Motor Insurance

Motor Insurance

A motor insurance policy is a mandatory policy issued by an insurance company as part of prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy.

Types of Motor Insurance

The word Motor broadly covers a lot of classes of vehicles plying on the roads. These may be two-wheelers like scooters and motorbikes, three-wheelers or four wheelers like private cars, jeeps, buses, trucks, commercial taxis and other vehicles. There are three types of motor insurance which has been divided in below categories.

Car Insurance

This 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 Insurance

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.

Commercial Vehicle Insurance

This 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.

Why Buy Motor Insurance

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.  Third Party Insurance is a statutory requirement.

The owner of the vehicle is legally liable for any injury or damage to third party life or property caused by or arising out of the use of the vehicle in a public place. Driving a motor vehicle without insurance in a public place is a punishable offence in terms of the Motor Vehicles Act, 1988.

Dos and Don'ts for Motor Insurance

Dos
When you buy a motor insurance policy you should: 

• Know that you can buy this policy through anyone and there is no compulsion to buy it through your vehicle dealer
• Fill the proposal form yourself even if the vehicle dealer is arranging for the insurance
• 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 Licence to the insurance company for verification
• Ensure that you keep these documents updated from the authorities concerned

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 about the actual use of the vehicle you are insuring