INSURANCE WE ALREADY KNOW IS PROTECTION AGAINST ANY ‘UNFORESEEN RISK’ THE ‘UNFORESEEN RISK’ IS AN INCIDENT, WHICH CAN’T BE FORESEEN I.E. WHICH MAY OR MAY NOT HAPPEN ..
Property damage liability:This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.Bodily Injury Liability: This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savingsMedical Payments or Personal Injury Protection (PIP): This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. In some cases, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.
Car Insurance/PRIVATE INSURANCEThis is the fastest growing segment in the insurance sector as car insurance is mandatory while buying a new car. Major car manufacturers are tying up with leading insurance companies to provide quick insurance to its customers. Car insurance covers loss or damage by accident, fire, lightning, riots, earth quake, hurricane, terrorist attacks, explosion, theft, third party’s claims and damages (like liability for third party injury or death, third party property and liability to paid driver). On payment of appropriate additional premium it covers loss or damage to electrical or electronic accessories and other significant items.Two Wheelers InsuranceTwo wheeler insurance is another type of popular auto insurance in India. It is governed by the Indian Motor Tariff. This insurance provides protection against natural and man made calamities like: fire, rockslide, landslide, storm, hurricane, flood, earthquake, burglary, theft, riots or any damage caused to the vehicle in transit by road, air, inland waterway or rail. Two wheeler insurance provides mandatory personal accident cover of Rs. 1 lakh to the insurer. This accident cover can also be opted for passengers. It also protects against legal liabilities arising due to third party’s injury/death or damage caused to its property. Commercial Vehicle InsuranceThis type of insurance covers all those vehicles which are not used for personal purpose. Trucks, buses, heavy commercial vehicles, light commercial vehicles, multi utility vehicles, agricultural vehicles, ambulances etc are covered under this insurance. The premium is calculated on the basis of the make and model of the commercial vehicle, place of registration, year of manufacture, current showroom price and whether the insurer is individual or corporate. Insurance Companies in collaboration with the automobile manufacturing companies chalk out different kind of easy and less complicated plans for safe and easy insurance policy. HSBC India, New India Assurance, United India Insurance, Bajaj Allianz, ICICI Lombard etc are some of the prominent companies in India which provide commercial vehicle insurance.
In law and economics, insurance is a form of riskmanagement primarily used to hedge against the risk of acontingent, uncertain loss. Insurance is defined as theequitable transfer of the risk of a loss, from one entity toanother, in exchange for payment. An insurer is a companyselling the insurance; an insured, or policyholder, is theperson or entity buying the insurance policy. The insurancerate is a factor used to determine the amount to becharged for a certain amount of insurance coverage, calledthe premium. Risk management, the practiceof appraising and controlling risk, has evolved as a discretefield of study and practice.
TYPES OF INSURANCE• Auto insurance• Home insurance• Health insurance• Accident, sickness and unemployment insurance• Casualty• Life
What is it: Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
• Property Damage Liability• Bodily Injury Liability• Medical Payments or Personal Injury Protection (PIP)
Auto Insurance in India deals with the insurance covers for the loss ordamage caused to the automobile or its parts due to natural and man-made calamities. It provides accident cover for individual owners of thevehicle while driving and also for passengers and third party legalliability. There are certain general insurance companies who also offeronline insurance service for the vehicle.Auto Insurance in India is a compulsory requirement for all new vehiclesused whether for commercial or personal use. The insurance companieshave tie-ups with leading automobile manufacturers. They offer theircustomers instant auto quotes. Auto premium is determined by a numberof factors and the amount of premium increases with the rise in the priceof the vehicle. The claims of the Auto Insurance in India can beaccidental, theft claims or third party claims. Certain documents arerequired for claiming Auto Insurance in India, like duly signed claim form,RC copy of the vehicle, Driving license copy, FIR copy, Original estimateand policy copy.
• Private Car Insurance• Two Wheeler Insurance• Commercial Vehicle Insurance
GLOBALLY MOTOR INSURANCE IS THE BIGGEST ANDFASTEST GROWINGGENERAL INSURANCE PORTFOLIO AND INDIA IS NOEXCEPTION TO IT.• IT ACCOUNTS FOR MORE THAN 45% OF THE TOTAL GENERAL INSURANCE PREMIUM INCOME IN INDIA.• IN THE YEAR ENDING 2009, TOTAL NONLIFE PREMIUM OF THE INDUSTRY WAS ABOUT 28,000 CRORES OUT OF WHICH MOTOR SHARE WAS ABOUT 13,000 CRORES,• HOWEVER MOTOR BUSINESS WAS 25 CRORES ONLY AT THE TIME OF NATIONALIZATION
SOME OF THE FACTORS RESPONSIBLE FOR THIS GROWTHARE:• INCREASE IN EARNING CAPACITY OF INDIVIDUAL• CHANGE IN PRIORITIES OF LIFE• EXPLOSIVE GROWTH OF AUTOMOBILE INDUSTRY• NEWER MODELS BEING INTRODUCED IN INDIA AND IN THE WORLD, THE COSTLIER ONES AND THE CHEAPEST VERSIONS AND• INTRODUCTION OF CHEAP AUTO LOANS.
• IN 1951, THERE WERE 3,00,000 MOTOR VEHICLES THROUGHOUT INDIA• THE ROAD NETWORK AT THAT TIME WAS OF 4,00,000 KILOMETERS• BY THE YEAR ENDING 2004, THE NUMBER OF VEHICLES HAS GONE UP BY 270 TIMES, WHERE AS,• ROAD NETWORK HAS EXPANDED BY 11 TIMES ONLY.• IN INDIA THE VEHICLE POPULATION HAS ALREADY CROSSED 8 CRORES COMPRISING OF THE FOLLOWINGS: TWO WHEELERS: 6 CRORES MOTOR CARS : 2 CRORES COMMERCIAL : 2 CRORES AND• ABOUT 90 LAKH MOTOR VEHICLES (ALL TYPES) ARE BEING ADDED ON INDIAN ROADS EVERY YEAR.
• ABOUT 300 PERSONS ARE BEING KILLED ON ROAD ACCIDENTS DAILY AND ABOUT 10,00,00 ARE BEING INJURED ANNUALLY AND• THE INCIDENCE OF ROAD ACCIDENTS TO NUMBER OF VEHICLES IN INDIA IS ALARMINGLY HIGH IN COMPARISON TO DEVELOPED COUNTRIES:• THE NUMBER OF ROAD ACCIDENTS PER 10,000 VEHICLES IN INDIA IS ABOUT 120 AS AGAINST 10 IN THE DEVELOPED COUNTRIES OF THE WORLD• THE NUMBER OF DEATHS PER 10,000 VEHICLES IN INDIA IS 55 AS AGAINST 2 IN THE WEST.• IN 1990, TRAFFIC ACCIDENTS WERE WORLD’S NINTH BIGGEST CAUSE OF DEATH AND IT IS EXPECTED TO BECOME THE THIRD BIGGEST BY 2020.• STUDY UNDERTAKEN BY THE ‘WORLD HEALTH ORGANIZATION’ REVEALS THAT ROAD ACCIDENTS ARE THE SECOND AND THIRD BIGGEST CAUSE OF DEATH IN THE AGE GROUP OF 5-29 AND 30-44 YRS. RESPECTIVELY.• THE INDIAN SITUATION IS AMONGST THE WORST IN THE WORLD I.E. SHARE OF ROAD FATALITIES IS AROUND 86%. AGAINST 40% SHARE OF VEHICLE POPULATION.
• IT IS THEREFORE NATURAL THAT IN A SITUATION LIKE THIS I.E. THE WIDESPREAD USE OF VEHICLE BY THE COMMON MAN• MANY VEHICLE OWNERS AND USERS MAY NOT HAVE THE REQUISITE FINANCIAL CAPABILITIES OF• COMPENSATION TO THE VICTIMS OF THE ROAD ACCIDENT.
• THE MOTOR VEHICLE ACT HAS THEREFORE MADE THE THIRD PARTY INSURANCE COMPULSORY• IT IS A PUNISHABLE OFFENCE TO USE THE VEHICLE WITHOUT INSURANCE• NECESSARY PROVISIONS FOR ITS ENFORCEMENT ARE THEREFORE ARE AVAILABLE WITH THE AUTHORITIES: FAILURE TO COMPLY THE PROVISIONS OF SEC.146 OF THE MV ACT IS PUNISHABLE BY ANIMPRISONMENT OF THREE MONTHS OR A PENALTY OF RS. 1000 OR BOTH (SEC.196 OF THE MV ACT).
• MOTOR INSURANCE IS ONE OF THE MOST IMPORTANT PORTFOLIOS OF INSURANCE INDUSTRY AND• IT IS MANDATORY/COMPULSORY INSURANCE FOR THE VEHICLES PLYING ON THE ROADS• IT IS WORTHWHILE TO KNOW THAT• THE TOLL TAKEN BY ROAD ACCIDENTS IS NO LESS THAN THE TOLL OF A MAJOR NATURAL OR A MAN-MADE CATASTROPHE (LIKE 9/11).• POST WORLD WAR- I: INCREASE IN NUMBER OF VEHICLES AND ROAD ACCIDENTS.• ROAD TRAFFIC ACTS: 1930 & 1934- COMPULSORY THIRD PARTY LIABILITY INSURANCE.• ROAD TRAFFIC ACT 1960: COMPULSORY INSURANCE PROVISIONS OF ABOVE ACTS WAS CONSOLIDATED.
• 1939: MOTOR VEHICLES ACT (MVA) PASSED.• COMPULSORY 3RD PARTY INSURANCE INTRODUCED ON 1ST JULY, 1946.• PRACTICE IN INDIA FOLLOWS THAT OF U.K. MARKET.• MVA 1988, REPLACED THE MVA OF 1939. EFFECTIVE FROM JULY 1ST 1989.• THE MANDATORY PART OF THE MOTOR INSURANCE IS KNOWN AS ‘THIRD PARTY INSURANCE’• THIS INSURANCE WAS FORMED ON THE BASIS OF MOTOR VEHICLE ACT• THE POLICY IS BEING ISSUED IN ACCORDANCE WITH THE PROVISIONS OF THE M. V. ACT, IS NOW CALLED AS THE ‘LIABILITY ONLY POLICY’ & THE COVERAGE’S PROVIDED ARE:….
• DEATH OF OR BODILY INJURY TO ANY PERSON INCLUDING OCCUPANTS (PROVIDED SUCH OCCUPANTS ARE NOT CARRIED FOR HIRE OR REWARD) AS PER MOTOR VEHICLES ACT, 1988.• THE COMPANY SHALL NOT BE LIABLE FOR DEATH OR INJURY ARISES OUT OF AND IN THE COURSE OF THE EMPLOYMENT• DAMAGE TO PROPERTY OTHER THAN PROPERTY BELONGING TO THE INSURED OR HELD IN TRUST/ CUSTODY OR CONTROL OF THE INSURED• ALL COSTS AND EXPENSES INCURRED WITH ITS WRITTEN CONSENT.• ANY DRIVER WHO IS DRIVING THE VEHICLE ON THE INSURED’S ORDER OR WITH INSURED’S PERMISSION• PROVIDED THAT SUCH DRIVER SHALL AS THOUGH HE/ SHE WAS THE INSURED• OBSERVES & FULFILL THE TERMS EXCEPTIONS AND CONDITIONS OF THIS POLICY
• ANY PERSON ENTITLED TO INDEMNITY, THE COMPANY WILL INDEMNIFY SUCH PERSON OR HIS/ HER PERSONAL REPRESENTATIVE PROVIDED• THAT SUCH PERSONAL REPRESENTATIVE SHALL AS THOUGH WAS THE INSURED, OBSERVE FULFILL• THE TERMS EXCEPTIONS AND CONDITIONS OF THIS POLICY.
• THE COMPANY UNDERTAKES TO PAY COMPENSATION AS PER THE FOLLOWING SCALE FOR BODILY INJURY/ DEATH SUSTAINED BY THE OWNER-DRIVER OF THE VEHICLE• IN DIRECT CONNECTION WITH THE VEHICLE INSURED: DRIVING MOUNTING INTO/ DISMOUNTING FROM THE VEHICLE INSURED WHILST TRAVELING IN IT AS A CO-DRIVER CAUSED BY VIOLENT, ACCIDENTAL, EXTERNAL AND VISIBLE MEANS WHICH IS INDEPENDENT OF ANY OTHER CAUSE SHALL WITHIN SIX CALENDAR MONTHS OF SUCH INJURY RESULT IN:
Nature Of Injury Compensation1 Death 100%2 Loss of two limbs or sight of both 100% eyes or one limb & sight of one eye3 Loss of one limb or sight of one eye 50%4 Permanent total disablement 100%
• PROVIDED ALWAYS THAT • COMPENSATION SHALL BE PAYABLE UNDER ONLY ONE OF THE ITEMS (1) TO (4) ABOVE IN RESPECT OF THE: • OWNER-DRIVER ARISING OUT OF ANY ONE OCCURRENCE AND • THE TOTAL LIABILITY OF THE INSURER SHAL NOT IN THE AGGREGATE EXCEED THE SUM OF RS. 2 LACK DURING: • ANY ONE PERIOD OF INSURANCE.• THIS COVER IS SUBJECT TO: • THE OWNER-DRIVER IS THE REGISTERED OWNER OF THE VEHICLE INSURED • THE OWNER-DRIVER IS THE INSURED NAMED IN THIS POLICY • THE OWNER-DRIVER HOLDS AN EFFECTIVE DRIVING LICENSE • IN ACCORDANCE WITH THE PROVISIONS OF RULE 3 OF THE CENTRAL MOTOR VEHICLES RULES 1989, AT THE TIME OF THE ACCIDENT.
• NO COMPENSATION SHALL BE PAYABLE IN RESPECT OF DEATH OR BODILY INJURY DIRECTLY OR INDIRECTLY WHOLLY OR IN PART ARISING OR RESULTING FROM OR TRACEABLE TO: • INTENTIONAL SELF INJURY SUICIDE OR ATTEMPTED SUICIDE PHYSICAL DEFECT OR INFIRMITY OR • AN ACCIDENT HAPPENING WHILST SUCH PERSON IS UNDER THE INFLUENCE OF INTOXICATING LIQUOR OR DRUGS.• SUCH COMPENSATION SHALL BE PAYABLE DIRECTLY TO THE INSURED OR TO THEIR LEGAL REPRESENTATIVES
BONUS AND DISCOUNTSA no claim bonus is given to the policy holder if no claims are made; thisbonus can go up to 50% in some cases provided the policy is renewedwithin 90 days of expiry of the previous policy. This no claim bonus istransferable as it can be used even if one is changing the auto insurancecompany. In addition to the premium which one pays to get the vehicleinsured an extra charge might be levied on a four wheeler owner underspecial circumstances. These are as follows :-•Extra premium is paid on electrical and electronic equipments which dontcome as part of the factory fitting but are bought separately or imported fromabroad.•Vehicles fitted with LPG or CNG kit have to be insured by payment of extrapremium•If the geographical area needs to be extended to other South East Asiancountries like Bangladesh, Nepal, Bhutan, Pakistan, Sri Lanka andMaldives.•Vehicles fitted with a fiber glass fuel tank
Discounts are also available on premium payments under specialcircumstances• When the car is a Vintage one•When No claim bonus has not been utilized•If the owner is a member of a recognized automobile Association•If the vehicle is fitted with ant-theft devices•If the vehicle which is specially modified for the usage of physically challenged people•If the vehicle is used with in insurers premises and sites
CLAIM PROCEDURE• IMMEDIATE NOTICE OF LOSS IN WRITING TO BEGIVEN• FOR ACCIDENTAL LOSSES, ESTIMATE OF REPAIRSAND CLAIM FORM TO BE SUBMITTED• FOR LOSS DUE TO THEFT OF VEHICLE, A COPY OFF.I.R. ALONG WITH A CLAIM FORM TO BE GIVEN• TO APPOINT A SURVEYOR FOR ASSESSMENT OFLOSS/ AN INVESTIGATOR TO INVESTIGATE THETHEFT…..
• ORIGINAL R/C, D/L TO BE PRODUCED• REPAIRS CAN BE STARTED IN CASE OF PARTIAL LOSS, AFTER INITIAL VERIFICATION BY SURVEYOR’S• CLAIMS ARE SUBJECT TO COMPULSORY EXCESSES• IN CASE OF TOTAL LOSS, LIMIT OF LIABILITY WILL BE IDV• ANY DISPUTE REGARDING ‘QUANTUM’ OF CLAIM AMOUNT HAS TO BE REFERRED TO AN ARBITRATOR• TIME LIMIT FOR FILING A SUIT AFTER DISCLAIMER IS 12 MONTHS FROM DATE OF SUCH DISCLAIMER.