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MOTOR INSURANCEMOTOR INSURANCE


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WHAT IS MOTOR INSURANCE ?WHAT IS MOTOR INSURANCE ?

Motor insurance is a combination of two words

i.e.Motor + Insurance

Insurance is Protection against any Unforeseen risk.The unforeseen risk is an incident, Which cant beforeseen i.e.Which May or may not happen.

Motor insurance is also known as auto insurance, gapinsurance , car insurance, or vehicle insurance.

It purchased for cars, trucks, motorcycles, and otherroad vehicles.


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Conti..Conti..

A) it may result in to either creation of liabilities or

B) will result in to financial losses:

- Injuries/death to person/s and- Damage to property. A

(Liabilities)

- Damage to the vehicle itself and

- Theft of parts or the theft of the B

Vehicle itself.

(Financial losses)


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TYPES OF POLICIESTYPES OF POLICIES

The policy which is mandatory to Be taken in order

to meet the Required of the motor vehicle Act is,

liability only policy, as Explained earlier.

The second policy is the choice of The owner of the

vehicle i.e. He May or may not take this policy, Known

as,package policy.


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INTRODUCTIONINTRODUCTION

Globally motor insurance is the Biggest and fastest

growing General insurance portfolio and India is no

exception to it.

It accounts for more than 45% of the Total generalinsurance 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.


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Conti..Conti..

Some of the factors responsible For this growth

are:

Increase in earning capacity of Individual

Change in priorities of life

Explosive growth of automobile Industry

Newer models being introduced in India and in theworld, the costlier Ones and the cheapest versions and

Introduction of cheap auto loans.


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GROWTHGROWTH

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 asRoad network has expanded by

11 times only.

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GROWTHGROWTH

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 (allTypes) are being added on indian

Roads every year.


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ACCIDENTSACCIDENTS

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 isAlarmingly 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.


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ACCIDENTSACCIDENTS

In 1990, traffic accidents were worlds

Ninth biggest cause of death and it is

Expected to become the third biggest

By 2020.

Study undertaken by the worldHealth 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.


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IMPLICATIONSIMPLICATIONS

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 ofCompensation to the victims of

The road accident.


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REMEDIESREMEDIES

The motor vehicle act has

Therefore made the third party

Insurance compulsory

It a punishable offence to use theVehicle 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 an

Imprisonment of three months or a penalty

Of rs. 1000 or both (sec.196 of the mv act).


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HISTORYHISTORY

Motor insurance is one of the

Most important portfolios of

Insurance industry and

It is mandatory/ compulsoryInsurance 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).


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HISTORYHISTORY

1894: 1st motorcar introduced in

U.K. England.

1895: 1st motor policy only third

Party liabilities introduced.1899: accidental damage to car

Added comprehensive insurance

(Package).

1903: car & general insuranceCorporation ltd. Established

Mainly to transact motor

Insurance, followed by other

Companies.


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HISTORYHISTORY

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: compulsoryInsurance provisions of above

Acts was consolidated.


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HISTORYHISTORY -- INDIAINDIA

1939: motor vehicles act (mva) passed.

Compulsory 3rd party insurance

Introduced on 1st july, 1946.

Practice in india follows that of

U.K. Market.

Governed by a tariff: withdrawn in

Uk.Mva 1988, replaced the mva of 1939.

Effective from july 1st 1989.


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MANDATORY INSURANCEMANDATORY INSURANCE

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 provisionsOf the m. V. Act, is now called as

The liability only policy & the

Coverages provided are:.


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LIABALITIES TO THIRD PARTIESLIABALITIES TO THIRD PARTIES

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 orHeld in trust/ custody or control of

The insured

All costs and expenses incurred with

Its written consent.


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Any driver who is driving the

Vehicle on the insureds order

Or with insureds permission

Provided that such driver

Shall as though he/ she was

The insured

Observes & fulfill the termsExceptions and conditions of

This policy.


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Any person entitled to

Indemnity, the company will

Indemnify such person or his/

Her personal representative

Provided

That such personal

Representative shall as thoughWas the insured, observe fulfill

The terms exceptions and

Conditions of this policy.


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PERSONAL ACCIDENT COVER FORPERSONAL ACCIDENT COVER FOR

OWNEROWNER -- DRIVERDRIVER

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 or whilst:


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PERSONAL ACCIDENT COVER FORPERSONAL ACCIDENT COVER FOR

OWNEROWNER -- DRIVERDRIVER

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 otherCause

Shall within six calendar months of

Such injury result in:


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SCALE OF COMPENSATIONSCALE OF COMPENSATION


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LIMITATIONSLIMITATIONS

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 shall

Not in the aggregate exceed the sum of

Rs. 2 lack during:Any one period of insurance.


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EXCLUSIONSEXCLUSIONS

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 attemptedSuicide 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.


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LIMITATIONSLIMITATIONS

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 vehiclesRules 1989, at the time of the accident.


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LIMITS OF LIABILITIESLIMITS OF LIABILITIES

Under section - ii of the policy:

Death of or bodily injury - such

Amount as is necessary to meet

The requirements of the motor

Vehicles act, 1988.Unlimited.

Under section - ii of the policy:

Damage to third party property:

Rs.6,000 / rs.7, 50,000 as the case may be.

P.A. Cover under section iii:

For owner-driver (csi):

Rs.2,00,000.


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TYPES OF VEHICLESTYPES OF VEHICLES

The indian motor tariff revised w.E.F.

1st july 2002, for the purposes of

Insurance

Has classified the motor vehiclesBroadly into three categories with

Further sub classification viz.

Private cars

Motorized two wheelers andCommercial vehicles.


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CONDITIONSCONDITIONS

Notice shall be given in writing Immediately for any accidental loss or

Damage to the vehicle

Notice shall be given in writing

Immediately of any writ/ summons along

With copy of any prosecution inquest or

Fatal inquiry

No admission, offer, promise, payment

Without the written consent

In case of theft, immediately inform the

Police

No admission, offer, promise, payment,

Shall be made without the written

Consent of the company..


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The insured shall take all

Reasonable steps to safeguard

The vehicle from loss or damage

And to maintain it in efficient

Condition:Company shall have free and full

Access to examine the vehicle or

Any part thereof or

Any driver or employee of theInsured.


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In the event of any accident or

Breakdown, the vehicle shall

Not be left unattended without

Proper precautions:

To prevent further damage or lossIf the vehicle be driven before the

Necessary repairs

Any extension of the damage or

Further damage shall be entirelyAt the insureds own risk.


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The company may cancel the policy

By sending seven days notice & will

Return the premium paid less the pro

Rata portion thereof

The policy may be cancelled by theInsured on seven days notice:

Provided no claim has arisen during

The currency of the policy

Insured shall be entitled to a return

Of premium less premium at theCompanys short period rates..


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Subject to retention of the minimum

Premium of rs. 100

Rs. 25 for vehicles specifically

Designed/ modified for use by blind/

Handicapped/ mentally challenged

Where the ownership of the vehicle

Is transferred, the policy cannot beCancelled unless:

Evidence that the vehicle is insured

Elsewhere is produced.


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CLAIMSCLAIMS

Type of losses:

Total loss (accidental)

When insured vehicle is damaged to the

Extend that repairs is uneconomical to the

Company or cost of retrieval exceeds the idv.

If assessed value of the loss exceeds 75% of idv

(Ctl).

Total loss (theft)

When physical presence of vehicle is not

There i.E.Vehicle is stolen.

Partial loss (accidental)

Repairable loss occurring due to an insured

Peril.

Partial loss (theft)

Theft of parts/ accessories.

Accessories covered only in private cars.


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CLAIM PROCEDURESCLAIM PROCEDURES

Immediate notice of loss in

Writing to be given

For accidental losses, estimate

Of repairs and claim form to beSubmitted

For loss due to theft of vehicle,

A copy of f.I.R. Along with a claim

Form to be given

To appoint a surveyor for

Assessment of loss/ an

Investigator to investigate the

Theft..


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CLAIM PROCEDURESCLAIM PROCEDURES

Original r/c, d/l to be produced

Repairs can be started in case of

Partial loss, after initial verification

By surveyors

Claims are subject to compulsoryExcesses

In case of total loss, limit of

Liability will be idv

Any dispute regarding quantum of

Claim amount has to be referred to anArbitrator

Time limit for filing a suit after

Disclaimer is 12 months from date of

Such disclaimer.


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THANKSTHANKS

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