All You Need to Know about Motor Insurance?

To own a Car for better convenience is one of the big investments of everyone’s life and definitely it costs huge amount of bucks. While owning a Two Wheeler is the first choice of most of the Indians. Its easy-to-drive and easy-to-handle features make it very popular among the teenagers as well. So, the security of the Vehicle is a must-have responsibility and a major concern for every vehicle holder.

According to the Motor Vehicle Act, 1988 “Driving a motor vehicle without insurance in a public place is a punishable offence.”

So the question comes “how to secure own vehicle from any damage or loss?” The answer is Motor Insurance.

What Motor Insurance is:

The term “Motor Insurance” gives protection to the vehicle holder to cover against:

1)    Losses or damages to the owner’s vehicle due to any unfortunate and unforeseen event and

2)    Pays for any TPL (Third Party Liability) considered as per law against the owner of the vehicle.

Types of Motor Insurance:

1)    Comprehensive Policy Plan:

       This policy covers against Third Party Liability, losses, damages to the vehicle and its owner.

2)    Liability only policy Plan:

       This policy covers only against damages occurred from Third Party action.

What Motor Insurance covers:

Comprehensive Motor Insurance policy covers following:

1)    Earthquake

2)    Land/Rock slide

3)    Terrorism Acts

4)    Fire, Detonation, Striking, Self-Ignition

5)    Theft

6)    Malicious Act

7)    Burglary/Housebreaking

8)    Flood, frost, cyclone, hailstorm, tempest, storm, whirlwind

9)    Riot, strike

10)  Accidental external means

11)  While in Transit by Rail/Road, Inland Waterways, Lift, Elevator or Air

On what basis Motor Insurance is calculated?

1)    For Own Damage:

Coverage on Motor Insurance Policy for own damage is calculated on the basis of the concept known as Insured’s Declared Value. The value, which is decided on the basis of the Manufacturer’s present value and depreciation rate based on the age of the vehicle.

2)    For Third Party Damage:

Coverage on Motor Insurance Policy for third-party damage is calculated as per the Motor Vehicle Act 1988. In this cover, Compulsory Personal Accident cover for owner-driver is also included. This coverage policy can also be extended to cover other risks such as Personal Accident to occupants of vehicle, Workmen’s Compensation to Driver etc.

What Motor Insurance excludes:

Following are the terms excluded under the Motor Insurance Policy:

1)    The policy is not considered for those, who are Not Having a Valid Driving License

2)    Breakdowns due to Electrical or Mechanical happening activity

3)    Accident has been done beyond the Geographical limits

4)    Under Drugs/ Alcoholic liquor Influence

5)    Vehicle is used for any illegal purpose

To know more about IRDAI Guideline for Motor Insurance, visit IRDAI website