3. Motor insurance
ā¢
Insurance : Insurance is the pooling of premium and sharing of losses.
ā¢
Insurer : The party to an insurance
arrangement who under takes
to indemnify for losses.
ā¢
Insured: A person whose interests are protected by an insurance
policy.
ā¢
Premium: Financial cost of obtaining
ā¢ an insurance cover, paid as a lump
ā¢ sum.
ā¢
ā¢
Written contract or certificate
of insurance
Policy:
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4. Motor insurance
Principles of Insurance
ā¢ Utmost Good Faith
ā¢Insurable Interest
ā¢Principle of Indemnity
ā¢Principle of Contribution
ā¢Principle of Subrogation
ā¢Principle of loss Minimization
ā¢Principle of āCAUSA PROXIMAā
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5. Motor insurance
Motor insurance provides mainly two types of
policies :
a. Liability only or Act only or TP policy
b. Package or Comprehensive Policy
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6. Motor insurance
Liability cover :
ā¢ 1a. Third party death or bodily injury.
ā¢ 1b. Third party property damage.
ā¢ 2a.Personal Accident cover to owner/
driver death.
ā¢ 2b.Personal accident cover to owner/
driver injury.
ā¢ 2c. Total compensation not to exceed 1 lac in
two wheelers and 2 lac in case of other vehicles.
(exclusions as per pa policy)
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7. Motor insurance
ā¢
Comprehensive policy includes the below in addition to
liability only policy covers:
a. Fire, Explosion, Self ignition, Lightening.
b. Burglary, housebreaking or
theft.
c. By riot and strike.
d. By Earthquake.
e. By flood, typhoon, hurricane, storm, tempest,
inundation,
cyclone, hail storm, frost.
f. By accidental external means.
g. By malicious act.
h. By terrorist activity.
i. While in transit by road, rail, inland water way, lift,
elevator or air.
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8. Motor insurance
Exclusions :
ā¢ Contractual liability.
ā¢ War perils nuclear perils .
ā¢ Consequential loss, Depreciation ,Wear and tear ,mechanical or electrical
break down.
ā¢ Damage suffered due to driving the vehicle under the influence of
intoxicating liquor or drugs.
ā¢ Claims arising outside the geographical area specified in the policy.
ā¢ Claims arising whilst the vehicle is used in contravention of the limitations as
to use.
ā¢ Claims arising when the vehicle is driven by a person without valid driving
license
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9. Motor insurance
History:
1939
1988
ā¢ First Motor Vehicle Act was passed to make TP
insurance compulsory. MV Act 1939.
ā¢ MV Act of 1988 replaced the 1939 act and came into
force from 1.7.1989.
ā¢ Chapters X, XI, XII of MV act deal with mandatory TP
insurance of Motor Vehicles.
1988 act ā¢ Exemption : Vehicles operated by Central, State Govt &
Local authority for govt. purpose are exempted.
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13. Motor insurance
INDIA MOTOR TARIFF :
ā¢
ā¢
ā¢
ā¢
SECTION 1.
SECTION 2.
SECTION 3.
SECTION 4.
ā¢
ā¢
SECTION 5.
SECTION 6.
ā¢
ā¢
SECTION 7.
SECTION 8.
General Regulations (GR)
Tariff for Private Car
Tariff for Motorised TwoāWheelers
Tariff for Commercial Vehicles
Ā» A. Tariff for Goods Carrying Vehicles
Ā» B. Tariff for Trailers
Ā» C. Tariff for Vehicles used for Carrying Passengers for Hire or
Reward
Ā» D. Tariff for Miscellaneous and Special Type of Vehicles
Ā» E. Tariff for Motor Trade - Road Transit Risks
Ā» F. Tariff for Motor Trade - Road Risks
Ā» G. Tariff for Motor Trade - Internal Risks
Proposal Forms
Standard Wordings in respect of Policy including Premium
Computation Table and Certificate of Insurance Cover Note
India Motor Tariff (IMT) Endorsements
Statistical Codes
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14. Motor insurance
Important General Regulations (GR):
ā¢ GR 2: Proposal forms are required
ā¢ to be submitted.
ā¢ GR 3: Policy is to be issued only as
ā¢ per standard fomat.
ā¢ GR 4: Extension of Geographical Area: Policy can be extended to
include Bangladesh, Burma, Nepal, Pakistan, Srilanka, Maldives by
charging extra premium.
ā¢ GR 5:Vintage Cars :Cars manufactured before 31.12.1940 are
termed as Vintage cars.
ā¢ GR 6: Classic cars: Cars manufactured after31.12. 1940 but before
31.12.1970 are termed as classic cars.
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15. Motor insurance
Important General Regulations (GR):
ā¢ GR 7: Agreed value policies for Vintage Cars.
ā¢ GR 8:IDV :Insuredās declared value will be the sum insured for the vehicle. Is
applicable for Total Loss and Constructive total Loss.
ā¢ GR 9: Depreciation to be applied on parts.
ā¢ GR 10 : Geographical Zones: For the purpose of rating the country has been
divided into Geographical Zones.
ā¢ GR 16: Stipulates the minimum premium.
ā¢ GR 17 :Transfer of Policy. On transfer of ownership Liability cover is deemed
to be transferred automatically. For OD cover an application to be given
within 14 days from the date of tfr. Endt. To be passed and Rs.50/- to be
charged.
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16. Motor insurance
Important General Regulations (GR):
ā¢ GR 19,20,21:Hire purchase agreement, Lease agreement,
Hypothecation agreement. Vehicle to be in the name of
regd. Owner and necessary endt. attached.
ā¢ GR 22 : Covernote. To be as specified.
ā¢ GR 23 : Certificate of Insurance. To be as specified.
ā¢ GR 24 : Cancellation of insurance and double insurance.
ā¢ GR 27 : No Claim Bonus : NCB allowed upto 90 days.
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17. Motor insurance
Important General Regulations (GR):
ā¢ GR 27 : contd..
_ Ncb follows the insured not the vehicle.
_To claim ncb policy has to run for 12 months.
_Ncb can be given only at the time of renewal.
_Ncb is calculated only on OD premium.
_If the renewal is from other insurer ncb can be allowed to
insured basing on a declaration from him saying that he has
not made any claims and is eligible for ncb. Present insurer
has to write to the previous insurer and obtain confirmation
of ncb.
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18. Motor insurance
Important General Regulations (GR):
ā¢ GR 36 :
ā¢ a. Compulsory Personal Accident cover for owner-driver. In
case of two wheeler Rs.1 lac for other vehicles Rs.2 lacs. He
must have an effective driving license.
ā¢ b. Optional PA cover for persons other than owner-driver.
ā¢ GR 39 :TPPD cover. The statutory limit is Rs.6000/- as provided
in MV Act. However option available to opt for higher limits of
Rs.1 lac for two wheelers and Rs.7.50 lacs for other vehicles.
ā¢ GR 40 :Compulsory deductibles : It is the amount deducted
from own damage claim. The amount to be deducted
depends upon the class of vehicle.
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19. Motor insurance
OWN DAMAGE CLAIMS :
ā¢ Insured should contact the policy issuing Office.
ā¢ If the damages are of major nature and if there are tp
injuries/death, intimation should be given to police
authorities.
ā¢ Office may arrange for a spot survey if the damages are of
major nature. Then the vehicle may be shifted to a garage
for repairs.
ā¢ Estimation of repairs, claim form, policy details and vehicle
records are to be submitted to Office for appointment of
final surveyor.
ā¢ Final surveyor appointed as per
finanancial authority (BO,DO,RO,HO).
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20. Motor insurance
OWN DAMAGE CLAIMS (contd):
ā¢ Final surveyor visits the garage discusses with repairer,
owner of the vehicle and prepares assessment.
ā¢ Assessment of surveyor is a recommendation of claim
amount.
ā¢ The assessment can be on repair basis, Total Loss or
Constructive total loss.
ā¢ Bills are given by insured then the payment is made
either to insured or garage.
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24. Motor insurance
TERMS USED :
ā¢ TP
ā¢ OD
ā¢ TPPD
ā¢ TPD
ā¢ TPI
ā¢ MV ACT
ā¢ PCV
ā¢ GCV
ā¢ NCB
ā¢ IDV
ā¢ DEDUCTIBLES
: THIRD PARTY
: OWN DAMAGE
:THIRD PARTY PROPERTY DAMAGE
: THIRD PARTY DEATH
:THIRD PARTY INJURY
: MOTOR VEHICLE ACT
: PASSENGER CARRYING VEHICLE
: GOODS CARRYING VEHICLE
: NO CLAIM BONUS
: INSUREDāS DECLARED VALUE
:AMOUNTS DEDUCTED FROM CLAIM
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