Motor Insurance

PLGI
DEPARTMENT OF COMMERCE

A.Iyer.Dept of Commerce/CHRIST University 1

Contents

• Introduction to Motor Insurance

• Types of covers
• Can I take OD from one company and TP from another Company
• How to decide the right sum insurance for your policy ?
• On what basis the premium is decided for a motor vehicle.
• What is a no claim bonus ?
• What should I do immediately after accident ?
• When should I renew my motor vehicle policy ?
• How the claims are settled in motor insurance ?
• What happens when you buy an old vehicle from another person who has an insurance
policy ?

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 Introduction to Motor Insurance
• The Motor Vehicles Act prescribes rules and regulations for licensing, use and insurance of all types of vehicles. It is, ther

Necessary to have some knowledge of Motor Vehicles Act (MV Act) which was originally passed in 1939 and amended in 1988.

• Classification of vehicles:
∙ Private cars
∙ Motor cycles and motor scooters
∙ Commercial vehicles, which are further classified into
>Goods carrying vehicles.
>Passenger carrying vehicles e.g. Motorised rickshaws, Taxis, Buses.
>Miscellaneous Vehicles, e.g.Hearses, Ambulances, Cinema Film
>Recording & Publicity vans,
>Mobile dispensaries etc.

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 Types of covers

Own Damage Third party damage (cover)

Ram Ram
Shyam

1 YEAR 3
YEARS
5
YEARS

Comprehensive Cover :S.I (TWO PARTS –OD &TP)

Can I take OD from one company and TP from another

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of Commerce/CHRIST 4
DON’T ISSUE OD IF NO TP
 https://idv.gicouncil.in/

How to decide the

right sum insured for
your policy ?

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SUM INSURED

7,25,100 RS.
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EXCLUSIONS

• Damages incurred while using the car for illegal purposes.

• Loss or damage as a result of war or nuclear accidents.
• Damages caused to the car while it was driven by a person under the influence of drugs or alcohol.
• Accidents found to be fraudulent by the insurance company.
• Damages caused to the car in an accident while the person driving could not produce a valid license.
• Damages incurred by the car in an accident with an underage driver, or one who drove on the wrong side of the road.
• Cost of car coolants, petrol, nuts, bolts, etc.
• Willful damages caused to the vehicle by the owner.
• Damages caused to the car during a time when the policy had expired and was not renewed.
• Damages to the car and its engine due to oil leakage.

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 On what basis the premium is decided for a
motor vehicle.

• IDV
• CUBIC CAPACITY (CC)
• AGE OF THE VEHICLE

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What is a
no claim
bonus ?

• When the year passes by without a claim, a discount is

given for the next year’s premium. This notional
amount credited to your account is known as no claim
bonus.

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 Damage to your own car

• If you are involved in an accident, and your car has

borne some damages, you can notify the insurer at the
earliest possible time to claim insurance. Most policies
provide you a time frame of 48 hours for intimating the
insurance company of the accident.
• You can get your car towed to a Network Garage (if
included in your insurance cover) or an ordinary garage
for the repair of the vehicle.
• Following an inspection of the vehicle and evaluation
of the estimated charges, the insurer approves the
claim and releases funds for repair work.

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What should I do immediately after accident ?

•DOCUMENTS NEEDED TO FILE CLAIM

• STEPS TO FOLLOW AFTER ACCIDENT
• Call your insurance company immediately after
the accident and inform about the damage.
• Intimate the police about the incident and
obtain an FIR.
• Record the details of the car, the driver, and
the witnesses in the FIR.
• File a claim with your insurance company and
ask them to assign a surveyor to evaluate the
loss.
• You can submit the claim online as well,
provided that your insurer provides this facility.
• Motor Accident Claim Tribunal (MACLT)
•Copy of your insurance policy
•First Information Report (FIR) filed with the
police
•Duly filled up and signed Claim Form
•Copy of the registration certificate of your car
•Copy of your driving license
•A detailed estimate of the repairs
•Medical receipts in case of physical injuries
•Original records of other expenses incurred

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When should I renew my motor vehicle policy ?

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How the claims are settled in motor insurance ?

Own damage claims

• Partial loss
• Total loss
Third Party claims
Depends on repairs of third party and medical expenses, lost salary etc,
depending on the max sum insured. (Liability insurance concepts will be
taught later)
Knock for knock agreement

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What happens when you buy an old vehicle from another person who has an
insurance policy ?

• Need to transfer the insurance to

your name, until then if you take
out and there is a claim, the
insurance company will not pay
claims.

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