodily injury to any person in the employment of the
insured arising out of and in the course of employment.
Except so far as is necessary to meet the requirements of the Motor Vehicles Act in relation the
liability under the Workmens Compensation Act 1923 the Company shall not be liable in respect
of death or bodily injury to any person (other than a passenger carried by reason of or in
pursuance of a contract of employment) being carried in or upon entering or mounting or
alighting from the insured vehicle at the time of occurrence of the event out of which any claim
arises.
The Company shall not be liable in respect of damage to property belonging to or held in trust by
or in the custody of the insured or a member of the insureds household or being conveyed by the
insured vehicle.

The Company shall not be liable in respect of damage to any bridge and/or viaduct and/or to any
road and/or anything beneath by vibration or by the weight of the insured vehicle and/or load
carried by the insured vehicle.
Except so far as is necessary to meet the requirements of the Motor Vehicles Act the Company
shall not be liable in respect of death and/or bodily injury to any person(s) who is/are not
employee(s) of the insured and not being carried for hire or reward, other than owner of the
goods or representative of the owner of goods being carried in or upon or entering or mounting
or alighting from the insured vehicle described in the Schedule of this Policy.
The Company will pay all costs and expenses incurred with its written consent.
In terms of and subject to the limitations of the indemnity granted by this section to the insured,
the Company will indemnify any driver who is driving the vehicle on the insureds order or with
insured/s permission provided that such driver shall as though he/she was the insured observe
fulfill and be subject to the terms exceptions and conditions of this policy in so far as they apply.
In the event of the death of any person entitled to indemnity under this policy the Company will
in respect of the liability incurred by such person indemnify his / her personal representative in
terms of and subject to the limitations of this policy provided that such personal representative
shall as though such representative was the insured observe fulfill and be subject to the terms
exceptions and conditions this policy in so far as they apply.
The Company may at its own option
arrange for representation at any Inquest or Fatal Inquiry in respect of any death which may be
the subject of indemnity under this policy and
undertake the defense of proceedings in any Court of Law in respect of any act or alleged offence
causing or relating to any event which may be the subject of indemnity under this policy.

Section III Towing Disabled Vehicles

This policy shall be operative whilst the insured vehicle is being used for the purpose of towing
any one disabled mechanically propelled vehicle and the indemnity provided by Section II of this
policy shall subject to its terms and limitations be extended to apply in respect of liability in
connection with such towed vehicle;
Provided Always That
such towed vehicles is not towed for reward
the Company shall not be liable by reason of this section of this policy in respect of damage to
such towed vehicle or property being conveyed thereby.

Section IV Personal Accident Cover for Owner Driver

Subject otherwise to the terms exceptions conditions and limitations of this policy, the Company
undertakes to pay compensation as per the following scale for bodily injury/death sustained by
the owner-driver of the vehicle, in direct connection with the vehicle insured or whilst driving or
mounting into/dismounting from the vehicle insured or whilst traveling in it as a co-driver,
caused by violent accidental external and visible means which independent of any other cause
shall within six calendar months of such injury results in:

Nature of Injury
Scale of Compensation
i) Death
100%
ii) Loss of two limbs or sight of two eyes or one limb and 100%
sight of one eye
iii) Loss of one limb or sight of one eye
50%
iv) Permanent total disablement from injuries other than 100%
named above
Provided always that
Compensation shall be payable under only one of the items (i) to (iv) above in respect of the
owner-driver arising out of any one occurrence and the total liability of the insurer shall not in
the aggregate exceed the sum of Rs. 1 Lakh during any one period of insurance.
No compensation shall be payable in respect of death or bodily injury directly or indirectly
wholly or in part arising or resulting from or traceable to (1) intentional self injury suicide or
attempted suicide physical defect or infirmity or (2) an accident happening whilst such person is
under the influence of intoxicating liquor or drugs.
Such compensation shall be payable directly to the insured or to his/her legal representatives
whose receipt shall be the full discharge in respect of the injury to the insured.

This cover is subject to

the owner-driver is the registered owner of the vehicle insured therein

the owner-driver is the insured named in the policy
the owner-driver holds an effective driving license, in accordance with the provisions of Rule 3
of the Central Motor Vehicle Rules 1989, at the time of accident.
Avoidance of Certain Terms and Rights of Recovery
Nothing in this Policy or any endorsement hereon shall affect the right of any person indemnified
by this Policy or any other person to recover an amount under or by virtue of the provisions of
the Motor Vehicle Act 1988.
But the insured shall repay to the Company all sums paid by the Company which the Company
would not have been liable to pay but for the said provision.

General Exceptions (Applicable to all sections of the Policy)

The Company shall not be liable under this policy in respect of
1. Any accidental loss or damage and/or liability caused sustained or incurred outside the
geographical area;
2.

Any claim arising out of any contractual liability;

3.

Any accidental loss damage and/or liability caused sustained or incurred whilst the

vehicle insured herein is

(a) being used otherwise than in accordance with the Limitations as to use
or
(b) being driven by or is for the purpose of being driven by him/her in the charge of any person
other than a driver as stated in the Drivers Clause.

(i) Any accidental loss or damage to any property whatsoever or any loss or expense whatsoever
resulting or arising there from or any consequential loss.
(ii) Any liability of whatsoever nature directly or indirectly caused by or contributed to by or
arising from ionizing radiations or contamination by radioactivity from any nuclear fuel or from
any nuclear waste from the combustion of nuclear fuel. For the purpose of this exception
combustion shall include any self-sustaining process of nuclear fission.
5. Any accidental loss or damage or liability directly or indirectly caused by or contributed to by
or arising from nuclear weapons material.
6. Any accidental loss damage and/or liability directly or indirectly or proximately or remotely
occasioned by contributed to by or traceable to or arising out of or in connection with war,
invasion, the act of foreign enemies, hostilities or warlike operations (whether before or after
declaration of war) civil war, mutiny rebellion, military or usurped power or by any direct or
indirect consequence of any of the said occurrences and in the event of any claim hereunder the
insured shall prove that the accidental loss or damage and/or liability arose independently of and
was in no way connected with or occasioned by or contributed to by or traceable to any of the
said occurrences or any consequences thereof and in default of such proof, the Company shall
not be liable to make any payment in respect of such a claim.

Deductible The Company shall not be liable for each and every claim under Section -1 (loss or damage to
the vehicle insured) of this policy in respect of the deductible stated in the schedule.

Conditions -

The Policy and the Schedule shall be read together and any word or expression to which a
specific meaning has been attached in any part of this policy or of the Schedule shall bear the
same meaning wherever it may appear.
1.

Notice shall be given in writing to the Company immediately upon the occurrence of any

accidental loss or damage in the event of any claim and thereafter the insured shall give all such
information and assistance as the Company shall require. Every letter claim writ summons and
/or process or copy thereof shall be forwarded to the Company immediately on receipt by the
insured. Notice shall also be given in writing to the Company immediately the insured shall have
knowledge of any impending prosecution, inquest or fatal injury in respect of any occurrence
which may give rise to a claim under this policy. In case of theft or criminal act which may be
the subject of a claim under the Policy, the insured shall give immediate notice to the police and
co-operate with the Company in securing the conviction of the offender.
2.

No admission, offer, promise, payment or indemnity shall be made or given by or on

behalf of the insured without the written consent of the Company which shall be entitled if it so
desires to take over and conduct in the name of the insured the defense or settlement of any claim
or to prosecute in the name of the insured for its own benefit any claim for indemnity or
otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of
any claim and the insured shall give all such information and assistance as the Company may
require.
3.

At any time after the happening of the event giving rise to a claim under Section II of this

policy the Company may pay to the insured the full amount of the Companys liability under the
section and relinquish the conduct of any defense settlement or proceedings and the Company
shall not be responsible for any damage alleged to have been caused to the insured in
consequence of any alleged action or/omission of the Company in connection with such defense
settlement or proceedings or of the Company relinquishing such conduct; nor shall the Company
be liable for any costs or expenses whatsoever incurred by the insured or any claimant or other
person after the Company shall have relinquished such conduct.
4.

The Company may at its own option repair, reinstate or replace the vehicle or part thereof

and/or its accessories or may pay in cash the amount of the loss or damage and the liability of the
Company shall not exceed:

for total loss / constructive total loss of the vehicle the Insureds Declared Value (IDV) of the
vehicle (including accessories thereon) as specified in the schedule less the value of the wreck.
for partial losses, i.e. losses other than Total Loss/Constructive Total Loss of the vehicle actual
and reasonable costs of repair and /or replacement of parts lost/damaged subject to depreciation
as per limits specified.
5.

The insured shall take all reasonable steps to safeguard the vehicle from loss or damage

and to maintain it in efficient condition and the Company shall have at all times free and full
access to examine the vehicle or any part thereof or any driver or employee of the insured. In the
event of any accident or breakdown, the vehicle shall not be left unattended without proper
precautions being taken to prevent further damage or loss and if the vehicle be driven before the
necessary repairs are effected any extension of the damage or any further damage to the vehicle
shall be entirely at the insureds own risk.
6.

The Company may cancel the policy by sending seven days notice by recorded delivery

to the insured at insureds last known address and in such event will return to the insured the
premium paid less the pro rata portion thereof for the period the policy has been in force or the
policy may be cancelled at any time by the insured on seven days notice by recorded delivery
and provided no claim has arisen during the currency of the policy, the insured shall be entitled
to a return of premium less premium at the Companys short period rates for the period the
policy has been in force. Return of the premium by the Company will be subject to retention of
the minimum premium of Rs.100/- (or Rs, 25/- in respect of vehicles specifically designed /
modified for use by blind/handicapped/mentally challenged persons). Where the ownership of
the vehicle is transferred, the policy cannot be cancelled unless evidence that the vehicle is
insured else where is produced.
7.

If any dispute or difference shall arise as to the quantum to be paid under this policy

(liability being otherwise admitted), such difference shall independent of all other questions be
referred to the decision of a sole arbitrator to be appointed in writing by the parties to the dispute
or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration,
the same shall be referred to a panel of three arbitrators comprising two arbitrators one to be
appointed by each of the parties to the dispute/ difference, and a third arbitrator to be appointed
by such two arbitrators who shall act as the presiding arbitrator and Arbitration shall be

conducted under and in accordance with the provisions of the Arbitration and Conciliation Act
1996.
It is clearly agreed and understood that no difference or dispute shall be referable to Arbitration
as hereinbefore provided, if the Company has disputed or not accepted liability under or in
respect of this policy.
It is hereby expressly stipulated and declared that it shall be condition precedent to any right of
action or suit upon this policy that the award by such arbitrator/arbitrators of the amount of the
loss or damage shall be first obtained.
It is also hereby further expressly agreed and declared that if the Company shall disclaim liability
to the insured for any claim hereunder and such claim shall not within twelve calendar months
from the date of such disclaimer have been made the subject matter of a suit in a court of law,
then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter
be recoverable hereunder.
8.

The due observance and fulfillment of the terms, conditions and endorsements of this

policy in so far as they relate to anything to be done or complied with by the insured and the
truth of the statements and answers in the said proposal shall be conditions precedent to any
liability of the Company to make any payment under this policy.
9.

If at any time of occurrence of an event that gives rise to any claim under the policy there

is in existence any other insurance covering the same liability, the Company shall not be liable to
pay or contribute more than its rateable proportion of any compensation, cost or expenses.
10.

In the event of the death of the sole insured, this policy will not immediately lapse but

will remain valid for a period of three months from the date of the death of the insured or until
the expiry of this policy (whichever is earlier). During the said period, legal heir(s) of the insured
to whom the custody and use of the Motor vehicle passes may apply to have this policy
transferred to the name(s) of the heir(s) or obtain a new insurance policy for the Motor vehicle.
When such legal heir(s) desire(s) to apply for transfer of this policy or obtain a new policy for
the vehicle such heir(s) should make an application to the Company accordingly within the
aforesaid period. All such applications should be accompanied by:Death certificate in respect of the insured
Proof of title to the vehicle

Original Policy

No Claim Bonus
The insured is entitled for No Claim Bonus (NCB) on the own damage section of the policy, if
no claim is made or pending during the preceding year(s), as per the following table.
Period Of Insurance

Of

NCB

On

OD

Premium
No claim made or pending during the preceding full year of 20%
insurance
No claim made or pending during the preceding 2 25%
consecutive years of insurance
No claim made or pending during the preceding 3 35%
consecutive years of insurance
No claim made or pending during the preceding 4 45%
consecutive years of insurance
No claim made or pending during the preceding 5 50%
consecutive years of insurance
No claim bonus will only be allowed provided the policy is renewed within 90 days of the expiry
date of the previous policy.

Rules Applicable to Tankers carrying Hazardous Chemicals

Rule 129 A Spark arrester

Six months from the date of commencement of Central Motor Vehicles (Amendment) Rules
1993, every goods carriage carrying goods of dangerous or hazardous nature to human life, shall
be fitted with a spark arrester.
Rule 131 Responsibility of the consignor for safe transport of dangerous or hazardous
goods.
It shall be responsibility of the consignor intending to transport any dangerous or hazardous
goods listed in Table II, to ensure the following, namely
the goods carriage has a valid registration to carry the said goods;
the vehicle is equipped with necessary first-aid, safety equipment and antidotes as may be
necessary to contain any accident;
that transporter or the owner of the goods carriage has full and adequate information about the
dangerous or hazardous goods being transported;
that the driver of the goods carriage is trained in handling the dangers posed during transport of
such goods.
Every consignor shall supply to the owner of the goods carriage, full and adequate information
about the dangerous or hazardous goods being transported as to enable owner and its driver to
comply with the requirements of rules 129 to 137 (both inclusive) of these rules and
be aware of the risks created by such goods to health or safety or any person.
It shall be the duty of the consignor to ensure that the information is accurate and sufficient for
the purpose of complying with the provisions of rules 129 to 137 (both inclusive) of these rules.

Rule 132 Responsibility of the transporter or owner of goods carriage

It shall be the responsibility of the owner of the goods carriage transporting any dangerous or
hazardous goods to ensure the following, namely -

that the goods carriage has a valid registration to carry the said goods and the said carriage is safe
for the transport of the said goods and
the vehicle is equipped with necessary first-aid, safety equipment, tool box and antidotes as may
be necessary to contain any accident.
(2)

Every owner of a goods carriage shall, before undertaking the transportation of dangerous

or hazardous goods in his goods carriage, satisfy himself that the information given by the
consignor is full and accurate in all respects and correspond to the classification of such goods
specified in rule 137.
(3)

The owner of goods carriage shall ensure that the driver of such carriage is given all the

relevant information in writing as given in goods entrusted to him for transport and satisfy
himself that such driver has sufficient understanding of the nature of such goods and is capable
of taking appropriate action in case of an emergency.
(4)

The owner of the goods carrying dangerous or hazardous goods and the consignor of such

goods shall lay down the route for each trip which the driver shall be bound to take unless
directed or permitted otherwise by the police authorities. They shall also fix a time table for each
trip to the destination and back with reference to the route so laid down.
(5)

It shall be the duty of the owner to ensure that the driver of the goods carriage carrying

dangerous or hazardous goods holds a driving license as per provisions of rule 9 of these rules.

Rule 133 Responsibility of the driver

(1) The driver of a goods carriage transporting dangerous or hazardous goods shall ensure that
the information given to him in writing under sub-rule (3) of rule 132 is kept in the drivers cabin

and is available at all times while the dangerous or hazardous goods to which it relates, are being
transported.
(2) Every driver of a goods carriage transporting any dangerous or hazardous goods shall observe
at all times all the directions necessary for preventing fire, explosion or escape of dangerous or
hazardous goods carried by him while the goods carriage is in motion and when it is not being
driven he shall ensure that the goods carriage is parked in a place which is safe from fire,
explosion and any other risk, and at all times the vehicle remains under the control and
supervision of the driver or some other competent person above the age of 18 years.
Sub-rule (1) of rule 9 of the principal rules:
(1) Any person driving a goods carriage carrying goods of dangerous or hazardous nature to
human life shall, in addition to being the holder of a driving license to drive a transport vehicle
also have the ability to read and write at least one Indian language out of those specified in the
VII Schedule of the Constitution and English and also possess a certificate of having successfully
passed a course consisting of following syllabus and periodicity connected with the transport of
such goods.
Period of training - 3 days
Place of training - At any institute recognized by the State Government

MOTOR INSURANCE POLICY.

Important note:

Please examine this Policy including its attached Schedules / Annexures if any. In the event of
any discrepancy please contact the office of the Company immediately, it being noted that this
Policy shall be otherwise considered as being entirely in order.
Please refer the Claims Settlement & Grievance Redressal procedure document attached herein
for ready reference.
CLAIM SETTLEMENT
The Company will settle the claim under this policy within 30 days from the date of receipt of
necessary documents required for assessing the claim. In the event that the Company decides to
reject a claim made under this policy, the Company shall do so within a period of thirty days of
the Survey Report or the additional Survey Report, as the case may be, in accordance with the
provisions of Protection of Policyholders Interest Regulations 2002.
GRIEVANCE REDRESSAL PROCEDURE
Vide Circular No. 3/CA/GRV/YPB/10-11 dated 27th July 2010, the IRDA has defined the
guidelines for Grievance redressal by Insurance Companies and the same has been incorporated.
For any grievance the Insured/Insured Person may write to:
The Grievance Officer:
L&T General Insurance Company Limited
601-602, 6th Floor, Trade Centre, Bandra Kurla Complex, Bandra East, Mumbai 400051
Alternatively the Insured/Insured Person may also call the helpline number- <<toll free no>> or
write to The Grievance Officer at <<abc@xyz.com>> for Grievances relating to:a) Delay in settlement or against decision on any claim
b) Premium
c) Non-issue or Interpretation of Policy terms
d) or such other grievances

the Insured/Insured person may be entitled to approach the Insurance Ombudsman having office
at Ahmedabad, Bhubaneshwar, Bhopal, Chandigarh, Chennai, Guwahati, Kochi, Kolkatta,
Lucknow, Hyderabad, Mumbai and Delhi. The details of the Insurance Ombudsmen and their
jurisdiction are available on their website-www.ombudsmanindia.org/www.gbic.co.in

AUTO INSURANCE

This is the class of Insurance through which a majority of the people recognize general Insurance
and that too because it is compulsory for all motorized vehicles to have an Insurance policy
against third party liability before they can come on road.
Though this class of Insurance is the major source of premium earnings for the Insurance
companies it is also the class which is showing the biggest losses.
TYPES OF POLICIES
CAR/VAN MC/SCOOTER BUS/ TRUCK HEAVY VEHICLE Pvt. Commercial Private
Private Commercial Two Three Wheeler Wheeler
TYPES OF CLAIMS VEHICLE ACCIDENT
Theft Accident Collision With Other Vehicle Other External Object Fire etc. Own
Damage Third Party Total Loss Cash loss Repair DeathBodily injury Property damage
TYPES OF POLICIES
Private Cars/ Scooters/ Motorcycles
Rates are based upon the cubic capacity as given by manufacturers, Insureds Declared
Value (IDV), the Zone of operation and age of the vehicle. The cubic capacity of the vehicle
indicates the power of the engine. Separate rates apply for cars upto 1000 cc, fnm 1000 cc
1500 cc and ab_ve 1500 cc and scooters/motorcycles upto 150cc,150-350cc & above 350cc.
Similarly there are different rates for vehicles in the age groups upto 5 yrs.; 5 yrs. to 10 yrs. and
above 10 yrs. There are two Zones of operation, Zone A and Zone B, as follows: Zone A :
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, N.Delhi & Pune Zone B : Rest
of India. Note: The rates for Zone A are higher than those for Zone B

Commercial Vehicles

The rating depends upon the Zone of operation, passenger carrying capacity/ gross
vehicle weight, Insureds Declared Value (IDV) and age of the vehicle. There are three Zones for
commercial vehicles. 1. Zone A Chennai, New Delhi, Kolkatta and Mumbai 2. Zone B All other
state capital 3. Zone C Rest of India
Personal Accident Cover
There is provision for Compulsory Personal Accident Cover for Owner-Driver of cars and
commercial vehicles of Rs.2.0 lacs and Rs.1 lac for owner driver of scooters / motorcycles. It
covers Death, PTD and PPD only.
Extra benefits
(a) The Third Party premium includes cover for third party property damage in excess of the
required coverage of liability of Rs.6,000/- as per the M.V.Act. In case the insured wants to get
only the liability as per act covered (i.e. Rs.6,000/-) then discount in T.P. premium is allowed.
(b) Wider legal liability to persons e.g. paid drivers etc. employed in operation and / or
maintenance of the vehicle i.e. under W.C. Act and at common law.
(c) Personal Accident cover for unnamed passengers as per the registered carrying capacity of the
vehicle upto a max. of Rs.2 lac/ person on payment of extra premium.
CLAIMS
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 Claims Register and a claim form is
issued to the insured for completion and return. The insured is required to submit a detailed
estimate of repairs from any repairer of his choice. Generally, these repairs are acceptable to the
insurers but they at times ask the insured to obtain repair estimate from another repairer, if they
have reason to believe that the competence, moral hazard or business integrity of the repairer
first chosen is not satisfactory.

Assessment

Independent automobile surveyors with engineering background are assigned the task of
assessing the cause and extent of loss. They are supplied with a copy of the policy, the claim
form and the repairers estimate. They inspect the damaged vehicle, discuss the cost of repair or
replacement DIPLOMA IN INSURANCE SERVICES MODULE - 4 Notes Motor Insurance
Practice of General Insurance 52 with the repairer, negotiate as per the indemnity, and submit
their survey report. In respect of minor damage claims, independent surveyors are not always
appointed. The insurers own officials or their own automobile engineers inspect the vehicle and
submit a report.
Types of motor policies
When you buy a motor vehicle, you need to buy a motor insurance. There are, however, many types of
motor insurance policies available. The common types are:

Third party cover - This policy insures you against claims for bodily injuries or deaths caused to
other persons (known as the third party), as well as loss or damage to third party property caused
by your vehicle.

Third party, fire and theft cover - This policy provides insurance against claims for third party
bodily injury and death, third party property loss or damage, and loss or damage to your own
vehicle due to accidental fire or theft.

Comprehensive cover - This policy provides the widest coverage, i.e. third party bodily injury
and death, third party property loss or damage and loss or damage to your own vehicle due to
accidental fire, theft or an accident.

Exclusions/extensions A standard motor insurance will not cover certain losses, such as your own
death or bodily injury due to a motor accident, your liability against claims from passengers in
your vehicle (except for passengers of hired vehicles such as taxis and buses) and loss or damage
arising from an act of nature, such as flood, storm and landslide. However, you may pay
additional premiums to extend your policy to cover flood, landslide, landslip as well as cover
your passengers. It is important to check your policy for the exclusions. Important points to
consider when buying motor insurance policies Insured value/sum insured If you are buying a
policy against loss/damage to your vehicle, you must ensure that your vehicle is adequately
insured as it will affect the amount you can claim in the event of loss/damage. For a new vehicle,
the insured value will be the purchase price while for other vehicles, the insured value is the
market value of the vehicle at the point you apply for the insurance policy. Under-insurance If

you insure your vehicle at a lower sum than its market value, you will be deemed as self-insured
for the difference, i.e. in the event of loss/damage, you will only be partially compensated (up to
the proportion of insurance) by your insurance company. Over-insurance Should you insure
your vehicle at a higher sum than its market value, the maximum compensation you will receive
is the market value of the vehicle as the policy owner cannot profit from a motor insurance
claim. Duty of disclosure Duty of disclosure You should disclose fully all material facts,
including previous accidents (if any), modification to engines, etc. When in doubt as to whether a
fact is relevant or not, it is best to ask your insurance company. If you fail to disclose any
material fact, your insurance company may refuse to pay your claim or any claim made by a
third party against you. In such cases, you are personally liable for such claims. Price The price
you pay for your motor insurance will depend on the type of policy selected. The insurance
premium charged by your insurance company is the standard minimum rate in accordance with
the Motor Tariff. However, in addition to the standard minimum rate, your insurance company
may impose additional premiums known as loadings to the premium payable in view of higher
risk factors involved such as age of vehicle and claims experience. Loadings are governed by
Bank Negara Malaysia (BNM) and no insurance company may charge loadings higher than the
levels permitted by BNM. No-claim-discount The premium payable may be reduced if you have
no-claim-discount (NCD) entitlement. NCD is a reward scheme for you if no claim was made
against your policy during the preceding 12 months of policy. Different NCD rates are applicable
for different classes of vehicles. For a private car, the scale of NCD ranges from 25% to 55% as
provided in the policy. Excess Also known as a deductible. This is the amount of loss you have
to bear before your insurance company will pay for the balance of your vehicle damage claim.
The types of excess applicable are as follows: Compulsory excess of RM400 if your vehicle is
driven by a person not named in your policy or a person named in your policy who is under the
age of 21, the holder of a provisional (L) driving licence or the holder of a full driving licence of
less than two years. Other excess applicable at the discretion of your insurance company and in
some cases, no excess is imposed. You can negotiate with your insurance company on this
excess. Insurance policy With the implementation of e-cover note in 2005, insurance companies
will transit motor insurance information electronically to the Road Transport Department (RTD)
and you will receive confirmation slip containing details of your motor cover as confirmation of
the purchase of your motor insurance. Thereafter, within one month, you should receive: the

Schedule which shows your name and address, details of the vehicle, the sum insured (for
comprehensive and third party fire & theft policies), the period of insurance, the policy number,
your NCD entitlement, premium breakdown, excess and named drivers; the certificate of
insurance which shows your name, vehicle model, registration number and cubic capacity, period
of insurance, authorised drivers and limitations of use. In some cases, this may be issued at the
point of purchase in place of the cover note; and a motor policy which shows the terms and
conditions of cover provided by your insurance company. If you do not receive your policy
within one month, you should check with your insurance company What you should do in the
event of an accident/loss Take notes of the accident If you are involved in a motor accident,
take notes of the accident, i.e. the names and addresses of all drivers and passengers involved,
vehicle registration numbers, make and model of each vehicle involved, the drivers licence
numbers and insurance identification as well as the names and addresses of as many witnesses as
possible Make a police report You are required by law to lodge a police report within 24
hours of a road accident. Notify your insurance company You must notify your insurance
company in writing with full details as soon as possible. Depending on the type of claim you
intend to make, you may have to notify other insurance companies (please refer to Making a
claim against an insurance company for details). If you fail to report the accident, you will be
liable for your own loss as well as any third party claim against you. Select the workshop You
must send your damaged vehicle to a workshop approved by your insurance company. If the
accident occurs during office hours, you may call the hotline/ emergency assistance numbers
provided by your insurance company. Otherwise, you may call your insurance company for the
nearest approved workshop. Should the accident occur outside office hours and you are making a
claim against your policy, i.e. an own damage claim, you should ensure that your vehicle is
towed to a workshop approved under the Persatuan Insuran Am Malaysia Approved Repairers
Scheme [called a PIAM Approved Repairers Scheme (PARS)]. If you are making a third party
claim, it is advisable to also send your vehicle to a PARS workshop.

FINDINGS

1.

Do an annual rate check. Check rates from other companies to make sure you are getting the best deal.
Many state insurance departments offer guides to available services, and while online you can find insurance
comparison tools. Of course, personalized quotes arent immediate and often require a call back from an agent,
but comparison shopping online can be a time-efficient way to find a better deal.

2.

Pick a top-rated insurer. When we last surveyed readers/subscribers on their auto insurers, we found that all
rated companies did well, but some were better than others with dealing with claims, payments, and non-claim
problems. See our full Ratings of car insurers.

3.

Maintain good credit. Regularly check your credit score since a low score may impact your premium.

4.

Set the right deductable. A higher deductible reduces your premium, but you have to pay more out of
pocket in the event of an accident. If you have a good driving record and havent had an accident that was your
fault, you may want to gamble and opt for a higher premium. The reward for this risk could be up to a 40
percent savings.

5.

Review your coverage. Check to make sure you have enough liability coverage for bodily injury and
property damage. Over time, costs and risk increase, and so should your coverage. Simply put, minimal
coverage gives you minimal protection.

6.

Report reduced mileage. If youve changed jobs, are now working at home, or have become unemployed,
call your insurer. By driving less, you may qualify for a lower premium.

7.

Watch crash repairs. Check to see where your insurer sends you for repairs, as the repair shop may push
you to use cheaper replacement parts, rather than original equipment from the manufacturer (OEM parts). Tests
have found that some non-OEM parts can fit poorly, are more prone to rust, and dont necessarily meet federal
safety standards.

8.

Choose the right car. Vehicle damage and the cost for repair is a big part of the price of auto insurance.
When looking for a new car, compare the data on collision by vehicle model. The Insurance Institute for
Highway

Safety

(IIHS)

has

information

and

losses

by

vehicle

model

atwww.hldi.org/research/hldi/composite_intro.html. Your car dealer should also have a booklet on relative

collision insurance cost produced by the National Highway Traffic Safety Administration (NHTSA). Also,
estimated insurance fees are part of the owner cost information Consumer Reports provides online for all new
models.
9.

Beware of scams. Crooks can rip off drivers with staged accidents, which could result in an insurance claim
against you. To avoid this unpleasant scenario, follow good driving practices and if you are in a crash,
photograph the crash scene and always call police to report the incident.

10.

Take advantage of discounts. Discounts are available for drivers considered to be lower risk (older, married,
and/or long safe driving record) or those who take a driver-training course. Anti-theft and certain safety
equipment can also reduce your cost. Bundling insurance with auto and home is another option to consider, but
check out the total costs with and without combining policies to see which scenario is cheaper.

Conclusion
lated to operating the vans and other vehicles used to transport seniors to a variety of
services including Senior Centers, NORCs, adult day services, medical and recreational
services, and the delivery of hot meals, CSCS conducted a city-wide insurance survey.
The results of this survey will provide information in the following areas:
1. Vehicles and Services
a. Up-to-date count of the number, type, and age of vehicles currently in
use.
b. The type of services for which current vans are being used.
2. Persons being served
a. Profile of individuals currently being served (i.e., seniors, children,
physically handicapped, mentally handicapped, etc.)
3. Safety Measures and Drivers Qualifications
a. Total number of drivers involved, including the use of professional and
volunteer drivers.
b. Age limitations and other qualifications of drivers including training.
c. Reporting requirements, including logs kept, etc.
4. Costs of vans, funding, and alternative vehicle sources
a. Original purchasing costs of vans.
b. Major sources of funding for van.
c. Maintenance of vans
d. Storage of vehicles
e. Use of employee vehicles
f. Use of rented or leased vehicles
5. Insurance
a. Current cost of insurance for all vans.
b. Names of insurance carriers.
c. Limitations of coverage, policy period, annual premium for auto insurance
and personal liability.

Advocate for a phased in replacement plan for the transportation fleet serving
the senior network, given its age as documented in this survey,
2. Review current vehicle insurance coverage and explore the savings that can be
realized by combining automobile and physical damage insurance policy to
lower premiums significantly.
3. Recognize the potential of group purchasing and move to a group insurance
program to eliminate the disparity of costs charged by 30 different insurance
companies and to effect savings throughout the system.
4. Take steps necessary to qualify for discounts or credits provided by insurance
companies as this survey identified discounts or credits as an underutilized
tool to effect cost savings.
5. For those agencies that do not currently have a formal maintenance program,
it is recommended to start one, as it can prove to be cost effective, especially
for older vehicles. Keeping the vehicle in working order may be an
investment in prolonging the use of the vehicle by the agency.