A Project Report on Study of

AUTOMOBILE INSURANCE IN INDIA

A Project Submitting

To University of Mumbai for partial Completion of

the degree of Bachelor in Commerce

(Banking and Insurance)

Under the Faculty of Commerce

By.

Miss Neha Ravindra Srivastav

Roll no. 1911659

Under the guidance of

Prof. Seema Attarde

Mulund College of Commerce

Sarojini Naidu Road, Mulund (W),

Mumbai: - 400080

March – 2020
 DECLARATION BY LEARNER

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.

Name & sign of the learner

Neha Ravindra Srivastav

Certified by

Prof. Seema Attarde.

 ACKNOWLEDGEMENT

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 express my sincere gratitude towards my project guide Professor

Seema Attarde whose guidance and care made the project successful.

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
Chapters Title Page
No.

Chapter 1. Introduction 1

A) History 7

B) Objectives 14

C) Advantages 15

D) Disadvantages 17

E) Types of Policies 18

F) Public Policies 22

G) Problems 25

Chapter 2. Research 50
Methodology

a) Objectives 50

b) Samplings 51

c) Foundation of Data 52

d) Scope of Study 53

Chapter 3 Review of Literature 54

Chapter 4 Data Analysis, 67

Interpretation &
Presentation

Chapter 5 Findings & Suggestions 79

Chapter 6 Conclusion 81
 Automobile insurance in India

Chapter 1: Introduction

INSURANCE:

Insurance is a contract, represented by a policy, in which an individual or entity receives

financial protection or reimbursement against losses from an insurance company. The company
pools clients' risks to make payments more affordable for the insured.

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

Understanding How Insurance Works

There is a multitude of different types of insurance policies available, and virtually any
individual or business can find an insurance company willing to insure them—for a price. The
most common types of personal insurance policies are auto, health, homeowners, and life. Most
individuals in the United States have at least one of these types of insurance, and car insurance
is required by law.

Businesses require special types of insurance policies that insure against specific types of risks
faced by a particular business. For example, a fast food restaurant needs a policy that covers
damage or injury that occurs as a result of cooking with a deep fryer. An auto dealer is not
subject to this type of risk but does require coverage for damage or injury that could occur during
test drives.

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-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
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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 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.

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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.

• Crime insurance is a form of casualty insurance that covers the policyholder

against losses arising from the criminal acts of third parties. For example, a
company can obtain crime insurance to cover losses arising from theft or
embezzlement.
• Terrorism insurance provides protection against any loss or damage caused by
terrorist activities. In the United States in the wake of 9/11, the Terrorism Risk
Insurance Act 2002 (TRIA) set up a federal program providing a transparent
system of shared public and private compensation for insured losses resulting
from acts of terrorism. The program was extended until the end of 2014 by the
Terrorism Risk Insurance Program Reauthorization Act 2007 (TRIPRA).
• Kidnap and ransom insurance is designed to protect individuals and corporations
operating in high-risk areas around the world against the perils of kidnap,
extortion, wrongful detention and hijacking.
• Political risk insurance is a form of casualty insurance that can be taken out by
businesses with operations in countries in which there is a risk that revolution or
other political conditions could result in a loss.

5. Life Insurance :

Life insurance provides a monetary benefit to a decedent's family or other 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.

Annuities provide a stream of payments and are generally classified as insurance because
they are issued by insurance companies, are regulated as insurance, and require the same
kinds of actuarial and investment management expertise that life insurance requires.
Annuities and pensions that pay a benefit for life are sometimes regarded as insurance

3
 against the possibility that a retiree will outlive his or her financial resources. In that
sense, they are the complement of life insurance and, from an underwriting perspective,
are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be taken by the
insured if the policy is surrendered or which may be borrowed against. Some policies,
such as annuities and endowment policies, are financial instruments to accumulate or
liquidate wealth when it is needed.

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 :
4
Meaning :

Motorized vehicle consisting of four wheels and powered by an internal engine. Automobiles
are used to transport people and items from one location to another location. After years
or various designs, inventors were able to develop a functional general
design that is utilized by major automakers as the foundation of their designs. Automobiles
generally use gasoline to fuel the internal engine, but technological advances have led to the
design of cars that run on electricity and even water.

Automobile Insurance in India

Definition:

More popularly known as motor insurance, this type of insurance provides cover for loss or
damage to any vehicle like car, two-wheeler or commercial vehicle, etc.

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
5
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. 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.

A) 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

6
compensation in an accident, and drivers often faced considerable costs for damage to their car
and property.
A compulsory car insurance scheme was first introduced in the United Kingdom with the Road
Traffic Act 1930. This ensured that all vehicle owners and drivers had to be insured for their
liability for injury or death to third parties whilst their vehicle was being used on a public road.
Germany enacted similar legislation in 1939 called the "Act on the Implementation of
Compulsory Insurance for Motor Vehicle Owners." The Indian general insurance sector is
growing at a healthy 17% a year. Motor insurance is the biggest chunk, accounting for 49% of
the gross direct premiums earned (FY16), at $6.5 billion. The Motor Vehicles Act, from 1988,
mandates that every vehicle should be compulsorily insured for third-party risks. With the
expected growth in automobile sales (6% CAGR in the past 5 years), motor insurance sales are
also expected to grow. These numbers are set to rise owing to the changing consumer profile, as
well.
The legal mandate demanding the purchase of a third-party liability insurance policy compelled
Indians to opt for motor insurance. It was a box that was needed to be ticked off, nothing more.
However, the mandate did acquaint people with the philosophy of motor insurance. They started
looking at the financial benefits 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.

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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.

Breaking Down Auto Insurance

Auto insurance premiums vary depending on age, gender, years of driving experience, accident
and moving violation history, and other factors. Most states mandate that all vehicle owners
purchase a minimum amount of auto insurance, but many people purchase additional insurance
8
to protect themselves further. Poor driving record or the desire for complete coverage will lead
to higher premiums. However, you can reduce your premiums by agreeing to take on more risk,
which means increasing your deductible.
In exchange for paying a premium, the insurance company agrees to pay your losses as outlined
in your policy. Coverages include:

• Property – damage to or theft of your car

• Liability – legal responsibility to others for bodily injury or property damage

• Medical – costs of treating injuries, rehabilitation and sometimes lost wages and funeral
expenses

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:

• Bodily injury liability – covers costs associated with injuries or death that you or another
driver causes while driving your car.
• Property damage liability – reimburses others for damage that you or another driver
operating your car causes to another vehicle or other property.

Many states also require:

• Medical payments or personal injury protection (PIP) – Provides reimbursement for

medical expenses for injuries to you or your passengers. It will also cover lost wages and
other related expenses.
• Uninsured motorist coverage – Reimburses you when an accident is caused by a driver
who does not have auto insurance.
• Mandatory Third Party Insurance

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.

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Motor insurance coverage

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.

• Basis of Sum Insured

The Insured’s 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.

• Insured’s Declared Value (IDV)

The IDV of the vehicle is generally fixed on the basis of manufacturer’s listed selling
price of the brand and model at the commencement of insurance /renewal and is also
adjusted for depreciation as prescribed in the IRDA 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.

• Type of Motor Insurance

Motor Insurance includes Private Cars, Motorized Two Wheelers and Commercial
Vehicles excluding vehicles running on rails. Motor insurance gives protection to the
vehicle owner against (i). damages to his/her vehicle and (ii). pays for any Third Party
Liability determined as per law against the owner of the vehicle.

• Period of Motor Insurance Policy

A motor policy is usually valid for a period of one year and has to be renewed before the
due date. Unless specifically stated otherwise, premiums quoted in the Schedules under
various Sections of the India Motor Tariff are the premiums payable on policies issued
or renewed for a period of twelve months.

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• Cover Notes

Cover Notes insuring Motor Vehicles are to be issued only in Form 52 in terms of Rule
142 Sub-Rule (1) of the Central Motor Vehicles Rules 1989. In terms of Rule 142,
SubRule (2) of Central Motor Vehicles Rules 1989, a Cover Note shall be valid for a
period of sixty days from the date of its issue and the insurer shall issue a policy of
insurance before the date of expiry of the Cover Note.

• Determining the rate of premium

For the purpose of applying premium rate, the place where the vehicle is registered is
reckoned (not the place where the vehicle is used).Factors that determine the premium
amount: Make and Model of the Vehicle, Year of Manufacture, Place of Registration,
Current Showroom price of the vehicle,
Whether Client is Individual or Corporate, Cubic capacity, Geographical zone, IDV,
Add on Covers.

• 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.

• 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.

• 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%.

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Claims and wrong claims

A claim under a motor insurance policy could be for personal injury or property damagerelated
to someone else (i.e. a third party in this context) or for damage to your own, insured, vehicle
(i.e an own damage claim) under a package or a comprehensive policy.

In case of accidental damage to the vehicle, in case of theft of the vehicle, in case of liability
claim, one needs to follow the prescribed claim procedure. Hence as soon as one receives the
policy document, read about the procedures and documentation requirements for An insured
may not deliberately bring about a loss but once a loss occurs, he would attempt to demand
unreasonably high amount of compensation, in total disregard of the principle of indemnity.
Such claims may be called as wrong claims.

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.

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Dos and Don'ts for Motor Insurance

• 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.

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B) Objectives:

1. To create awareness of the availability of automobile insurance.

2. To explain how it is easy to get an automobile insurance.

3. To complete the project as a curriculum activity.

4. To reveal the importance of automobile insurance.

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C) Advantage of Automobile Insurance:

Car Insurance Benefits

Why to Buy Car Insurance?

The answer is simple. Car Insurance is mandatory by law. Driving around without valid car
insurance is illegal in India. In case of death or bodily injury to a third party or any damage to
its car, the car insurance policy provides compensation of up to Rs 1 lakh. Such type of vehicle
insurance is known as the third party insurance and it protects not only you but also other people
or family members who may be riding / driving you car.

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:

• Provides benefits to survivors when an accident results in death.

• It covers lawsuits, including legal fees brought against you as the result of an accident.
• Covers the bills of vehicle repairs due to damage caused in an accident.

• Covers damage caused by other than an accident for example, theft, fire, etc.

• Additional discounts: Car insurance policies allow premium discounts for theft or for
owning more than one policy with the same insurer. It also provides added advantage to
extend coverage to others driving your car with your permission.
• No Claim Bonus: If you do not make a claim during the policy period, a No Claim Bonus
is offered on renewals provided you fulfill certain terms and conditions.
• Due to huge traffic complications, car accidents are often in India. As per national crime
records bureau, there are 4,96,000 traffic accidents in 2015. These statistics reveal that
how we are prone to accidents. Accidental claims are costly to bear by individual solely,

the best way to avoid a car and personal damage expenses are to get car insurance policy.
An insurance policy is also helpful to claim for medical expenses too.

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Below are the financial advantages of having a car insurance policy online

• Assured for financial liability

Are you sound to pay for huge accidental damages? If the answer is no, then choosing
the best car insurance policy is the right option to get rid of huge colossal damage costs

• Assured of repairs and replacement

Car insurance authority analyses the severity of damage and concludes whether to repair
or replace the spare parts. Car insurance policy saves your vehicle for these denoted car
damages. This rainy season might cause more damage to your vehicle due to bumpy and
patchy roads. This damaged road impacts the mechanical parts of your vehicle.

• Legal Requirement

Car owner needs a liability assurance for their new owned car, having a right insurance
policy protects you from legal clause.

• Assured for medical claims

In case of severe damage to driver or passenger, an individual cannot bear the heavy
medical expenses. Having an insurance policy assures the medical expenses are covered
to support financial expenses.

• Protects driver and passenger liability

If there is any damage to driver and passengers in case of accidents, your insurance
policy covers the damage expenses.Now you can drive on roads without any stress due
to perks involved in the car insurance policy. Never be too reckless driving in back-up
with an insurance policy, there are numerous advantages of car insurance premium.
Know how insurance helps you from unforeseen damages.

D) Disadvantage of Automobile Insurance:

16
 • 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.

• Opt for cashless claim settlement for hassle-free claim settlement.

• 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.

E) 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
17
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.

How To Choose The Right Motor Insurance Coverage?

Motor insurance plans are classified into different categories based on the extent of coverage
offered and the type of vehicle for which the insurance is sought.Amount of insurance coverage
- Motor insurance plans can be divided into three types based on the amount of insurance
protection offered:

Third-party liability insurance –

This is the most basic form of car insurance and hence, it is also the cheapest. This insurance
scheme is also referred to as liability-only insurance or act-only plan. The Motor Vehicles Act,
1988, mandates that all car owners are in possession of this insurance policy for the protection
of their vehicles. In case you drive a car without a minimum of third-party liability insurance
cover, you are liable to face penalties. The coverage offered by this insurance plan includes
protection to a third party for incidents such as injuries/death and property damage caused in an
accident involving the insured vehicle. It should be noted that the third-party liability insurance
cover does not offer own-damage cover, i.e., coverage for the insured vehicle or the ownerdriver.
Some insurance companies offer a personal accident cover for the ownerdriver along with the
third-party liability insurance plan. Although there is no upper limit on the amount a third party
can receive as compensation for death/disabilities, there is a cap of Rs.7.5 lakh on the maximum
amount offered for third-party property damages. However, the final claim amount is decided
by the court.

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:
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 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.
• Theft of the insured vehicle

Additionally, the comprehensive motor insurance plan offers personal accident cover to the
owner-driver.

2. Third-party liability cover - This part of the comprehensive motor insurance policy
protects the policyholder from legal liabilities to a third party from accidental
injuries/death or property damage. The maximum amount of coverage under this
insurance for injuries/death is unlimited. However, there is a cap of Rs.7.5 lakh on
coverage for third-party property damage. The final claim payout for property damage is
decided by the court.

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.

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 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.
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.

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In conclusion, motor insurance in India can be of several types. It is up to you to understand
your unique insurance needs and decide on a policy that suits you best. It is also advisable to
buy motor insurance online for the security and convenience that it offers.

F) 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
21
 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.

C 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 – 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 Advisory Committee at the beginning of
a policy period.

Commercial Vehicle Insurance – Commercial Vehicle Insurance in India provides cover for
all the vehicles which are not used for personal purposes like trucks and HMVs. The amount of
premium depends on the showroom price of the vehicle at the commencement of the insurance
period, make of the vehicle and the place of registration of the vehicle. The auto insurance
generally includes:
22
 • 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:

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

breakage
2. When vehicle is used outside the geographical area

3. War or nuclear perils and drunken driving

Third-party Insurance Edit

This cover is mandatory in India under the Motor Vehicles Act, 1988. This cover cannot be used
for personal damages. This is offered at low premiums and allows for third party claims under
“no fault liability. The premium is calculated through the rates provided by the Tariff Advisory
Committee. This is branch of the IRDA (Insurance Regulatory and Development Authority of
India). It covers bodily injury/accidental death and property damage

Auto repair insurance is an extension of car insurance available in all 50 of the United States
that covers the natural wear and tear on a vehicle, independent of damages related to a car
accident

Some drivers opt to buy the insurance as a means of protection against costly breakdowns
unrelated to an accident. In contrast to more 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.

23
In several countries insurance companies offer direct repair programs (DRP) so that their
customers have easy access to a recommended car body repair shop. Some also offer one-stop
shopping where a damaged car can get dropped off and an adjuster handles the claim, the car is
fixed and often a replacement rental car is provided. When repairing the vehicle the car body
repair shop is obliged to follow the instructions regarding the choice of original equipment
manufacturer (OEM), original equipment supplier parts (OES), Matching Quality spare parts
(MQ) and generic replacement parts. Both DRPs and non OEM parts help to keep costs down
and keep insurance prices competitive. AIRC (International Car body repair Association)
General Secretary Karel Bukholczer made clear that DRP's have had big impact on car body
repair shops.

G) Problems of Automobile Insurance in India :-

24
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.

2. Invalid motor insurance-

The another challenge that motor insurance sector facing is invalid motor insurance.
Several vehicles that ply on Indian roads do not Carry a valid insurance (reasonable
estimates put it anywhere around 40 % ofthem) is one that needs to be taken seriously
and tackled at the right places. This alone could be a major factor for the Motor portfolio
to bleed year after year.Changing customer needs and preferences- In this scenario
nonlife insurance companies are witnessing changing customer needs and preferences in
motor insurance policies, which is their largest business segment. Now customers no
longer want plain vanilla insurance policies that just cover their car, truck or twowheeler,
but are increasingly asking for service based insurance coverage and insurance
companies are lacking in fullfilling this requirement.

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.

4. Limited data for pricing-

The other challenge faced by insurers is that there is not enough data to help them in
pricing a risk. According to a report published in 2012 by the Road 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.

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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.

7. Immature surveyors and loss assessors-

Motor accident claims are the most common amongst different types of claims,
arriving out of various policies; but unfortunately, they are being handled by immature
surveyors and loss assessors. These motor claims are receiving the least attention of the
industry, and as a result everybody is facing a lot of problems while processing such
claims. Probably, it is the only subject, out of many branches of the general insurance
industry which does not have any guideline whatsoever.

8. Lack of basic technical knowledge-

Most of the staff members processing the claims and scrutinizing the survey report
do not have any basic technical knowledge on the structure of vehicles, in the absence
of which they blindly believe whatever is stated in the survey report.

26
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

10. Low profitability-

Another challenge is low profitability in the motor insurance segment.

Factors which were responsible for low profitability were-

• Cash flow undertwriting,

• Lack of control on underwriters high acquisition cost and soaring management

• expenses,

• Growing automobiles theft due to high repair and replacement schedule

• lenient attitudes of the court towards insured

• Fraudulent claims

• Inadequate database to enable actuarial calculations for risk assessment and

rating of different groups of vehicles,
• No scientific rating (rates are not based on risk exposure).

11. Unethical Practice-

In India it was seen that sometimes motor insurance policyholders adopting

fraudulent practices by making fake accidents claims for earning profit out of it, which
is illegal in Indian Law and that is the major problem of Indian motor industry.

12. Excessive Dependence on surveyors-

Another problem under motor insurance industry is too much of dependence on

independent surveyors. The reason behind is lack of technical knowledge of the staff.

13. Independent assessor-

In Indian motor insurance industry an independent assessor charges higher amount

of remuneration for their service which is a costlier affair for the company and a problem
for the motor insurance industry. Because their expenses are more as compared to
premium collection.Improper time management-In most of the cases the assessor reach

27
 the place of accident too late to asses the quantum of damages and sometimes they do
not reach the places of accident in remote area.

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.

15. Change in psychology of the operators-

The tendency of the insureds is to obtain the maximum benefit when a claim
occurs.They try to cover up various kinds of losses they suffer when an accident occurs.
The motor policies indemnifies against loss or damage suffered on account of accidents
caused by stated contingencies: but the amount payable as claim is circumscribed by
limitations, exclusions and policy conditions.

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.

17. Breach of Utmost good faith-

The doctrine of utmost good faith imposes a legal obligation on the proposer to
disclose all material facts in the proposal form; the material vehicular details- type, year
of manufacture,make, engine number and capacity,chassis number theft proneness of
vehicle,etc.; the geographical area of use; the driving history like driver‘s age,
qualification, physical conditions, traffic conviction, past loss experience, etc. In many
cases policyholders breach this principle by misrepresents / suppresses facts in that case
the insurer may be placed under an unfavorable position where approriate rates may not
be applied.
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Problems Related To Motor Insurance Customers

1. Terms and conditions-

In many cases policyholders are not very clear or do not have proper information
about their motor insurance policy terms and conditions. The reason behind it was
complicated / confused policy wordings, especially to the policyholders belonging to the
rural area due to illeteracy, unfamiliar with english language etc.

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. 3. High premium charges-

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.

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Coverage Level:

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

• The insured party (medical payments)

• Property damage caused by the insured

• The insured vehicle (physical damage)

• Third parties (car and people, property damage and bodily injury)

• Third party, fire and theft

• 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)

• The cost to rent a vehicle if yours is damaged.

• The cost to tow your vehicle to a repair facility.

• Accidents involving uninsured motorists.

Different policies specify the circumstances under which each item is covered. For example, a
vehicle can be insured against theft, fire damage, or accident damage independently.

If a vehicle is declared a total loss and the vehicle's market value is less than the amount that is
still owed to the bank that is financing the vehicle, GAP insurance may cover the difference.
Not all auto insurance policies include GAP insurance. GAP insurance is often offered by the
finance company at time the vehicle is purchased.

30
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.

Why Should You Buy Car Insurance?

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:

• It reduces your liability - Buying third-party motor insurance is lawfully necessitated for
all vehicle owners in India. Third-party liability insurance protects the car owner from
the following incidents:
• It covers him/her against legal liabilities to a third-party in an accident.

• Third-party injuries/death is covered under this insurance plan.

• Damage to third-party property is offered coverage as well.

• This insurance plan, hence, pays for all the damages caused by the at-fault driver in an
accident and saves him/her from legal repercussions of the incident.

• It could pay for your hospitalisation - Some car insurance companies in India offer
personal accident cover for the owner-driver along with the third-party liability
insurance plan. This is a very useful insurance cover as it pays for minor or serious
injuries that the car owner suffers in an accident. If there is a hospitalisation involved,
he/she does not have to pay for the expenses from his/her own pocket. The motor
insurance company will make the necessary payments. In case the car owner succumbs
to injuries, his/her family will be compensated with a substantial amount to help them
financially cope with the tragedy.

• It helps you stay stress-free - In case you are not a confident driver, getting your car
adequately insured will help in reducing the stress of driving. Even for experienced

31
 drivers, car insurance is a necessity as they may get involved in accidents for no fault of
their own.

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:

• Third-party liability cover - This is similar to the coverage offered by a basic third-party
liability standalone policy that has been explained above.
• Own-damage cover - One of the most significant features of a comprehensive car
insurance plan is the own-damage cover that protects the insured vehicle from damages.
The vehicle is protected from accidental damages, natural calamities, man-made
disasters, in-transit damages, etc. Additionally, the owner-driver of the insured vehicle
is offered personal accident cover that protects him/her from accidental injuries or death.
It should be noted that a comprehensive car insurance policy costs less when bought online.
From the insurer’s perspective, the low operating cost for online policy sales is passed on to the
customer in the form of discounts. Moreover, it is easier to renew an online insurance policy
with limited involvement of paperwork.

STORY OF SUCCESSFUL AUTOMOBILE COMPANY IN INDIA

MARUTI SUZUKI
32
“THE LEADERS IN THE AUTOMOBILE INDUSTRY AND CREATING CUSTOMERS
DELIGHT; A PRIDE OF INDIA”

We can describe maruti Suzuki as :

MARUTI SUZUKI. ONCE A LEADER, ALWAYS A LEADER.

The objective of Maruti Udyog limited are :

1. Modernization of Indian automobile industry.

2. Production of fuel efficient vehicles to conserve scares resources.

3. production of large number of motor vehicles, which was necessary for economic
growth.

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 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

33
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.

Why Maruti Suzuki

1. The Quality Advantage

Maruti Suzuki owners experience fewer problem with their vehicles than any other car
manufacturer in India. The customers now choose auto as number one in the premium
compact car segment and the steam in the entry level mid size car segment and Wagner
number one in the premium compact car segment compared to others. The customers are
satisfied with the card design content layout performance.

2. A Buying Experience Like No Other

Maruti Suzuki has a sales network of 307 states of the art showroom across 189 cities, with
the workforce of over 6000 train sales personnel to guide the customers in finding the right
car.

3. Quality service across 1036 cities .

Maruti Suzuki customer have least problems experience with the vehicle services, high
service quality, best in service experience, best service delivery, best service advisory
experience most user friendly service and best in initiation experience. 92% of Maruti
Suzuki owners feel that work gets done right the first time during service. 97% of Maruti
Suzuki owners would probably recommend the same make of vehicle, while 90% owners
would probably repurchase the same make of vehicle.

4. One Stop Shop

At Maruti Suzuki, the customer find all the car related needs made under one roof.
Whether it is easy finance, insurance, fleet management services and exchange.

THE LOW COST MAINTENANCE ADVANTAGE.:

34
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.

Why do you need car insurance?

Having car insurance is a legal requirement and with the right level of cover, provides financial
protection in the event of your vehicle being damaged. It will also provide cover for injuries to
other drivers, passengers or pedestrians, and their property.

Accidents happen, so it’s reassuring to know that you’re covered financially if you’re involved
in one

Why is car insurance necessary?

Having car insurance is essential because it covers your expenses in the event of vehicle damage or
injuries to other drivers, passengers or pedestrians.

All motorists must be insured against their liability to other people, as stipulated in the Road Traffic
Act 1988.

Insurance can also provide financial support if your car is stolen, vandalised or destroyed by fire.

There may be instances in which you don’t need to insure your vehicle, for example, if you have
declared your vehicle off the road through a Statutory Off Road Notification (SORN) from the
DVLA.

What if I’m not insured?

Driving without car insurance is illegal. If you don’t have it, you could be fined or disqualified from
driving.

The maximum fine is unlimited, plus you'll receive six to eight penalty points on your licence.

The Government is currently reviewing penalties for uninsured drivers who kill or are involved in
accidents.

The police also have the power to seize and destroy any vehicle being driven without cover.

Types of car insurance

35
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.

How is the cost of car insurance worked out?

Your premium is based on a number of factors, including your age, where you live, the type of car
you drive, your occupation, where your car is kept, what you use it for and whether you’ve been
convicted of any motoring offences.

You can often lower your premium by paying a higher excess, which is the amount you have to
contribute towards the cost of a claim you make.

Young people in particular face high premiums because of the greater accident risk they carry, and
some may be tempted to cut corners to get a cheap deal.

However, the Insurance Fraud Enforcement Department (IFED) has warned motorists to be on their
guard against ‘ghost brokers’, who sell fake insurance.

They prey on those paying the highest premiums by offering cheap deals online, by the roadside or
in restaurants.

Always make sure your insurer is regulated by the Financial Conduct Authority.

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,

36
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.

How to renew your Car Insurance ?

Almost all insurance providers will send you a notification stating that your policy is about to
auto-renew each year. Even though the notification may tell you to sit back and relax, and that
your policy will be renewed without you having to do anything, you could end up paying too
much for cover that no longer meets your requirements.

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.

When do you get your car insurance renewal?

Typically, your current provider will notify you about three weeks before your policy is about
to run out. The majority of car insurance policies are purchased annually, so you’ll need to think
about updating your insurance every 12 months.

It is then up to you to decide whether to switch provider or stay on for another year. Three weeks
may not seem like a long time to shop around or renew your existing policy, but the renewal
process is fairly quick. One way to do it is to look on comparison websites for quotes on car

37
insurance, however its worth bearing in mind that not all insurers appear on these sites and some
insurers offer more competitive deals if you go direct. Once you’ve successfully applied for a
new policy, you can be insured instantly with just a couple of clicks.

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.

The excess itself can also be protected by a motor excess insurance policy.[citation needed]

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.

38
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.

There are three types of Motor Insurance -

• Private Car Insurance

• Two Wheeler Insurance

• Commercial Car Insurance Policy or Vehicle Insurance

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.

Overview of Top 5 Motor Insurance Companies:

Bajaj Allianz General Insurance Co. Ltd.

Among the private insurance players in Indian insurance domain, Bajaj Allianz is one of the
largest general insurance companies in the country.

A large number of industry experts reveal that Bajaj Allianz Auto Insurance leads all the auto
insurance players in terms of customer satisfaction, cashless claim settlement and features rich
policies. The brand is also widely recognized as one of the most customer friendly insurance
companies in India.

Why it is the best ?

• Doorstep surveyor facility

• 24X7 Towing assistance

• Online purchase on EMIs

39
 • Instant SMS Updates on Claims

• Cashless settlement at 1500+ network garages

Tata AIG General Insurance Co. Ltd.

Tata AIG General Insurance was incepted in 2011. Even being a comparatively younger
company, TATA AIG managed to win over a major fraction of motor insurance market owing
to its robust channels of distribution and hassle-free claims.

Last year, the brand bagged reputed awards for being the best employer and deployment of
mobile application in insurance.

Why it is the best ?

• Free car pick up

• Warranty on repairs

• Cashless settlement at network garages

• Claim settlement in 7 days

• Unique add-ons

The Oriental Insurance Co. Ltd.

Owned by the Central Government, Oriental Insurance Company Limited is one of the best
companies to get a motor insurance. The brand boasts of winning the most reputed awards in
the industry. The latest ones worth mentioning here are - ‘best public general insurance award’
and ‘best bank and financial institution award’. Oriental is one of the few insurance companies
in India to get the iAAA rating by ICRA, indicating its strong financial framework.

Why it is the best ?

• One of the most reliable names in motor insurance

• High claim settlement ratio

• Fast claim settlement Valuable add-ons The New India Assurance Co. Ltd.

New India is wholly owned by the government of India. Backed up by a strong capital,
infrastructure and human resource, auto insurance company in India. The brand has embarked

40
an international presence and is well known for being a pioneer in introducing innovative
insurance products.

It has been rated A- (Excellent) by A.M.Best Co., becoming the only Indian insurance company
to be rated by an international rating agency.

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

HDFC ERGO General Insurance Co. Ltd

Bolstered by a robust channel of distribution and customer oriented approach, HDFC is the top
notch brand for getting a motor insurance. HDFC boasts of having one of the highest car
insurance claim settlement ratios among private motor insurers. HDFC ERGO is ISO 9001:2008
certified for its operations and claim processes and has been rated iAAA by ICRA. It was
recognized as the best general insurance company in India by IAIR in 2013.

Why it is the best ?

• Age and profession discount

• Zero documentation

• Fast claim settlement

• Cashless settlement at 1600+ network garages

ICICI Lombard GIC Ltd.

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
41
cover personal, project and business liabilities. ICICI Lombard Car Insurance covers the
following:

• Loss or damage to your vehicle against natural calamities

• Loss or damage to your vehicle against man-made calamities

• Third Party Legal Liability

• Personal Accident Cover

ICICI Lombard also has a hassle-free claim settlement process.

Bajaj Allianz GIC Ltd.

Bajaj Allianz is a joint venture between Bajaj Finserv Ltd. and Allianz SE. Bajaj Allianz
commenced its operations in 2001 and has their offices located in over 200 cities and towns
across India. The firm caters to the individual insurance needs of consumers. They offer a
number of insurance and have a large customer base in India. They have built technologically
advanced platforms like mobile and digital applications to engage the public. The firm takes
great pride in delivering high value to their consumers. Their car insurance offers a number of
benefits apart from the basic car insurance coverage like:

• 24x7 Roadside Assistance facility

• 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 DriveSmart
Telematics Service
• Zero depreciation cover is offered as one of the rider options

Bajaj Allianz GIC Ltd.

Bajaj Allianz is a joint venture between Bajaj Finserv Ltd. and Allianz SE. Bajaj Allianz
commenced its operations in 2001 and has their offices located in over 200 cities and towns
across India. The firm caters to the individual insurance needs of consumers. They offer a
number of insurance and have a large customer base in India. They have built technologically
advanced platforms like mobile and digital applications to engage the public. The firm takes
great pride in delivering high value to their consumers. Their car insurance offers a number of
benefits apart from the basic car insurance coverage like:

• 24x7 Roadside Assistance facility

42
 • 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 DriveSmart
Telematics Service
• Zero depreciation cover is offered as one of the rider options

The New India Assurance Co. Ltd.

The New India Assurance is a multinational general insurance firm that operates in 28 countries
with its head office in Mumbai. They are one of the oldest general insurance firms in India and
have been operating for more than 40 years. They have a large customer base and operate from
2,452 offices including 1,339 micro offices situated across India. They have 17,702 dedicated
employees serving the public with the best insurance solutions. The company has more than 230
insurance products under its umbrella. The car insurance plans offered by the firm are
straightforward and cover all the general aspects of a motor insurance.

The Oriental Insurance Co. Ltd.

The Oriental Insurance Company commenced their operations in Mumbai in September 1947.
Being one of the pioneers in the insurance sector, the firm has a large customer base. The firm
is run by the Central Government of India. The insurance products offered by this firm cater
to the needs of both rural and urban population. It has its head office in New Delhi with 31
regional offices and more than 1800 micro offices situated across India.

They offer insurance for private cars alone. The private car package offers the general motor
insurance benefits with four unique rider options.

HDFC ERGO General Insurance Co. Ltd

HDFC ERGO is a general insurance firm and a joint venture between ERGO International AG
and HDFC Ltd. The firm offers a wide range of insurance products like home insurance, motor
insurance, travel insurance, etc. that cover both personal and business insurance needs. The firm
has an expanding network with 108 branch offices situated across 91 cities in India. They have
an employee base of 2000 who serve the public with the best insurance schemes and offers.
Besides the employed sales force they have retailers, corporate agents and brokers extending the
firm’s services to the public. They have launched a mobile app that helps in faster
communication, making it easier for the public to reach them.

United India Insurance Co. Ltd.

43
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:

• Car insurance offered is of 2 kinds, package plan, and liability plan

• Hassle-free and easy documentation process

• A number of discounts along with No Claim Bonus are provided

National Insurance Company

A state-owned general insurance company, National insurance Company was established in

1906, and was nationalised in 1972. Headquartered in Kolkata, National Insurance Company
deals with motor insurance, health insurance, personal insurance, rural insurance, etc. Vehicle
owners in the country can choose to buy a third-party liability insurance policy or a
comprehensive car insurance policy from National Insurance Company. Listed below are the
key features and benefits of car insurance policies offered by National Insurance Company:

• 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.

Future General India Insurance

A private general insurer, Future Generals was established in 2007 following a joint venture
between Associations General and Future Group. In 2017, the insurer recorded having more
than 12 lakh customers and since their inception have settled over 1.80 lakh claims. Present in
over 125 locations across the country, Future General has over 6,000 insurance agents and more
than 2,000 corporate clients that they actively service. In FY 2017-2018, the insurer reported
gross written premiums (GWP) amounting to Rs.1,842 crore, a 16% hike in the premiums
44
 collected as compared to FY 2016-2017. In addition, in FY 2017-2018, the company registered
a solvency ratio of 172%. Future Generali India Insurance offers a plethora of insurance products
including car insurance products. Some of the key benefits of availing a car insurance policy
from Future Generali India Insurance are listed as follows:

• Instant claim settlements.

• Round-the-clock customer support and regular policy renewal reminders.

• Claim finalization’s in just 7 days.

• 24/7 Towing assistance following an accident.

• Transfer of No Claim Bonus and premium discounts.

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.
45
Act liability insuranc:

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 unintentionally,
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. These
kinds of insurance contracts are based on indemnity and only cover the damage, and the whole
insurance amount is not given every time.
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.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. 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, 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.

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.

Car Insurance Claim Process - A Step By Step Guide For Claims:-

Motor insurance is compulsory in India. It is one of the most purchased insurance products. This
is because a growing percentage of the Indian population is buying their own vehicles these
days. As a result, motor insurance claims have also gone up. But many a time, the policyholders

46
do not know exactly what they can do to get their car insurance claim. If you too want to know
about the procedures, take a look at the claims processes explained below.

Car insurance claim for damages to your own car

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.

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.

Motor insurance is compulsory in India. It is one of the most purchased insurance products. This is
because a growing percentage of the Indian population is buying their own vehicles these days. As
a result, motor insurance claims have also gone up. But many a time, the policyholders do not know
exactly what they can do to get their car insurance claim. If you too want to know about the
procedures, take a look at the claims processes explained below.

Car insurance claim for damages to your own car

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.

47
 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.

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

Car insurance claim process for a stolen car

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.

48
8. Once all the formalities are completed, the insurance company will disburse the claim.

It is very important to be well informed about the formalities related to making a car insurance
claim. Whether you need to make a small claim due to a minor accident or a major claim due to
the theft of your car, knowing the procedures will make the job a lot simpler for you.

Chapter 2.Research Methodology

The study conducted on vehicle insurance in India on the insurance policies of vehicles like car.
India’s insurance company is the leading company in the field of insurance which provides better
service to the policyholder of the company at the offered able prize. the study describes about
the policyholder’s knowledge regarding about the various ka policies offered by the company.
The General Insurance sector are in transitional face from the regulated market to the open
market due to the opening of industries from private entities. In this market usually there is a
tough competition between existing companies and new insurance companies in the market and

49
in this situation only sexy the strongest company will survive. In general, the insurance company
has minority strategic Macro Environmental Forces
(demographic, economics, technological, political legal, social and cultural) and sustainable
Micro Atmosphere Factors like clients, competition, distributors, user, extra. That affects its
capability to earn profit.

a) Objectives of the study:-

• To understand the policyholder’s awareness towards motor vehicle insurance

policy.
• To identify the preference of motor vehicle insurance by policy holder.
• 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.
• To identify the preference to describe the General Motor insurance business
scenario in India.

b)Sampling: -

Sampling is the process of selecting units (e.g., people, organizations) from population on of
interest so that by studying the sample we may fairly generalize our results back to the
population from which they were chosen. When taking a sample from a larger population, it is
important to consider how the sample will be drawn. To get a representative sample, the sample
must be drawn randomly and encompass the entire population .Sampling is defined as a process
used in statistical analysis in which a predetermined number of observations will be taken from
a larger population. The methodology used o sample from a larger population will depend on
the type of analysis being performed
, but will include simple random sampling, systematic sampling and observational sampling.

50
c)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:-

51
 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

d) 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

52
(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.

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

53
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.

The Literature review on books, reports, and newspaper articles for present study is mentioned
below :-

1. The Chartered Institute of bankers (London), "Insurance" 3" Edition bankers book limited
1996 New Delhi. Book no: - 16481 (MA) The basic understanding of the concept of risk, the
development and the role of insurance industry, various classes of insurance, types of provider
and the legislative environment all within the wider context of financial services is the issues of
the insurance industry is explained in details from the book. The scope and purpose of
insurance. the principles of the insurance contracts are essential terms mentioned. The book
provides coverage of UK and international Insurance Markets and the impact of Globalisation,
harmonisation. and Convergence is also provided, the concept and role of insurance within
financial framework is explained in comprehensive mechanism. The unit team members of the
Chartered Institute of bankers (London), analyses the Basic Insurance concept. Insurance
marketplace. Government Policies. Private Car insurance. and the financial services of U.K in
the insurance business Industry. References are taken from book for further studies on the issue
of insurance risk transfer mechanism.

2. Swami Saran Sharma "Essential Insurance Guide for SMEs" Business World Publications
New Delhi 2007

Book is written by risk expert management author who initiates the reader to the basics of risk
management and its relationship with insurance. The book provides a step by step guide to

54
managing insurance related issues, be it choosing the right insurer, making a claim or renewing
insurance policies. The book also offers a detailed listing of insurance products.

The analysis of small and medium enterprises (SMFs) is more vulnerable to the impact of risks
than large corporations since they neither have professional risk managers nor financial
resources to absorb losses. Study also lack in awareness that insurance plays a pivotal role in
crushing them from a variety of insurable risks. Book was essential to understand the basic
analysis of insurance market for present study.

B. Books (National Books References)

1. 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.

2. Gnanasundaram Krishnamurthy "Vehicle Insurance '' New Horizon Media Private Ltd
Oxygen of negligence. liability of insurance companies. Selection of appropriate multiplier,
etc. the Central Motor Vehicles Rules. 1989 has often been amended for the implementations
of provision of the act. . the updates amendments included to make this compendium as a
good reference book. The basic definition of motor vehicles and the chart on types of

55
 vehicles, which is concerned on the transport vehicles and non - transport vehicles were taken
as reference study.

3. 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.

4. M. N. Mishra "Insurance Principles and Practices” S. Chand / Company Ltd. Nen Delhi
2005, Book no;- 18496 (MA) The book on Insurance Principles and Practices is divided into
five segments as the first segment is on Introduction to the Insurance, second segment is on
Life Insurance, third segment is on Marine insurance, fourth segment is on Iirc Insurance,
and fifth segment is on Miscellaneous Insurance along with the prospects of insurance and
privatisation of insurance industry in India is mentioned in details. The certain parts of
reference from the book; on introduction of the term insurance are reviewed for reference
study.

5. B.S. Bodla, IVl C Garg "Insurance Fundamentals Environment and Procedures" Deep / Deep
Publications Pvt. Ltd. Nov Delhi. 2003, Book no;- 16993 (NIA) The book is an analysis of
Insurance fundamentals, its working environments and procedures. The book is divided into
three major segments of fundamentals, its working environments and its procedures lor the
regular insurance business. The book is a comprehensive analysis of operations in principles
of insurance. Insurance and economic deVelopment. business environment. Growth of
insurance business in India and business environment along with insurance procedures. The
book explains the procedures, documentations of insurance business, settlements of claims.
Life insurance and non life insurance procedures. Certain parts of explanation on the
introduction of insurance as sum of money, premium and compensation are reviewed as the
reference study from this book.

6. 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

56
 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.

7. V.B. Kolhatkar, V.A. Pai "Motor Insurance" Insurance Institute of India Mumbai 1999, Book
no;- 1640 (NIA) Author's book is a detailed analysis about the motor insurance. The history
of Motor Insurance. Introduction about the Motor Insurance in India, legal aspects regarding
the rules and regulations on motor insurance in India.
Motor policies and its impact in India. Motor Tariffs. Documentation process of motor
insurance. Underwriting process of motor insurance in India, and the claim procedures of motor
insurance in India are mentioned in the book. The history of motor insurance, types of motor
vehicles, and the Motor Vehicle Act 1988 (Act no 59 of 1988). The Act is effective from 1st
July 1989 and is taken for reference study.

8. 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.

9. 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.

57
10. U.R. Sarkar "Motor Accidents, Insurance Claims and Compensation" 4"' Edition Sodhi
Publications New Delhi - Allahabad 2009 I'he book is a detailed analysis of Motor Accidents,
insurance Claims and Compensation. The detailed analysis of claim procedure and the
compensation process of insurance procedure have been mentioned. The exhaustive coverage
of supreme court decisions along with cases on torts and negligence where the motor
accidents claims through tribunals rules and forms of applications is given in the book. The
detailed provisions of motor insurance, personal injuries and disability). The review and
revision process of claims tribunal courts is mentioned in the book. The Motor Vehicles Rule
Acts along with cases of certain states is given and the essential aspects of insurance claims
and compensations are extension explained in the book was referred for the present study.

11. Sajid Ali, RaizMahamniod, Masharioue Ahmed "Insurance in India Regal Publication New
Delhi 2007, Book No;- 19538 (NIA)

The book contains the analysis of the insurance sector in India - ,4n overview Economic
Liberalisation and insurance sector reform in India. Development of insurance sector in India.
Risk Management in Insurance. Performance of insurance sector Pre and post Liberalisation in
India. Impact of Economic Liberalisation on the volume of insurance business in India. The
Book was used as references for the present study where the performance of insurance
companies, especially during the insurance liberalisation of India was considered for the
reference study.

12. The Institute of Chartered Accountants of India, "Motor Third Party Claim Management"
First Edition New Delhi 2009, Book no; - 20903 (NIA)

The Book is an analysis on General Principles of' Motor Insurance and Contracts, proposal and
policy forms, claim compensation, jurisdiction official courts, legal provisions, legal aspects of
third-party claims and roles and policies of Motor accidents. References of current Supreme Court
eases, liability of insurers and its third-party claim management was essential factor for studying
the insurance business in Indian market. the basic understanding on motor claim management as
referred for the present study.

C. Reports (International Reports References)

1. Confederation of Indian Industry Ernst & Young "Indian Insurance Sector- Stepping into next
Decade of Growth" Date - 1.9.2010

58
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.

2. 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.

3. 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

4. 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

59
 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.

5. 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.
As the report gives the details about the constitution of IRDA. Historical Background. Agents
and insurers intermediaries, surveyors and loss assessors, professional bodies, control and
monitoring, self-regulatory bodies, headquarters of the authority, policies and programmers,
review^ and working operations of insurance regulatory and development authority. The
statutory function of the authority ensured in section 14 of the Insurance Regulatory and
Development Authority Act 1999, and organisational matters of Insurance Regulatory and
Development Authority. 70 The 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.

6. 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).

The report is on the basic regulations of aggregate insurance business in India. The report is on
the Constitution of the authority, evolving market conditions. regulations, role of professional
bodies, issues penetrating to customer protections, issues pertaining to solvency). reporting
practices, issues pertaining to registrations of new insurers. surveyors and loss assessors. Third
party administrators. Tariff advisory committee. obligations of life and non-life insurers.
International co - operations, role of technology'. Headquarters authority'. The introduction of
Tariff
AdvisoryCommittee and the table for list of existing tariff business control by Tariff Advisory
Committee is taken for the reference study.

7. Indian Motor Tariff (Provision of Indian Motor Tariff) Government of India Date - 30"' June
2002 The report is on the provisions of Indian Motor Tariff controlled by the government of
India. The report consists of tariff business General Regulations (GR). Tariff for Private Car,
Tariff for Motorised Two Wheelers Tariff for Commercial Vehicles. Tariff for Goods

60
 Carrying Vehicles, tariff for Trailers Tariff for Vehicles used for Carrying Passengers for
Hire or Reward. Tariff for Miscellaneous. Special Type of Vehicles tariff for Motor trade.
Road transit Risks Tariff for Motor Trade. Road Risks Tariff for Motor Trade. Internal Risks
Proposal forms Standard Wordings in respect of Police including Premium Computation
Table and Certificate of Insurance. I've a tariff on Note. India Motor Tariff (IMT)
endorsements. Statistical Codes for tariff are mentioned in report. The Indian Motor Tariff
provisions introduction and the regulations for tariff private car were taken for the reference
study.

8. 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 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.

D. Newspapers Articles

1. 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.
61
2. 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 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.

3. 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

62
 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.

4. 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.

5. 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.

6. 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
63
 Lost Key Replacement. Return of Invoice. filing a Claim. Certain parts of the article were
taken for the reference study.

7. 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.

8. 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 was taken for reference study.

9. 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
64
 (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..

10. The Times of India - Editors Panel "Pa\ 20"/) more for Third Party Motor Cover" Date -
29/03/2014 The Times of India, article on "Pay 20% more for Third Party Motor Cover "'
analysis the concept o{ increase in the cost on third party motor insurance rise from b'' April
2014. IRDA has notified the new rates. The increase in premium rates is around 20%) for
small cars and 10% for two wheelers and vehicles carrying goods. The table regarding
increase in premium rates for third party motor covers for private cars was taken as the
reference study.

11.No Claim Bonus in Motor Insurance Policy: Published or updated on 16 November

A No Claim Bonus (NCB) is a pat on the back given by an insurance company to the
policyholder for safe driving - offered by the way of a discount on a car or twowheeler insurance
policy’s premium. Premiums tend to escalate because of everrising inflation, and inflation is
also the reason why even a small discount on premiums is a welcome relief for policyholders.
No Claim Bonus is, therefore, an important part of a motor insurance policy.

However, there are several misconceptions revolving around NCB and its eligibility, particularly
when it comes to selling a vehicle or purchasing a new one.

Summary for Review of Literature

The review of Literature on "The study of Vehicle Insurance in India with special reference to
car insurance in India" shows the author's point of views on the vehicle and car insurance norms
in India. The review on history of insurance, process of insurance, tariffs measures, vehicle acts,
car policies procedures, current scenario of car insurance, and important articles on car insurance
market in India was reviewed critically. Therefore Literature review on books, reports, and
newspaper articles was essential factor for present study.

65
Chapter 4:- Data Analysis, Interpretation & Presentation

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.
66
 GENDER NO. OF RESPONDENTS PERCENTAGE

Male 5 11.1%

Female 40 88.9%

Prefer not to say 0 0

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.

67
EMPLOYEE STATUS NO. OF RESPONDENTS PERCENTAGE

Students 34 75.6%

Business 3 6.67%

Employed 7 15.6%

Housewife 1 2.22%

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.

68
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%

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.

69
YEAR NO. OF RESPONDENTS PERCENTAGE

2019 6 13.6%

2018 7 15.9%

2017 9 20.5%

2016 20 45.5%

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.

70
YEAR NO. OF RESPONDENTS PERCENTAGE

Less then oneyear 6 13.3%

More than one year 19 42.2%

More than three years 15 33.3%

More than five years 5 11.1%

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.

71
NO. OF VEHICELS NO. OF RESPONDENTS PERCENTAGE

1 30 66.7%

2 9 20%

3 6 8.9%

In the above mentioned pie diagram there are 30 respondents of one vehicle as the highest and
6 has lowest respondents of vehicle.

72
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.

73
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.

74
REPAIR NO. OF RESPONDENTS PERCENTAGE

Yes 31 68.9%

No 8 17.8%

Maybe 6 13.3%

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.

75
REASON NO. OF RESPONDENTS PERCENTAGE

Accident 21 54.1%

Mechanical breakdown 16 45.9%

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.

76
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.

77
COMPANY NO. OF RESPONDENTS PERCENTAGE

27 61.4%
Bajaj Allianz
general insurance
co. Ltd

9 20.5%

Tata AIG General

insurance Ltd.

The oriented insurance Ltd 6 13.6%

ICICI prudential 1 2.27%

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

78
limited has an average amount of car insured with and the lowest 6 respondents percent it is of
oriented Insurance Company limited.

Chapter 5: - Findings and suggestions

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% .
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

79
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 and
4.4% 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.

80
Chapter 6: - 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 insurance
market and convert the opportunities to its advantages. The future prospects of motor insurance
81
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.
Scope for future Research

In a dynamic business environment it is vey tough to stand in the competitive market, specially
in insurance industry where there are variety of products and services are available by various
players in the industry and in that motor insurance is one of them, which covers almost more
than forty percent of market share to general insurance. With the growth of industrialization,
rise in the number of motor vehicles on roads and compulsion of Law, the need of motor vehicle
insurance is continuously increasing day by day 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.

82
83