Professional Documents
Culture Documents
Final Project PDF
Final Project PDF
A PROJECT SUBMITTED TO
SUBMITTED BY
A PROJECT SUBMITTED TO
SUBMITTED BY
I the undersigned Miss Neha Ravindra Srivastav hereby, declare that the work
embroidered in this project work titled “Study of Automobile Insurance in India
forms my own contribution to the research work carried out under the guidance of
Prof. Seema Attarde is a result of my own research work and has not been
previously submitted to any other University for any Degree / Diploma to this or any
other University.
Wherever references has been made to previous work of others, it has been clearly
indicated in the bibliography.
I, here buy further declare that all the information of this document have been
obtained and presented in accordance with the academic rule and ethical conduct.
Certified by
To list who all have helped me is difficult because they are so numerous and the death
is so enormous.
I would like to acknowledge the following is being idle stick channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I would like to thank my principal Mrs Sonali Pendekar for providing the necessary
facilities required for completion of this project.
I take this opportunity to thank our Coordinator Professor Shilpa Thakur for her
moral support and guidance.
I would like to thank my college library. For having provided various reference
books and magazine related to my project.
Lastly, I like to thank each and every person who directly and indirectly help me in
the completion of the project especially my parents and peers who supported me
throughout my project.
INDEX
INTRODUCTION
INSURANCE:
Insurance policies are used to hedge against the risk of financial losses, both
big and small, that may result from damage to the insured or her property, or from
liability for damage or injury caused to a third party
There are also insurance policies available for very specific needs, such as
kidnap and ransom (K&R), medical malpractice, and professional liability insurance,
also known as errors and omissions insurance.
Any risk that can be quantified can potentially be insured. Specific kinds of
risk that may give rise to claims are known as perils. An insurance policy will set out
in detail which perils are covered by the policy and which are not. Below are non-
1
exhaustive lists of the many different types of insurance that exist. A single policy that
may cover risks in one or more of the categories set out below. For example, vehicle
insurance would typically cover both the property risk (theft or damage to the vehicle)
and the liability risk (legal claims arising from an accident). A home insurance policy
in the United States typically includes coverage for damage to the home and the
owner's belongings, certain legal claims against the owner, and even a small amount
of coverage for medical expenses of guests who are injured on the owner's property.
Business insurance can take a number of different forms, such as the various kinds of
professional liability insurance, also called professional indemnity (PI), which are
discussed below under that name; and the business owner's policy (BOP), which
packages into one policy many of the kinds of coverage that a business owner needs,
in a way analogous to how homeowners' insurance packages the coverages that a
homeowner needs
TYPES OF INSURANCE:-
1. Automobile Insurance:
Auto insurance protects the policyholder against financial loss in the event
of an incident involving a vehicle they own, such as in a traffic collision.
Coverage typically includes:
• Property coverage, for damage to or theft of the car
• Liability coverage, for the legal responsibility to others for bodily injury or
property damage
• Medical coverage, for the cost of treating injuries, rehabilitation and
sometimes lost wages and funeral expenses.
2. Gap Insurance:
Gap insurance covers the excess amount on your auto loan in an instance
where your insurance company does not cover the entire loan. Depending on the
company's specific policies it might or might not cover the deductible as well.
This coverage is marketed for those who put low down payments, have high
interest rates on their loans, and those with 60-month or longer terms. Gap
insurance is typically offered by a finance company when the vehicle owner
purchases their vehicle, but many auto insurance companies offer this coverage to
2
consumers as well.
3. Health Insurance:
Health insurance policies cover the cost of medical treatments. Dental
insurance, like medical insurance, protects policyholders for dental costs. In most
developed countries, all citizens receive some health coverage from their
governments, paid through taxation. In most countries, health insurance is often
part of an employer's benefits.
4. Casualty Insurance :
Casualty insurance insures against accidents, not necessarily tied to
any specific property. It is a broad spectrum of insurance that a number of
other types of insurance could be classified, such as auto, workers
compensation, and some liability insurances.
5. Life Insurance :
Life insurance provides a monetary benefit to a decedent's family or other
3
designated beneficiary, and may specifically provide for income to an insured
person's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a
lump sum cash payment or an annuity. In most states, a person cannot purchase a
policy on another person without their knowledge.
These are the different types of Insurance in India. And the insurance that is
going to be formulated further is Automobile Insurance in India.
AUTOMOBILE :
MEANING :
4
AUTOMOBILE INSURANCE IN INDIA
DEFINITION:
DESCRIPTION:
This insurance helps mitigate monetary harms due to accidents causing damage
to the vehicles. The premium amounts that are payable by the person securing
insurance for his vehicle depends on various factors like insured declared value, type
of vehicle, age of vehicle, fuel type, age of the insured, etc.
Motor Vehicle insurance (also known as, car insurance, or motor insurance) is
insurance purchased for cars, trucks, motorcycles, and other road vehicles. A motor
insurance policy is generally a combined insurance which insures the damage to the
motor vehicle and its accessories, liability for damage to property, death of, or injury
to the assured himself or spouse and it also insures the motor vehicle against the risk of
liability for injury to, or the death of third parties caused by the drivers negligence. In
some jurisdictions coverage for injuries to persons riding in the insured vehicle is
available without regard to fault in the auto accident (No Fault Auto Insurance).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.
Vehicle insurance (also known as car insurance, Motor vehicle insurance law
in India is governed by the Motor Vehicles Act, Insurance Act and aspects of insurance
contracts governed by the Indian Contract Act, Transfer of Property Act and a 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,
5
compulsory insurance policy (Act policy) and comprehensive policy. insurance, or
auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its
primary use is to provide financial protection against physical damage or bodily injury
resulting from traffic collisions and against liability that could also arise from incidents
in a vehicle. Vehicle insurance may additionally offer financial protection against theft
of the vehicle, and against damage to the vehicles sustained from events other than
traffic collisions, such as keying, weather or natural disasters, and damage sustained by
colliding with stationary objects. The specific terms of vehicle insurance vary with
legal regulations in each region.
HISTORY
Widespread use of the motor car began after the First World War in urban
areas. Cars were relatively fast and dangerous by that stage, yet there was still no
compulsory form of car insurance anywhere in the world. This meant that injured
victims would seldom get any compensation in an accident, and drivers often faced
considerable costs for damage to their car and property.
6
associated with the policy, and the insurers capitalized on this window. Innovative
offers and alluring discounts encouraged vehicle owners to look at motor insurance in
a holistic manner.
Recent developments opened the gates wide, by allowing 49% foreign direct
investment (FDI). The investment increased capital inflow, leveled the playing field
and fostered better market penetration. Insurers now concentrate on offering
innovative products, providing better administrative services and ensuring hassle-free
claims.
7
Certificate of Insurance :
• The Motor Vehicles Act, 1988 provides that the motor insurance policy shall be of
no effect
• unless and until a certificate of insurance in the form prescribed under the Rules of
the Act,
• is issued. The Certificate of Insurance is considered as the only evidence of a valid
insurance
• as required by the Motor Vehicles Act, 1988 and acceptable to the Road Transport
Authority RTA .
Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with
getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay
annual premiums to an auto insurance company; the company then pays all or most of the
costs associated with an auto accident or other vehicle damage.
Policy terms are usually six- or 12-month timeframes and are renewable. An insurer will
notify a customer when it’s time to renew the policy and pay another premium. Auto
insurance requirements vary from state to state. If someone is financing a car, the lender may
stipulate requirements. Nearly every state requires car owners to carry:
8
1. Bodily injury liability – covers costs associated with injuries or death that you or
another driver causes while driving your car.
2. Property damage liability – reimburses others for damage that you or another
driver operating your car causes to another vehicle or other property.
As per the Motor Vehicles Act, 1988, it is mandatory for every owner of a
vehicle plying on public roads, to take an insurance policy, to cover the amount, which
the owner becomes legally liable to pay as damages to third parties as a result of
accidental death, bodily injury or damage to property. A Certificate of Insurance must
be carried in the vehicle as a proof of such insurance.
Motor Insurance covers all types of vehicles plying on public roads such as:
Scooters and motorcycles, Private cars, All types of commercial vehicles: Goods
carrying and passenger carrying, Miscellaneous type of vehicles e.g. cranes, Motor
Trade (Vehicles in Showrooms and gareges.
9
regulations. Manufacturer's listed selling price willinclude local duties / taxes
excluding registration and insurance. The IDV of the accessories fitted to the
vehicle but not included in the manufacturer’s listed selling price of the vehicle
is also likewise to be fixed.
5. Cover Notes
10
7. Documents to be kept in the vehicle while plying in public places
The following documents are to be kept in the vehicle while plying in
public places: Certificate of Insurance, Xerox copy of Registration Certificate,
Pollution Under Control Certificate, Photocopy of Driving Licence of person
who is driving the vehicle.
8. Double Insurance
When two policies are in existence on the same vehicle with identical
cover, one of the policies may be cancelled. Where one of the policies
commences at a date later than the other policy, the policy commencing later is
to be cancelled by the insurer concerned.
9. No claim bonus
No claim bonus recognizes the factor of moral hazard in the insured. It
rewards the insured for not lodging claims either by adopting better driving skills
as in motor insurance. An insured becomes entitled to NCB only at the renewal
of a policy after the expiry of the full duration of 12 months.NCB is given to the
insured and not to the insured vehicle. As per current norms in India, it ranges
from 20% on the Own Damage premium (and not on Liability premium) and
progressively increases to a maximum of 50%.
11
Deductibles
A deductible is the amount of money that you are required to pay out of
pocket before your expenses are paid on a claim for e.g. if the deductible is 10% and
you file a claim of 9000 rupees, you have to pay 900 rupees. Hence one has to choose
the policy carefully depending on the deductible amount.
• Do’s: Buy motor insurance policy after proper comparison through a genuine
licensed agent or broker and not through anyone. Ask for an identity card or
license of the agent/broker, Check if the company selling the policy is registered
with IRDA, Fill the proposal form yourself even if the vehicle dealer is arranging
for the insurance in order to avoid misrepresentation of information, Fill the
proposal form carefully and factually and thoroughly, Keep a copy of the
completed proposal for your records, Read the policy brochure/ prospectus
carefully to know what is covered and what is not, Ask for information about add-
on covers that may be available and choose what suits you, Give documents such
as RC Book, Permit and Driving License to the insurance company for
verification, Ensure that you keep these documents updated from the authorities
concerned, You can also buy policies from the company
• Directly Don’ts :Don’t let anyone else fill your proposal form, Don’t leave any
column blank, Don’t forget to renew your policy without any break, Don’t forget
to ask for the correct procedure when you buy a used car that already has
insurance, Don’t make false declarations aboutthe actual use of the vehicle you are
insuring.
Objectives:
12
Advantage of Automobile Insurance:
Comprehensive car insurance protects your car from any man made or natural
calamities like terrorist attacks, theft, riots, earth quake, cyclone, hurricane etc in
addition to third party’s claims/damages. At times car insurance can be confusing and
difficult to understand. There are certain guidelines that should be followed by the Car
Insurance buyers while choosing the policy. Car insurance acts like a great friend at
the time of crisis. It covers the losses made in an accident and thus saves you from
paying out the huge sum from your pocket.
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:
Below are the financial advantages of having a car insurance policy online
• Legal Requirement
Car owner needs a liability assurance for their new owned car, having a
right insurance policy protects you from legal clause.
14
Disadvantage of Automobile Insurance:
• People instinctively buy the car insurance policy assuming insurance protects your
vehicle. But there are disadvantages of car insurance policy when you opt for the
best car insurance policy online. Insurance representatives hide the specific
clauses, this, in turn, reflects you at the time of claim settlement.
• Primary and the major disadvantage of car insurance is your policy not covers the
entire vehicle. Only the specific parts of the car are under damage coverage,
policyholder needs to verify hidden clauses in the document keenly before buying
the policy.
• Most of the insurance companies take a time frame to settle the claim amount, this
is the problem most of the policyholders are facing.
• Motor insurance plan is mandatory to protect your vehicle from financial burden in
case of any damages. Be careful in choosing the auto insurance which maximizes
the benefits in terms of optimum claim settlement. Check for the ratio of fair claim
settlement for every insurance company and get the best insurance policy.
15
Motor Insurance Policies
Motor insurance is one of the primary financial protection tools that you
should have in your possession. With the ever-increasing incidence of accidents in the
country and the strict regulations laid out by the government, it is inevitable that you
buy adequate insurance protection for your vehicle.
There are various types of motor insurance policies available in the country.
You should ideally assess your insurance requirements and decide on a policy that
safeguards you in the most optimum way.
16
Comprehensive motor insurance –
Often referred to as a package policy by some insurers, this plan provides
more exhaustive insurance protection, as it encompasses third-party liability coverage
and own-damage cover. The detailed coverage of the comprehensive motor insurance
plan is as described below:
1. Own-damage cover - This includes protection for the insured vehicle from the
following events:
• Accidental damages
• Damages while in transit via rail, road, waterways, lift, etc.
• Damages caused by natural calamities, such as earthquakes, floods,
hurricanes, etc.
• Damages from man-made disasters such as strikes, riots, vandalism, etc.
17
Motor insurance add-on plans –
Apart from the comprehensive and third-party liability insurance plans
detailed above, most motor insurance companies also offer add-on covers that can
enhance the coverage of the base policy. These riders should be purchased from the
same insurance provider by paying an additional amount. Some of these add-on plans
are as described below:
1. Zero depreciation cover - This is a popular motor insurance add-on plan that
offers significant savings at the time of a claim. It is also referred to as nil
depreciation cover or bumper to bumper policy. Consider that your vehicle is
insured with a comprehensive motor insurance policy. At the time of a claim, you
will still have to bear the expenses pertaining to depreciation of the vehicle parts
and excesses. However, if your comprehensive motor insurance plan was
reinforced with a nil depreciation cover, the insurer would bear the expenses for
the depreciation of vehicle parts.
2. Engine protect cover –A comprehensive motor insurance plan does not protect
the vehicle from mechanical or electrical damages to the engine. Buying an engine
protect cover offers your engine the much-needed protection, especially if you
reside in an area prone to waterlogging.
3. Return to Invoice (RTI) cover - This add-on plan protects your vehicle from
total loss expenses. In the event of a total loss scenario such as a car theft, it
provides you the actual invoice value of the vehicle, without accounting for its
depreciation with age.
4. Loss of personal belongings cover - Loss of expensive electronic equipment,
laptops, etc. kept in the insured vehicle is offered coverage under this add-on
insurance plan.
5. No Claim Bonus (NCB) protect cover - No Claim Bonus is a significant bonus
offered by insurers to drivers who refrain from raising motor insurance claims in a
policy year. You can preserve this bonus even after raising a claim if your vehicle
insurance has an NCB protect cover.
6. Personal accident cover for the passengers - The comprehensive car insurance
policy can be enhanced to offer protection for the passengers by opting for this
rider.
18
7. Key replacement cover - Under this cover, the insurance company reimburses
the cost of replacement of the vehicle keys if these were lost or misplaced.
8. Roadside assistance cover - This add-on cover offers 24/7 protection to the
policyholder from incidents such as flat tyre, fuel depletion, requirement for
expert scrutiny, etc.
9. Consumables cover - Components that are used in a vehicle such as nuts and
bolts, screen washers, engine oil, etc. are collectively referred to as consumables.
The insurance company does not bear the cost of these components at the time of a
claim. However, if your vehicle insurance was equipped with this rider, you will
receive coverage for consumables.
10. Daily allowance cover - This add-on cover offers reimbursement for the expenses
involved in hiring an alternate vehicle when the insured automobile is undergoing
repairs at a garage.
11. Type of vehicle –
Motor insurance policies can be classified into two types based on the vehicle for
which it is purchased: This coverage offers insurance protection for all types of
cars and SUVs
Two-wheeler insurance - This insurance plan is availed to protect a
twowheeler from eventualities such as accidents, natural disasters, theft,
manmade calamities, etc.
Apart from the above, motor insurance is also segregated based on the purpose
of use of the vehicle. So, you can opt to buy a private motor insurance policy for your
personal vehicle. Along the same lines, a commercial motor insurance plan will offer
insurance coverage for the vehicle you will be using for business purposes.
19
PUBLIC POLICIES :
In many jurisdictions, it is compulsory to have vehicle insurance before using
or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both
the car and the driver; however, the degree of each varies greatly. Several jurisdictions
have experimented with a "pay-as-you-drive" insurance plan which utilizes either a
tracking device in the vehicle or vehicle diagnostics. This would address issues of
uninsured motorists by providing additional options and also charge based on the
miles (kilometers) driven, which could theoretically increase the efficiency of the
insurance, through streamlined collection.
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.
Private Car Insurance – Private Car Insurance is the fastest growing sector in India
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.
This amount can be reduced by asking the insurer for No Claim Bonus (NCB) if no
claim is made for insurance in previous year.[16]
Two Wheeler Insurance – The Two Wheeler 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
20
Advisory Committee at the beginning of a policy period.
• 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.
21
standard and basic coverages such as comprehensive and collision insurance, auto
repair insurance does not cover a vehicle when it is damaged in a collision, during a
natural disaster or at the hands of vandals. For many it is an attractive option for
protection after the warranties on their cars expire.
Providers can also offer sub-divisions of auto repair insurance. There is standard
repair insurance which covers the wear and tear of vehicles, and naturally occurring
breakdowns. Some companies will only offer mechanical breakdown insurance,
which only covers repairs necessary when breakable parts need to be fixed or replaced.
These parts include transmissions, oil pumps, pistons, timing gears, flywheels, valves,
axles and joints.
22
Problems of Automobile Insurance in India :-
1. Motor tariff rates –
The problem of motor vehicle insurance companies are that they were
facing continuously adverse claim experience through its statutory legal liability
section. A large amount of motor vehicle insurance was taken but commercial
vehicles owners have heavy incidence of claims for several years. The
commercial motor vehicles owners were not in the favors of increasing motor
tariff rate and most of the times they oppose this through stikes. Several measures
were taken by various committee to solve the issue related to motor tariff rate but
nothing yet to be done.
3. Underinsurance-
According to estimates, around 40 per cent cars and 70 per cent two
wheelers are underinsured. The traditional distribution channels have failed to
spread the insurance beyond a point. Since the premium of an insurance policy
for a two-wheeler is less than Rs1,000, agents do not consider it a lucrative
business due to lower commissions.
23
Transport Authority, the driver‘s fault account for a whopping 77.5 % of the total
road accidents. Yet the pricing is based more on the year ofmanufacture of the
vehicle, engine capacity, price and the zone in which the vehicle is bought and
less on the age, occupation and credit score of the driver and usage of the vehicle.
5. Lack of awareness-
In today’s world the problem faced by motor insurance business markets
is not a shortage of goods (insurance products) but a shortage ofcustomers.This
arises due to lack of awareness and understanding on the customer’s side.
Insurance is ―PEOPLE‘S BUSINESS‖. Insurers are dealing with people who are
their policyholders, claimants, intermediaries, beneficiaries andeven employees.
Insurance is sold and seldom brought. Insurance selling is complex & difficult.
Motor insurance customers are aware about the basic coverage of the policy but
they are unaware about the claim, excess and bonus related to policy.
6. Negligent motorists-
In India many cases are there where innocent persons who are injured in
auto accidents are unable to recover financial damages from the negligent
motorists who injured them. Although accident victims may have bodily injuries
or suffer property damage, they may recover nothing or receive less than full
indemnification.
24
9. Excessive cost and payouts-
Excessive cost and continuous payouts trends are the factor that creates
problem for Indian public sector motor insurance companies.Their cost exceeds
their collected premium
25
14. Coverage-
The another challenge in front of motor insurance companies is coverage,
here coverage means coverage of insurance in a territory. Several vehicles ply on
special permits to cover large territory. Five state composite permit, seven state
national permit, zonal permit etc. enable the vehicles to cover very long
distances. This type of change in operation makes control of operation a difficult
task and this introduces a new dimension of risk. Contract carriage operating
under All India permit also form a different class of risk since the operation takes
the vehicles to far off places where the insured cannot exercise proper control.
16. Renewal-
The real problem is the renewal of the policies from the second year
onwards when the vehicle owner fails to take it seriously. Even among those that
go to renew their policies, there is a high incidence of opting only for the
mandated third party liability, thereby defeating the very objective of insurance.
Reasons for not renewing are ignorance, carelessness, high premium amount and
busy time schedule.
26
Problems Related To Motor Insurance Customers
2. Lenthy Process-
In Indian motor insurance industry the problem that customers are facing
in relation to claim settlement is lengthy process due to legal formalities,
mismanagement of the company and inefficient staff specially in public sector.
Another challenge that policyholders are facing in this time are higher
premium charged by the insurance companies. Customer think that they are
paying more premium in comparison to the sum assured amount.
4. Term-
Most of the customers wanted long term motor insurance policy rather
taking one year policy specially in public sector motor insurances companies.
Coverage Level: Vehicle insurance can cover some or all of the following items:
27
Why Is Car Insurance Mandatory In India?
From the time car sales observed a growth in the country, it was apparent that
there would be crashes. These crashes could cause damages that the person at fault
may not be able to pay for. So the underlying necessity of buying car insurance at the
time of purchase of a car seemed to make complete sense.
As the Indian economy grew, the disposable income in the hands of the
common man saw an increase. This, coupled with the availability of car financing, has
made it easy to own a car, sometimes even more than one in a family. After all, having
your own mode of transportation is more convenient than relying on public transport.
When you buy a car, it is necessary that you buy car insurance as well. The Motor
Vehicles Act, 1988, mandates this due to the following reasons:
28
Comprehensive Car Insurance
Although it is not mandated to buy a comprehensive car insurance policy, it is
advisable to do so. The coverage offered by a comprehensive plan includes the
following:
29
“THE LEADERS IN THE AUTOMOBILE INDUSTRY AND
CREATING CUSTOMERS DELIGHT; A PRIDE OF INDIA”
MILESTONES:
Maruti Udyoglimited was incorporated under the provision of Indian
companies act, 1956 in the year 1981. licence and joint venture agreement signed
between maruti udyog limited. And Suzuki motor corporation of Japan. in the year
1983 the company launch maruti 800 into market. It was the India’s first affordable
car. The production of this car was started under the joint venture between the two.
This what's the small car launch. Then it became the great success till today.
Nobody is able to achieve success as the maruti 800. Then came the launch of multi
utility vehicle that is maruti Omni full stop it was also a great success it was used for
carrying small goods and also then for the used as an ambulance. In the year 1985
maruti Gypsy came into market. This car was mostly used by police full stop then in
the year 1987 maruti started exporting to the Hungary.the export word of small car
maruti 800. Maruti launched maruti 1000 in the year 1990. It was the India’s first
fashionable sedan. In the year 1933 maruti launch its new car that is maruti Zen. There
was a great demand for Zen. Later after success in India they exported to Europe. In
the 1994 maruti esteem was launched. This was the year the maruti produced its 1
millionth vehicle since the commencement of the production. Maruti has provided
vehicle services outlet throughout the country. In the year 1996 24 hour emergency
on-road vehicle services was launched. In just 3 years maruti was succeeded to
produce its 2 millionth vehicle. Later in 1999 maruti launch two cars that is one in
midsize segment WagonR and in the UV segment baleno. In the year 2000 maruti
launch its new car Alto and Alto. Alto is a luxury estate car .Auto become a great
30
success. Alto became India's new best selling car. In the year 2001 maruti launch
versa full stop for the year 2003 Grand Vitara was launched full stop recently in the
year 2005 maruti came with a new car Swift. Through all these years maruti was
launching its product as well as its different versions. It continued updating its car to
meet the consumer’s demand.
31
THE LOW COST MAINTENANCE ADVANTAGE:
The acquisition cost is unfortunately not the only cost customer face while
buying a car. Although a car maybe affordable to buy, it may not necessary be
affordable to maintain, as sum of its regularly used spare parts may be priced quite
steepy .not show in the case of Maruti Suzuki. It is in the economy segment that the
affordability of spares is most competitive, and it is here where Maruti Suzuki shines
The police also have the power to seize and destroy any vehicle being driven
without cover.
32
Types of car insurance
There are three levels of cover you can choose from - third party; third party, fire and
theft; and comprehensive.
• Third party - This is the bare minimum required by law, but isn't always the
cheapest. It covers injuries to other people and damage to others property.
• Third party, fire and theft - This is the same as third party but also covers the
cost of repairs or a replacement vehicle if your car is stolen or damaged by fire.
• Comprehensive - This is the highest level of cover you can get. It protects against
damage to your own car as well as accidents involving other people. It can also
include a courtesy car and legal expenses insurance; however this may be at an
additional cost.
Your insurer may also allow you to add named drivers to your policy who can also
drive your car, but it’s important to remember that the main driver must be the person
who drives the car the most.
Learn more about the different types of Breakdown Cover that RAC also provide to
help keep you safe on the road.
Always make sure your insurer is regulated by the Financial Conduct Authority.
33
No Claims Discount
For every year you don't make a claim on your car insurance, you'll earn a years
No Claims Discount (up to a maximum of 9 years). This No Claims Discount is then
translated into a discount at renewal, although a reduction in premium is not always
guaranteed should there be a change in your circumstances or the markets.
Often, this will remain intact if you make a claim for an accident that wasn’t your
fault. You must always notify your insurer of any accidents you’re involved in, even if
you don’t make a claim.
With RAC car insurance, you can get up to 65% off your premium if you haven’t
made a claim for more than nine years.
Specialist policies
Sometimes people's insurance needs are different, and if your car is particularly
unusual, you might need a specialist policy such as classic car or American classic car
insurance.
It’s always a good idea to look at what the rest of the market is offering before
you make any decision about your current provider, the level of cover they offer, or
the price you’ll pay for it.
So, if you’re asking yourself, ‘when and how should I renew my car
insurance?’ we’re here to help. It can be quite confusing to know whether to auto-
renew or not, but here are a few pointers that’ll help you on your way to the open road.
Excess :
An excess payment, also known as a deductible, is a fixed contribution that
must be paid each time a car is repaired with the charges billed to an automotive
insurance policy. Normally this payment is made directly to the accident repair
"garage" (the term "garage" refers to an establishment where vehicles are serviced and
repaired) when the owner collects the car. If one's car is declared to be a "write off" (or
"totaled"), then the insurance company will deduct the excess agreed on the policy
from the settlement payment it makes to the owner.
If the accident was the other driver's fault, and this fault is accepted by the
third party's insurer, then the vehicle owner may be able to reclaim the excess
payment from the other person's insurance company.
Compulsory excess
A compulsory excess is the minimum excess payment the insurer will accept
on the insurance policy. Minimum excesses vary according to the personal details,
driving record and the insurance company. For example, young or inexperienced
drivers and types of incident can incur additional compulsory excess charges.
Voluntary excess
To reduce the insurance premium, the insured party may offer to pay a higher
excess (deductible) than the compulsory excess demanded by the insurance company.
The voluntary excess is the extra amount, over and above the compulsory excess, that
is agreed to be paid in the event of a claim on the policy. As a bigger excess reduces
the financial risk carried by the insurer, the insurer is able to offer a significantly
lower premium.
35
Top 10 Automobile Insurance Companies in India:
Getting a Motor Insurance, unlike other forms of insurance, is not a choice but
a legal compulsion. It is mandatory to have a third-party motor insurance under Indian
Motor Act. But it is recommended by experts to get a comprehensive insurance for
your prized possession. A comprehensive plan covers a vehicle not only on the loss/
damage caused by you to a third party (driver/vehicle/property) but also loss /damage
caused to your vehicle by natural/man made calamities. To top it up, every insurer
offers a host of valuable add-ons on the basic plan to make the coverage even more
effective.
The public sector insurers have always enjoyed the customer’s preference over
private sector insurers. Though, the pattern is bending in favour of private insurers
since the last few years.
Last year, the brand bagged reputed awards for being the best employer and
deployment of mobile application in insurance.
37
Why it is the best ?
• Claim decision taken within 3 days of application
• Surveyor appointed within 48 hours of claim intimation
• Claim payment made within 3 days of discharge voucher receipt
• Grievance acknowledged within 3 days of receipt
• Grievance resolved within 15 days of receipt
ICICI Lombard is one of the top private general insurance firms in India. A
brainchild of ICICI Bank, ICICI Lombard has a stronghold in the insurance market,
especially for car insurance. The company has sold more than 17 million policies so
far and has settled more than 2 million claims by the end of the last fiscal year. They
offer insurance products designed to meet the needs of customers from both urban and
rural population. They provide insurance solutions that cover personal, project and
business liabilities. ICICI Lombard Car Insurance covers the following:
38
• Third Party Legal Liability
• Personal Accident Cover
ICICI Lombard also has a hassle-free claim settlement process.
• 50% of No Claim Bonus (NCB) transfer from any other car insurer
• Extensive cashless garage network with over 4000 garages
• The option of availing car monitoring devices through their unique
39
DriveSmart Telematics Service
• Zero depreciation cover is offered as one of the rider options
40
United India Insurance Co. Ltd.
United India Insurance started its operations in India in February 1938. The firm
has a stronghold in India with over 1300 offices across the country providing quality
insurance solutions. They have a large workforce of 18,300 employees. They are one
of the trusted insurance firms with a customer base of 1 Crore policyholders in India.
They also have micro offices situated at over 200 tier II and III villages and towns
serving the rural population too. Their car insurance scheme has the following key
features:
• Policyholders can buy or renew their third-party liability car insurance policy
online on the website of the insurer.
• Hassle-free claim settlement process.
• Round-the-clock customer care service.
• Choice between a third-party insurance policy and a comprehensive car
insurance policy.
• Compensation for the third-party up to Rs.7.5 lakh as per Insurance
Regulatory and Development Authority of India regulations.
41
Future General India Insurance
42
Motor vehicle insurance law in India
Motor vehicle insurance law in India is governed by the Motor Vehicles Act,
Insurance Act and aspects of insurance contracts governed by the Indian Contract Act,
Transfer of Property Act and a 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.
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.
43
STORY OF SUCCESSFUL AUTOMOBILE COMPANY IN INDIA
MARUTI SUZUKI
Motor vehicle insurer:
With the emergence of insurance company booms in India there has been
occurrence of bike insurance company as mushrooms. There are very few players
which has been identified by the Insurance Regulatory and Development Authority of
India.
1. First and foremost, as the policyholder, you will have to submit a duly filled in
claim form along with the requisite documents to the insurance company and
inform the insurance company before you send the car to the garage for any
repairs. The forms are available on the insurers’ websites as well as at their
offices.
2. The insurance company will send a surveyor to assess the damages. The
surveyor will prepare a report and pass it on to the insurer and you will also
receive a copy.
3. If the damage is severe and requires immediate attention, then the surveyor will
reach the spot of the accident at the earliest.
4. Based on the surveyor’s report, you can arrange for your car to be repaired.
5. After the work is completed, you will have to take the duly signed bills and
documents from the garage and submit them to surveyor, who in turn will send
it to the insurance company.
6. If all the documents are in place, the insurance provider will reimburse your
44
bills.
Remember that the insurance company will not reimburse your bills if you do
not submit them immediately after your car is released from the garage.
1. First and foremost, as the policyholder, you will have to submit a duly filled in
claim form along with the requisite documents to the insurance company and
inform the insurance company before you send the car to the garage for any
repairs. The forms are available on the insurers’ websites as well as at their
offices.
2. The insurance company will send a surveyor to assess the damages. The
surveyor will prepare a report and pass it on to the insurer and you will also
receive a copy.
3. If the damage is severe and requires immediate attention, then the surveyor
will reach the spot of the accident at the earliest.
4. Based on the surveyor’s report, you can arrange for your car to be repaired.
5. After the work is completed, you will have to take the duly signed bills and
documents from the garage and submit them to surveyor, who in turn will send
it to the insurance company.
6. If all the documents are in place, the insurance provider will reimburse your
bills.
7. Remember that the insurance company will not reimburse your bills if you do
not submit them immediately after your car is released from the garage. So
you cannot keep the small bills and hope to submit them at the end of the year.
45
Car insurance claim process for a third party claim
1. If a third party has sent you a legal notice asking for a claim, do not
communicate with the party before informing your insurance company. Also
remember not to make any financial commitments or out-of-court settlements
before speaking to your insurer first.
2. Submit a copy of the notice to your insurer.
3. You will also have to submit copies of the RC book of the car, the driving
licence and the FIR.
4. The insurer will verify the documents and assess the accident and if found
satisfactory, you will get a lawyer appointed by them.
5. If the court directs you to pay the damages to the third party thereafter, the
insurance company will directly pay the dues to the third party
1. First of all, file a complaint with the police and lodge an FIR.
2. Submit a copy of the FIR to the insurance company.
3. Once you receive the final police report, make a copy of it and submit it to your
insurance provider.
4. The insurance company will assign an investigator. Cooperate with the
investigator.
5. Wait for the claim to be approved.
6. Once that is done, submit the RC book of your stolen car to the insurance
company. The name of the owner will then be changed to the in insurance
company. The name of the owner will then be changed to the insurer’s name.
7. Submit the duplicate keys of the car and also a subrogation letter. You will also
need to submit a notarized indemnity on a stamp paper.
8. Once all the formalities are completed, the insurance company will disburse the
claim.
CHAPTER 2.
RESEARCH METHODOLOGY
• To study the various factors influencing customer choices for motor vehicle
insurance.
• To suggest any suitable changes for service improvement in India Insurance of
vehicles.
• To create awareness about the motor insurance regulation and rules of India.
47
Sampling: -
Foundation of Data: -
• Primary Data: -
In this method of questionnaire contains question related to the research that would
be asked to the respective respondent who a part of research study is concerned
with the request to answer the questions of the respective questionnaire and return
back to the researcher.
• Secondary Data:-
Data collected by the newspaper magazine journals by marketing and articles and
books secondary data is not much effective when compared to primary data but
gives information on a particular study any research start with secondary data.
Sample Design
Sample techniques Random Sampling
Sample Method Probability Sampling
Sample Unit Vehicle Insurance in India
Instrument Questionnaire
Sample Research Automotive industry in India
48
Scope of Study:-
The present research work will be of immense help to the Vehicle Insurance
Industry since not much work has been done in this area, and therefore, the research
work will try to open new gateway to study the role of Third Party Administrators
(TPAs) and their services, especially the claim-processing and settlement services
between the policyholders, insurance companies and the healthcare providers. With
the rapid change in technologies in this sector and growth of policyholders, the time
has arrived, that Insurance Regulatory and Development Authority (IRDA) issues
regular guidelines and regulations to the Third Party Administrators (TPAs) in order
to improve and enhance their services in the urban and rural areas as well.
The present research work will provide assistance for further studies to the
scholars, academic institutions and the Insurance Companies to analyze new insights
into the role and performance of Third Party Administrators (TPAs). It will be of
immense help to the vehicle insurance companies in perceiving the customer
satisfaction level towards the services provided by the sample TPAs and therefore
improving the customer services by inducing proper synchronization between
policyholders, TPAs and vehicle insurance companies. It will provide an understanding
to the policyholders to avail better services & facilities during the processing of their
vehicle insurance claims.
49
AUTOMOBILE INSURANCE IN INDIA
CHAPTER: -3
REVIEW OF LITERATURE
INTRODUCTION
The review of literature on the present study ”The study of Vehicle insurance in India
with special reference to car insurance in India" is classified into 17 Books. 13
Reports, and 10 Newspapers Articles etc. The literature shows author’s point of views
on the vehicle and car insurance norms in India. Authors of various books explain the
past and the present of the insurance industry in India with an eye on the global
changes. Then the concept and the definition of insurance, insurance contract and the
historical of motor vehicles act are also mentioned in systematic by various authors.
Certain books show the importance of coverage of UK and International Insurance
Markets and the impact of Globalisation, harmonisation. and convergence along with
the role of insurance within financial framework is explained in comprehensive
mechanism. The role competitive insurance market, regulatory approach reflects
different interest, liberal insurance market, market power, path towards competitive
solvent insurance market, and future role of government towards the Indian market is
critical analysed by various authors. The business policy of insurance in India, claims
procedures, sewage disposal, basic claims settlements, insurance risk management
and its procedures of insurance business in India was well explained by books
authors. The certain authors analysis on motor vehicles Acts in India 1988. claims
tribunals formation growth, compensations procedures, insurance of motor vehicles,
legal procedures evidence, appeals in courts relating towards legal aid. criminal law.
Lok Adalat cases and settlements etc issues in India.
50
The Literature review on books, reports, and newspaper articles for present
study is mentioned below :-
51
3. Mr. H. Narayanan, "Indian Insurance a Profile - Past and Present of Indian
Insurance Industry with focus on Global Changes, JAICO Publishing House
Mumbai 2010 The insurance industry in India has come a long way. within a
decade of India obtaining her independence, the makers of modern and
independent India decided to bring in the life insurance industry into mainstream
of national life to give a meaningful expression to the social aspiration of the
people of India, 'the book shows the effectiveness and substance on Life
Insurance Corporation and the General Insurance Corporation contributing to
redesigning the socio economic fabric of modern India as part of the post
independent economic history of India. Though these two organisations have
interlaced and intertwined their destiny with that of India, preference shift in the
Indian markets, new realities of the Global Economic order, and demands arising
out of multilateral trade agreements have all left India with no option other than
throwing open its economic and commercial policies to global competition and
challenges. In such circumstances the Insurance Industry of India could not
remain protected and insulated from facing new challenges. The global exposure
of the Indian Economy appears to have paved for the unprecedented economic
resurgence. Author ll.Narayanan tries to profile the past and the present of the
insurance industry in India with an eye on the global changes. The concept and
the definition of insurance, insurance contract, and the history of motor vehicles
act beginning were taken as reference study.
52
5. DheerajRazdan "Insurance Principles, Application and Practices" Cyber
Tech Publication New Delhi 2008, Book no; - 20257 (NIA) The details of
history and origins of insurance business in the world are mentioned in the book.
The analysis of general insurance business operations and decision making are
given in comprehensive pattern. Book analyses the business policy of insurance
in India, claims procedures, salvage disposal. Basic claims settlements, insurance
risk management and its procedures of insurance business in India is mentioned
in the book. Operation of insurance business in India along with the governmental
procedures is also mentioned in detail. The financial procedures and policies are
given in detail format. The concept of history and origins of insurance is taken as a
reference for study.
8. Janak Raj JAl "Motor Accidents Claims and Procedures" Universal Law
Publishing Co Ltd New Delhi 2007, Book No;- 19736 (NIA) The book shows
the detail of Motor Vehicles Acts in India 1988. Claims Tribunals Formation
growth. Compensations Procedures. Insurance of Motor Vehicles. Legal
Procedures Evidence. Appeals in Courts Relating towards Legal Aid. Criminal
law. Lok Adalat cases and settlements etc. The reference from the book is taken
on the definition on Motor Car. Carriage Goods. Heavy Motor Vehicle and Light
Motor Vehicle, and Motor Vehicle Act difficulties in the beginning. Compulsory
Insurance. Lorem. Amendment of 1969. Insurance against Third Party Risk, and
the provision of third party insurance is compulsory is taken as the reference
study.
10. R.K. Gantra, "Motor Insurance '' 2010 l.C. Insurance Institute of India
Mumbai 2010, Book no;- 22361 (NIA) The book is a collection of various
forms and documentation of the motor insurance in India. The book is the
upgraded version on motor insurance introduction, legal aspects, motor insurance
policies, motor insurance practices, documents, underwriting, claims, motor third
party pool. Information Technology in motor insurance. The information about
vintage car and light motor vehicle weight and gross motor vehicle weight
analysis in the current motor insurance scenario was taken for the reference
study.
54
11. Mr. Kluwer "HandBook of Insurance" Hand book (Compiled folder), Book
no;6988 (NIA) It is the compiled set of folder book named "Handbook of
insurance " the book consists of various segments on the general principles and
the market of insurance. Property and business interruption of insurance,
engineering insurance, liability insurance, construction insurance and the issues
of motor insurance market, legislations and general principles, insurance of
private cars and motorcycles, insurance of commercial vehicles, motor trade and
contingent liability insurances. The Motor Vehicles (Compulsory Insurance)
regulations in 1992 come into force on 31''' Dec 1992 implement the third motor
insurance directive under which there is requirement for motor policies to cover
all passengers including those in the employment insured were taken as reference
study.
15. Confederation of Indian Industry Ernst & Young "Indian Insurance Sector-
Stepping into next Decade of Growth" Date - 1.9.2010 The report given by the
editorial team of Confederation of' Indian Ernst & Young provides extensive
information on Indian industry overview. Indian Industry)' on the crossroad of
development. Critical factors for market development and way forward for
Indian Insurance sector. The report is also an analysis of growth drivers,
financial inclusions. distribution channels, emerging trends, untapped latent
potential industry. recent regulator)' govern the current market state and
consumer preferences. The Indian Insurance market and Evolution of the
industry is taken as the reference study from the given report.
16. Report by United India Insurance CO. Ltd - "Private Car Package Policy ''
Date- 1.1.2002 The report is the analysis given by the United India Insurance
Company limited (GIC) government entity. on the Insurance Policy issued to the
customer for Car Insurance. The report that contains the entire procedure of car
insurance in India. The procedure mentioned in this report is followed by the
public and the private car insurance companies in India. The key components of
the car insurance is the procedure of loss or damage to the vehicle insured. Sum
insured declared Value (IDV). Liability to the Third Party. Personal Accident
cover for owner driver. General inspection (Applicable to all section of policy).
Terms and conditions of the motor insurance companies and the provisions of no
claim bonus. The analysis on car insurance policy, and its operations in India was
taken for the reference study.
56
17. Annual Report by Bajaj Allianz General Insurance Company Report
lO"'Year2009-10 The report is given by the Bajaj Allianz General Insurance
Company Limited is on the analysis of yearly performance of the company. The
certain parts of competitive environment core values of Bajaj general insurance
company on Customer First Always. Organisation above Self. Trust. High
Standards. Shared ownership. Spirit of Adventure, and Respect for Diversity was
taken for the reference study
18. Annual Report; Bajaj Allianz General Insurance Co. Ltd Report 11"'
(Policy Booklet) Date - 31.10.2011 Report on Baja) Allianz Central Insurance
Company Limited is on the analysis of yearly performance of the company. The
similar grounds analysis for car insurance policy operations measures in India are
shown in the report. The report file contains the similar car insurance policy
mechanism of loss or damage to the vehicle insured. Sum Insured Declared
Value (IDY). Liability to the Third Party. Personal. Accident cover for owner
driver. General Exception (Applicable to all sections of policy). terms and
conditions of the motor insurance companies and the provisions of no claim
bonus. Report was selected to show a similar kind of car insurance policy issued
by the private general insurance company. The reference on the No Claim
Bonus procedure, compulsory deductible, legal liability to paid driver or
conductor or cleaner employed in connection with the operation of insured
vehicle. and personal accident to an unnamed passenger other than insured and the
paid driver and cleaner procedure u as taken for the reference study.
57
introduction of the Insurance Regulator) and Development Authority (IRDA).
Objective Statement of IRDA. Insurance (Amendment) Bill. 2001. insurance
Association and Insurance Council, functions of IRD.A. the statutory function of
the authority ensured in section 14 of the Insurance Regulator)- and Development
Authority) Act 1999. and organisational matters of insurance Regulatory and
Development. Authority were taken for the reference study.
21. Insurance regulatory Development Authority 11" Annual Report "S ear -
2010 -11, Source; v.irda.gov.in Report b> Insurance Regulatory
Development Authority (IRr3.'\) is the annual report of the year 2010 - 2011
(I l"' Annual Report). The report is the analysis on the policies and
programmers on current Indian insurance market and various sectors of
58
insurances, review of working and operations of insurance business and
international co - operations in insurance business. public grievances. Insurance
associations and insurance councils, statutory and development functions of the
authority}'. and organisation matters relating to the insurance business are dealt
within, 'the application on Indian Motor Third Party' Insurance Pool (IMI PIP) is
taken as the reference study.
22. The Indian Express (Express Money Editions) - Amitabh Jain VP Customer
Service Motor ICICI Lombard, "You can save money on that Car
Insurance Policy" Date - 13/2/2012 The Indian Express, article was about
current claim procedures determinants and tips for lowering your car insurance
premiums. Article given in newspaper is taken for the reference study. The
details of article was on car insurance is the combination of own damage and
third party liability coverage. Own damage part of the insurance covers any
damages /theft (total or partial) oi' the car whereas third party covers any
damages and injury caused to a person and property by the insured car. The
primary factors that determine our car insurance premium are the make / model
of the car. age 72 of the car and city of registration on the basis of IDV Insured
Declared Value. The claim procedures are determined on the company package
policy. Tips on lowering \our car insurance Premium on the issues of no claim
Bonus. Discount for Ami Theft Devices. Automobile Association Membership
Discount and going online was mentioned in the article.
23. The Economic Times of India - Editors pane! (New Delhi) "India will be 3rd
Lar``iest Light Vehicles Market by 2020'' Date - 14/6/2011 The Economic
Times of India, article on the written under the panel of editors of Economic
Times on the future growth in vehicle industry is mentioned in this article was
basically about the predictions that ""India will be the 3rd Largest Light Vehicles
Market by 2020"" states that India will become the third largest market in the
world after China and I'S for light vehicles. including passenger cars and Light
Commercial Vehicles (LVC) b>' 2020. According to market research firm .ID
Power Asia Pacific, 'the country however. will ha\e to improve its infrastructure,
as well as resolve component supply chain issues, in order to realise its huge
potential. India will become the third biggest market for light vehicles that
includes passenger cars and LVCs. with total sales of neath' 12 million units. In a
59
report given by India Automotive (2020). By 2020. China's light vehicles market
is expected to reach 35 million units. while that of the US will rise to 17.4
million units. There is a huge potential in Indian market, but the key challenges
lie in infrastructure growth to support the automotive industry. India Automotive
report pointed out that the average income of Indians expected to be moderate
even in 2020; vehicles demand will still be focused in lower end passenger
vehicles segment as well as in Sports Utility Vehicles (SUV) and Multi Purpose
Vehicles (MPV) segments. The article was taken as a reference study.
24. The Economic Times of India - Editors Panel "Car sales rise just 7% to 1.58
L in May, Slowest in Two Years" Date - 10/06/2011 The Economic Times of
india. article on the car sales in the current scenario of the Indian market is
mentioned by the editors of economic times as the article was taken for present
reference study. The article mentions the car sales growth at their slowest pace in
two years in May. as rising fuel cost and costlier loans dampened demand. The
sales figures heightened fears that stubborn}' high inflation and aggressive rate
hikes by the Reserve Bank of India to tame it are crimping economic growth.
Sales rose just 7% to 1.58 lakh units during the month, as against .30"/» jump in
deliveries to 1.48 lakh units in the year ago period, data released by the Society
of Indian Automobile Manufacturers (SIAM). This trend is likely to continue for
some time, after which there will be pick up in sales hopeful)'. Demand for
vehicles in India, an important gauge of the country's economic health, is led by
a middle class that mostly bases its purchase decisions on the price of fuel and
loans. I've growth rate was down for cars, the growth in numbers was the seat
since Ma)' 2009 when car sales rose 2.77%. (SIAM) expects sales to drop to 12 -
% in the current financial year, after it surged 30% last >ear to 1.98 million units,
driven mainly b\' a demand from the growing middle class. Liberal economic
policies of the government of India have contributed significantly towards the car
market in India. Many foreign investors ha\e become interested in coming and
investing open handedly in the car market of India. Reduction in the rate of
customs for small vehicles has also supported a substantial boom in the Indian
automotive industry. It is expected that the car market in India is going to be one
of the biggest car markets in the world.
60
25. The Economic Times - Editors Panel of India "Car sales post slowest
Growth in 27 Months" Date - 12/07/2011 The Economic Times, article on
the car sales of 2011 is mentioned in detail. The article is about the Domestic
passenger car sales saw its growth in 27 months in June 2011 at 1.67%. The Car
sales stood at 1. 43.370 units in June 2011 this )ear against 1.4!.0- the Society}'
of Indian Automobile Manufacturing (SIAM). This article was taken for the
reference study on the present scenario of car industry sales in India.
26. The Times of India - Editors Panel of India ``Car sales in Positive Zones in
Feb" Date2/3/2012 The Times of India, article on "Car sales in Positive
Zones in Feb 2012"" is the article taken for reference stud)'. The article
mentions that car sales remained positive in Feb 2012 as people purchase
vehicles ahead of an expected duty hike in the budget. Car sales, that suffered
this fiscal on account of higher interest rates and sharp rise in petrol prices, have
been holding steady over the last two to three months as companies cleared
inventories through discount and special offers. Company executives and dealers
said a possible duty increase on diesel cars that can see their retail prices go up
and has led to customers to buy vehicles. Maruti March towards normally
continued as company volumes were up 6% at 1.07 lakh units in 2011. While
companies like Tata Motors, Hyundai, Mahindra, Toyota continued their healthy
run. The sales were not on expected lines as the market continued to be sluggish.
High interest rates, hike in fuel prices, commodity prices, inflation and negative
market sentiments continue to put a lot of pressure on the automobile market.
27. The Economic Times of India - Vidyalaxmi & Preeti Kiilkarni "5 Add - ons
Luxury Car Insurance must Have" Date - 7/09/2012 The economic Times,
article on "5 Add onsluxun Car Insurance must Have"" analysis on car
insurance covers have become high) comprehensive. offering a range of add -on
that are crucial, especially for the luxury cars. While ignoring comprehensive
insurance would be a mistake, resisting the urge to splurge on heavily - promoted
add - on is advisable. the article analysis add- on cover offered by car insurance
companies is Depreciation Reimbursement. Engine cover. Roadside .Assistance
Lost Key Replacement. Return of Invoice. filing a Claim. Certain parts of the
article were taken for the reference study.
61
28. The Economic Times of India - Preeti Kulkarni "No Pay a Lower Car
Insurance Premium if you are Married" Date - 16/01/2013 The lu'onoinie
Times, article on "Now Pa> a Lower Car Insurance Premium if you are
married"" was taken for the reference study. The article analw.es factors like
profession, gender and marital status, among many others, are now being used by
insurance companies to determine the premium. Traditionally, car premiums
were decided upon the basic factors like engine capacity, age of the car. and
geographical zones. Over the last four years insurers in India have started using
several other asset based parameters such as fuel used in the car. effective anti
theft device etc. Further few insurers now are trying with demographic
parameters as well. Now in terms of demographic parameters the companies
have started taking into account the insured age, gender, occupation driving
experiences. For instance, married individuals in the age group of 32- 60 are
entitled to discounts as they are perceived to be more responsible drivers as such
things are taken as a rating parameters. Discounts on the basis of such personal
information can go up to 20%. Likewise the loading on premium, can be high as
20% '' the possibility of discounts in one calegon being cancelled due to loading
in another cannot be ruled out. I'or instance, a high premium due to the fuel t\ype
max nullifies the discount earned on the account ol"occupational age. The Article
also states the ad\antages of certain discount factors like providing more
information in the proposal form: Buy Police online. protecting individuals No
Claim Bonus. Higher Deductibles. Choosing of Fuel Type '. and. Installing Anti -
Theft Devices.
29. The Economic Times of India - Ketan Thakkar & Bakul Chugan Tongia
"Petrol Vs Diesel Cars: V.cX your Fuel .Math right First'' Date-07/01/2013
The Economic Times, article on "Petrol Vs Diesel Cars: Ceet your Fuel Math
right First" the article analyses’ fuel price differential may tilt customer's
preference towards petrol cars. Since the hike in diesel prices the industry experts
the momentum for petrol cars to gather speed. Since then analysts say thanks to
hard - sell by auto companies to its dealers, the customers are now more
informed about which fuel powered car to choose depending on usage. The article
analyses’ petrol and diesel cars price rates of premium, usage measures, and
constant fluctuation on government price rates on petrol and diesel. The article
62
was taken for reference study.
30. The Times of India - Udit Prassana Mukerji "Third Party Motor Cover
Cost to Soar'' Date - 19/02/2013 The Times of huha, article on "Third Party
Motor cover cost to soar" was taken for the reference study, the analysis shows
that Insurance Regulatory Development Authority (IRDA) has recently proposed
a 38.87% weighted jump in Tl' motor insurance for private cars across all
subclasses in the exposure draft for revision of premium. The revision will hit
owners of entry level cars below look segments- the most as rise in TP cover
proposed for this category is 85%. The point of view from ICTCT Lombard.
Oriental and National Insurance companies are taken in the article to increase the
TP motor rates more due to high loss ratio in third parties.
63
64
65
AUTOMOBILE INSURANCE IN INDIA
CHAPTER 4:-
The Data Analysis Interpretation and presentation is done by questionnaire method for
my project automobile insurance in India:-
Questionnaire Method:-
The following questionnaire is to get overall measure of the attitudes and opinion of the
customer towards the Automobile insurance in India.
Male 5 11.1%
Female 40 88.9%
INTERPRETATION:
In the above pie diagram , the gender ratio of female is more than the ratio of male .
The male respondents are 5 which is less than the female respondents which is 40.
66
EMPLOYEE STATUS NO. OF RESPONDENTS PERCENTAGE
Students 34 75.6%
Business 3 6.67%
Employed 7 15.6%
Housewife 1 2.22%
INTERPRETATION:
In the above pie diagram the students, business, employed, housewife are considered.
In the above pie diagram the respondents of student are 34 and the respondents of
business are 3 where as the employed respondents are 7 and the respondents of
housewife is 1.
67
BRAND NO. OF RESPONDENTS PERCENTAGE
Ford 13 29.3%
Chevrolet 6 13.6%
Maruti 7 15.95%
Honda 12 27.3%
Other 7 15.95%
INTERPRETATION:
In the above pie diagram the brand of the vehicle is taken into consideration. In the pie
diagram chart many brands are taken into consideration that are Ford , Chevrolet,
Honda motor company, maruti, Audi Volkswagen group. The highest respondents is
of ford motor company which is 13, and 6 respondents have Chevrolet , and 7
respondent have maruti whereas 12 respondents have Honda 7 respondents have other
brands of motor vehicles.
68
YEAR NO. OF RESPONDENTS PERCENTAGE
2019 6 13.6%
2018 7 15.9%
2017 9 20.5%
2016 20 45.5%
INTERPRETATION:
In The above mentioned diagram the year of manufacture of a car is considered. The
year 2016, 2017, 2018 and 2019, are taken into consideration and the highest
manufacture of a car is 20 in the year 2016 and the lowest manufacture of a car is 6
which is in the year 2019 . And the above pie diagram also shows that in the year 2017
the manufacture of car is 9 and in the year 2018 the manufacture of a car is 7.
69
YEAR NO. OF RESPONDENTS PERCENTAGE
INTERPRETATION:
In the research the respondents were asked that how many has been over for the
purchase of car. Out 45 respondents 19 respondents says it is more than one year, 15
respondents says it is more than three years, 6 respondents says less than year and 5
respondents says more than 5 years.
70
NO. OF VEHICELS NO. OF RESPONDENTS PERCENTAGE
1 30 66.7%
2 9 20%
3 6 8.9%
INTERPRETATION:
In the above mentioned pie diagram there are 30 respondents of one vehicle as the
highest and 6 has lowest respondents of vehicle.
71
LOAN NO. OF RESPONDENTS PERCENTAGE
YES 36 20%
NO 9 80%
INTERPRETATION:
In the research the number of people having loan on their vehicle is 36 respondents
whereas 9 of the respondents doesn't have loan on their vehicles.
72
PURPOSE NO. OF RESPODENTS PERCENTAGE
Personal 38 84.4%
Official 6 13.3%
None 1 2.3%
INTERPRETATION:
In the research the respondents were asked for what purpose they use car. So, 38
respondent use car for personal use and 6 use for official use 1 respondent does not
use for any purpose.
73
REPAIR NO. OF RESPONDENTS PERCENTAGE
Yes 31 68.9%
No 8 17.8%
Maybe 6 13.3%
INTERPRETATION:
In the research, the respondents were asked ever they get repaired their car in the past.
So, 31 respondent were repaired whereas 8 not repaired their car and 6 respondents
are not they ever repaired their car or not.
74
REASON NO. OF RESPONDENTS PERCENTAGE
Accident 21 54.1%
INTERPRETATION:
In the above pie diagram chart , 21 of the people got repaired there car through accident
whereas because of mechanical breakdown 16 of people got repaired their car .
Therefore the reason for getting repaired their car is mostly accident.
75
HAPPY NO. OF RESPONDENT PERRCENTAGE
Yes 43 95.6%
No 2 4.4%
INTERPRETATION:
In the research the respondents were whether they are happy with services given by the
insurance company. So, 43 of respondents are happy and 2 of respondents are not
happy.
76
COMPANY N0. OF RESPONDENTS PERCENTAGE
Bajaj Allianz
co. Ltd
INTERPRETATION:
In the research 27 respondents is the highest insurance company of the car which is
insured with it is of Bajaj Allianz General Insurance cooperative limited where as the
lowest number is of ICICI Prudential is 1 respondent and 9 respondent of Tata AIG
general insurance Company limited has an average amount of car insured with and the
lowest 6 respondents percent it is of oriented Insurance Company limited.
77
AUTOMOBILE INSURANCE IN INDIA
CHAPTER 5: -
FINDINGS
1. In the research, the gender ratio of female is more than the ratio of male. The
gender ratio of male is 11.1% which is less than the ratio of female that is
87.5%.
2. In the research students, business, employed, housewife are considered. In the
above pie diagram the respondents of student are 75.6% and the respondents of
business are 6.67% where as the employed respondents are 15.6% and the
respondents of housewife are 2.22%.
3. In the research the brand of the vehicle is taken into consideration. In the pie
diagram chart many brands are taken into consideration that are Ford ,
Chevrolet, Honda motor company, maruti, Audi Volkswagen group. The
highest percentage is of ford motor company which is 29.5%, and 13.6% that
is of Chevrolet , and the maruti company is 15.9% percent whereas 27.3%
percent is of Honda.
4. In the research, the year of manufacture of a car is considered. The year 2016,
2017, 2018 and 2019, are taken into consideration and the highest percentage
of manufacture of a car is 45.5% in the year 2016 and the lowest percentage of
manufacture of a car is 13.6% which is in the year 2019 . And the above pie
diagram also shows that in the year 2017 the percentage of manufacture is
20.5% and in the year 2018 the percentage of manufacture of a car is 15.9%
5. In the research the respondents were asked that how many has been over for the
purchase of car. Out 45 respondents 42.2% of respondents says it is more than
one year, 33.3% of respondents says it is more than three years, 13.3% of
respondents says less than year and 11.1% of respondents says more than 5
years.
6. In the above mentioned pie daigram there are 66.7% of one vehicle as the
highest and 3 has the lowest percentage is of 8.9% .
78
7. In the research the number of people having loan on their vehicle is 20%
whereas 80% of the people doesn't have loan on their vehicles. Therefore 80% is
the highest that means more population does not have a loan on vehicle
8. In the research the respondents were asked for what purpose they use car. So,
84.4% respondent use car for personal use and 13.3% use for official use 2.3%
respondent does not use for any purpose.
9. In the research, the respondents were asked ever they get repaired their car in
the past. So, 68.9% respondent were repaired whereas 17.8% not repaired their
car and 13.3% respondents are not they ever repaired their car or not.
10. In the research, 54.1 % of the people got repaired there car through accident
whereas because of mechanical breakdown 45.9% of people got repaired their
car . Therefore the reason for getting repaired their car is mostly accident.
11. In the research the respondents were whether they are happy with services
given by the insurance company. So, 95.6% of respondents are happy and4.4%
of respondents are not happy.
12. In the research 61.4 percent is the highest insurance company of the car which
is insured with it is of Bajaj Allianz General Insurance cooperative limited
where as the lowest number is of ICICI Prudential and 2.27 percent of Tata
AIG general insurance Company limited has an average amount of car insured
with and the lowest 13.6 percent it is of oriented Insurance Company limited.
79
SUGGESTION
How-to-buy-car-insurance
Buying the right car insurance for your new car can be a tricky situation, if you are
unaware about how to make the right choice. Accordingto the Indian Motors Act, it is
compulsory for automobile buyers to insure their vehicle during purchase. So what
should you keep in mind when looking for an ideal policy for the newly purchased
vehicle? Here is all that you should know.
Do not settle for the very first option of a car insurance online, but compare before
selecting one. Check out the top providers in your area. Who gives a better service?
Take feedback from existing customers in the neighbourhood about an insurer. You
can compare policies on the basis of coverage, inclusions, exclusions, premium
amount, limitations, add-on facilities, optional covers, etc, and choose the one that
suits your budget and needs.
The primary beneficiary of the policy is the possible outsider member who can get
affected by the action of the vehicle owner or the vehicle. The cover extends to legal
liability and other financial assistance. It provides cover for damages to third-party’s
property, accident, death, bodily injury, total permanent disability, etc.
Exclusions include claims from contractual liability in case a person other than the
owner or specified driver was driving the vehicle, accidental damage/liability/loss
outside geographical boundaries than what is specified, liabilities because of warlike
operations, nuclear weapons, radioactive contamination, and likes.
80
remember, insurance premiums will not differ as per the car’s value as it is impossible
to understand the possible liability.
You have to bear a minimum amount on every claim. This amount you pay is the
compulsory deductible. The amount starts from Rs. 500 for a four-wheeler as per the
IRDAI rules. You can be charged a higher deductible for an older car with a higher
claim-risk. The company can even charge a higher deductible on a car policy for
vehicles with bigger cubic capacities or in scenarios when the risk of claim is
perceived as huge.
Voluntary deductible is the one that you decide to pay on your own. You can increase
this amount and lower the premium amount. Do note that compulsory deductible
unlike voluntary deductible, does not have an effect on the premium amount.
Claim Settlement
You should choose a provider who has a high claim settlement ratio. Claim settlement
ratio is calculated as: number of settle claims / number of claims reported + remaining
claims at the year’s start – remaining claims at the end of year.
When looking for car insurance, check for a personal accident cover. It will cover
expenses related to you as owner of the vehicle. It can protect against severe financial
contingencies due to accidental death from a mishap, accidental dismemberment of
limbs, accidental total or partial disability, reimbursement for hospitalization, injuries
or death caused due to act of terrorism, etc.
IDV of a vehicle is the maximum amount you can claim under the policy. This
amount is what you can get if your car is stolen or is totally damaged. After
subtracting the car’s depreciation value from its selling price as listed by the
manufacturer, you arrive at the IDV. Insurance and registration cost are not involved
in this calculation.
81
In-Network Garages
Check for the proximity and number of garages in your location when considering a
car insurance online company. The greater the network garages closes to your
location, the better will be the speed of immediate service required. Ask around your
location for the best insurer with high number of in-network garages, to make the
right choice.
NCB or No Claim Bonus is an additional discount you get on premiums, if you have
not raised a claim for the duration of a year. You are eligible for 5% to 10% of the
IDV as bonus on renewing of policies, in such a scenario. This bonus is up to 50% at
the maximum.
Other Facilities
Choose a car policy from a provider who gives a cashless option. During emergencies
it saves you from the hassles of having to run around arranging cash. Take into
account the time taken to issue the policy. Look for customer service and helpline and
check if the service is active. In dire situations, you will require the insurer to help
you instantly. Thus, quick availability of the provider on communication channels is
an important factor to keep in mind when choosing a provider.
To Conclude:
Out of the several things to consider when buying car insurance, we have mentioned
the ones that you should really not avoid. It is always better to take a comprehensive
cover along with the mandatory third-party liability policy, so stay better protected.
To reduce risks, you can even include a few optional covers such as that for personal
accident.
82
CONCLUSION
During recent years in India there is a boom in the automobile sector with high growth
rate and multinational companies are also findings huge business in the automobile
sector in our country. But as an adverse effect, the motor traffic increases in our roads
and the number of motor accidents are also increasing. So, the need and desirability of
the motor vehicle insurance has increased many times. Motor vehicle insurance is
obligatory for all types of vehicles new or old, used for commercial or for personal
purposes.
In India motor vehicle insurance policy is necessary for all motor vehicle owners as it
shields them from legal liabilities that might occur during their vehicle maneuver. In
our country motor vehicle insurance governed and works under the preview of Motor
Vehicle Act 1988.
For the purpose of the research three objectives were framed and efforts are made to
fulfill the objectives. First objective was achieved by studying the problems of motor
insurance in India from customers and company side separately. Second objective was
to measure the satisfaction level of motor insurance customers this was achieved by
analyzing the satisfaction level on 5 Likert scale on ten parameters and in that it was
found that satisfaction level of public sector company customers were more as
compared to private sector company customers, and the last objective was achieved
by suggesting measures for improvements and identify prospects for the companies.
On the basis of the analysis it is concluded that to enhance the performance regarding
motor insurance products, the companies should make them (policyholders) aware
about benefits of motor insurance Private sector should attain trust of policyholders
and improve their image in the minds of policyholders by giving benefits with
reasonable premium rates. IRDA should also formulate promotional strategies and
modified regulations in order to motivate these companies for increasing penetration
motor insurance.
To reap the full benefits of the enlarging potential of motor insurance portfolio, the
insurers have to tread new areas. Today customers are well equipped with
information, so insurance company should reposition different products by changing
customer attitudes.
There have to be bold initiative by the industry to meet the new needs of the motor
83
insurance market and convert the opportunities to its advantages. The future prospects
of motor insurance is very bright due to continuous increasing demand of motor
insurance, its portfolio is increasing day by day and various opportunities are there in
motor insurance. To be successful, a company must have quality people, innovative
management, right products and proper distribution channels.
The present research ―A Study of Problems and Prospects of Motor Insurance in
India with special reference to Public and Private Sector Companies‖ focused on
various problems of motor insurance and in that researcher made an attempt to analyze
and compare the satisfaction level of policyholders of motor insurance companies on
five likert scale on the basis of ten parameters and try to suggest measures for
improvement. The future study can be conducted on marketing strategies of Indian
motor insurance industry with special reference to rural area and further it can be
conducted on comparative study of Indian motor insurance industry with foreign
motor insurance industry. The growth of motor insurance is increasing rapidly,
various opportunities are available and future of motor insurance is bright.
84
BIBLOGRAPHY
1. The Chartered Institute of bankers (London), "Insurance" 3" Edition bankers
book limited 1996 New Delhi. Book no: - 16481 (MA)
2. Swami Saran Sharma "Essential Insurance Guide for SMEs" Business World
Publications New Delhi 2007
3. Mr. H. Narayanan, "Indian Insurance a Profile - Past and Present of Indian
Insurance Industry with focus on Global Changes, JAICO Publishing House
Mumbai 2010
4. Gnanasundaram Krishnamurthy "Vehicle Insurance '' New Horizon Media
Private Ltd Oxygen of negligence. liability of insurance companies.
5. DheerajRazdan "Insurance Principles, Application and Practices" Cyber Tech
Publication New Delhi 2008, Book no; - 20257 (NIA)
6. M. N. Mishra "Insurance Principles and Practices” S. Chand / Company Ltd.
Nen Delhi 2005, Book no;- 18496 (MA)
7. B.S. Bodla, IVl C Garg "Insurance Fundamentals Environment and Procedures"
Deep / Deep Publications Pvt. Ltd. Nov Delhi. 2003, Book no;- 16993 (NIA)
8. Janak Raj JAl "Motor Accidents Claims and Procedures" Universal Law
Publishing Co Ltd New Delhi 2007, Book No;- 19736 (NIA)
9. V.B. Kolhatkar, V.A. Pai "Motor Insurance" Insurance Institute of India
Mumbai 1999, Book no;- 1640 (NIA)
10. R.K. Gantra, "Motor Insurance '' 2010 l.C. Insurance Institute of India
Mumbai 2010, Book no;- 22361 (NIA)
11. Mr. Kluwer "HandBook of Insurance" Hand book (Compiled folder), Book
no;6988 (NIA)
12. Sarkar "Motor Accidents, Insurance Claims and Compensation" 4"' Edition
Sodhi Publications New Delhi - Allahabad 2009
13. Sajid Ali, RaizMahamniod, Masharioue Ahmed "Insurance in India Regal
Publication New Delhi 2007, Book No;- 19538 (NIA)
14. The Institute of Chartered Accountants of India, "Motor Third Party Claim
Management" First Edition New Delhi 2009, Book no; - 20903 (NIA)
15. Confederation of Indian Industry Ernst & Young "Indian Insurance Sector-
Stepping into next Decade of Growth" Date - 1.9.2010
16. Report by United India Insurance CO. Ltd - "Private Car Package Policy ''
Date- 1.1.2002
17. Annual Report by Bajaj Allianz General Insurance Company Report
lO"'Year2009-10
18. Annual Report; Bajaj Allianz General Insurance Co. Ltd Report 11"' (Policy
Booklet) Date - 31.10.2011 Report on Baja)
19. Insurance Regulatory Development Authority l" Annual Report 2000-01,
IRDA Report Part - I, Date - 01.01.2002 Source; - www.irda.gov.in Report is
of any kind presented by IRDA.
20. Insurance Regulatory Development Authority 2"' Annual Report Year-2001 -
02, Source; - www.irda.goA.in Report was given by Insurance Regulator)
Development Authority (IRDA) it's the annual report of the year 2001 - 2002
(2nd Annual Report).
21. Insurance regulatory Development Authority 11" Annual Report "S ear - 2010
-11, Source; v.irda.gov.in Report b> Insurance Regulatory Development
Authority (IRr3.'\) is the annual report of the year 2010 - 2011 (I l"' Annual
Report).
22. The Indian Express (Express Money Editions) - Amitabh Jain VP Customer
Service Motor ICICI Lombard, "You can save money on that Car Insurance
Policy" Date - 13/2/2012
23. The Economic Times of India - Editors pane! (New Delhi) "India will be 3rd
Lar``iest Light Vehicles Market by 2020'' Date - 14/6/2011
24. The Economic Times of India - Editors Panel "Car sales rise just 7% to 1.58 L
in May, Slowest in Two Years" Date - 10/06/2011
25. The Economic Times - Editors Panel of India "Car sales post slowest Growth
in 27 Months" Date - 12/07/2011 The Economic Times, article on the car sales
of 2011 is mentioned in detail.
26. The Times of India - Editors Panel of India ``Car sales in Positive Zones in
Feb" Date2/3/2012 The Times of India, article on "Car sales in Positive Zones
in Feb 2012"" is the article taken for reference stud)'.
27. The Economic Times of India - Vidyalaxmi & Preeti Kiilkarni "5 Add - ons
Luxury Car Insurance must Have" Date - 7/09/2012 The economic Times,
article on "5 Add onsluxun Car Insurance must Have".
28. The Economic Times of India - Preeti Kulkarni "No Pay a Lower Car
Insurance Premium if you are Married" Date - 16/01/2013 The lu'onoinie
Times,
29. The Economic Times of India - Ketan Thakkar & Bakul Chugan Tongia
"Petrol Vs Diesel Cars: V.cX your Fuel .Math right First'' Date-07/01/2013
30. The Times of India - Udit Prassana Mukerji "Third Party Motor Cover Cost to
Soar'' Date - 19/02/2013 The Times of huha, article on "Third Party Motor
cover cost to soar".