Insurance
Content
Insurance: Insurance is the pooling of premium and sharing of losses.
Insurer: The party to an insurance arrangement who under takes to indemnify for losses.
Insured: A person whose interests are protected by an insurance policy.
Premium: Financial cost of obtaining an insurance cover, paid as a lump sum.
Policy: Written contract or certificate of insurance
The non-life insurance segments comprises fire, marine, motor, health, and others. The non-life sector
growth has been largely dominated by motor insurance with 45.8% share in FY12.
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 staterequired minimum to protect assets such as your home and savings
Medical 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.
Form “B” : to cover Own Damage Losses and Act Liability. The policy can also be extended to cover
additional liabilities as provided in the Tariff.
Form “B” Policies are for Private Cars, Commercial Vehicles, Motor Cycles/ Scooters, etc.
For private cars and motorcycles, there are two Sections in the comprehensive policy.
Section III is provided for commercial vehicles.
Loss or Damage (or “Own Damage”) to the vehicle. The risks covered are :
Loss or Damage to your vehicle against Natural Calamities
Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm,
tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.
Loss or Damage to your vehicle against Man-made Calamities
Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any
damage in transit by road, rail etc.
Personal Accident Cover
Coverage for the individual driver of the vehicle while travelling, mounting or dismounting
from the car. Optional personal accident covers for co-passengers.
Third Party Legal Liability
Protection against legal liability due to accidental damages resulting in the permanent injury
or death of a person, and damage caused to the surrounding property.
Exclusions
Typically, the motor insurance plan does not provide for:
Normal wear and tear or general ageing of the vehicle
Mechanical/electrical breakdown.
Depreciation, wear and tear of consumables like tubes and tires.
Damages that occur while a person is driving with invalid driving license.
Damage that occur while a person is under the influence of drugs or liquor.
Damage due to a war, civil war, mutiny, or nuclear risk.
Claims arising out of contractual liability.
Use of vehicle other than what it is meant for. For example, if a private car is being used as a taxi
and gets involved in an accident, the owner will not be able to claim damages.
Towing Charges
If the motor car is disabled as a result of damage covered by the policy, the insurers bear a reasonable
cost of protecting the car and removing it to the nearest repairers, as also the reasonable cost of redelivery to the insured. The amount so borne by the insurers is limited to maximum of Rs.2,500/- in
respect of any one accident.
(Note: For motor cycles the limit is Rs.300/-, for cars Rs.1500/ - and for commercial vehicles Rs.2500/-).
Repairs
Ordinarily repairs arising out of damage covered by the policy can be carried out only after they are
authorized by the insurers. However, the insured is allowed to carry out the repairs without authorization
from the insurers, provided that:
the estimated cost of such repair does not exceed Rs-500/- (Rs.150/- for motor cycles).
the insurers are furnished forthwith with a detailed estimate of the cost; and
the insured gives the insurers every assistance to ensure that such repair is necessary and that the
charge is reasonable.
Compulsory Excess
This applies to all vehicles. The insured has to bear a part of the claim amount in respect of each
accident.
Further loss / damage to lamps, tyres, mudguards and / or bonnet side parts, bumpers and / or
paintwork is not payable except in the case of a total loss of vehicle.
Section II Liability to Third Parties
The insurers indemnify the insured against all sums which he may become legally liable to any person
including occupants carried in the motor car (provided that they are not carried for hire or reward) by
reason of death or bodily injuries caused to such third parties or by reason of damage to the property of
third parties caused by or arising out of the use of the motor car. The insured’s liability for damage to
property of third parties is limited to Rs.6000/ -; whilst liability for death of or bodily injury to third party
is unlimited.
Section III: This Appears In Commercial Vehicle Policies Only
This section provides cover while the vehicle is towing one disabled mechanically – propelled vehicle. It
provides that whilst the insured vehicle is being used for the purpose of towing any one disabled
mechanically – propelled vehicle.
The towed vehicle should not be towed for hire or reward
No cover is available under the policy for the damage to the towed vehicle or the property
conveyed thereby.
Rating/ Proposal Form
Rates are based upon the cubic capacity as given by manufacturers, Insured’s Declared Value
(IDV), the Zone of operation and age of the vehicle.
The cubic capacity of the vehicle indicates the power of the engine.
Similarly there are different rates for vehicles in the age groups.
There are two Zones of operation
Zone A : Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, N.Delhi & Pune
Zone B : Rest of India.
Commercial Vehicles
The rating depends upon the Zone of operation, passenger carrying capacity/ gross vehicle
weight, Insured's Declared Value (IDV) and age of the vehicle.
There are three Zones for commercial vehicles.
Zone A:
Chennai, New Delhi, Kolkatta and Mumbai
Zone B: All other state capital
Zone C: Rest of India
Theft Claim
•
If your car has been stolen, the first thing to do will be to file a police report.
•
Notify your insurance company as soon as you file the police report, this will help in case the thief
has caused some damage to others with your car. Also please note, your insurance company will
not process your claim if you have not filed a report with the police.
•
When you notify your insurance company, provide them all the details of loan/lease of your car
along with the FIR.
•
Provide them with a description of your car, mileage, service record if any. Also submit the list of
personal items stolen along with the car.
•
It is also important to inform your RTO of the theft.
•
Inform your financier immediately of the theft and ask them to discuss the case directly with your
insurer this might expedite the claim process.
•
In case the police recover the vehicle, inform your insurer about the same.
•
If the vehicle is recovered, the Insurance company is liable to pay compensation on damages
caused to the vehicle as per the terms and conditions of your policy and for stolen items if any,
which are covered under your policy.
•
If the vehicle is not recovered, the police have to provide a Non-Traceable Certificate (NTC) and the
court will have to give a final report under sec 173 Crpc.
•
If you have taken a car loan to purchase your car, the insurer will settle the amount directly to
the financier. The settlement amount is on the Insured Declared Value (IDV). This might however
differ based on usage and market value.
Insurance: Insurance is the pooling of premium and sharing of losses.
Insurer: The party to an insurance arrangement who under takes to indemnify for losses.
Insured: A person whose interests are protected by an insurance policy.
Premium: Financial cost of obtaining an insurance cover, paid as a lump sum.
Policy: Written contract or certificate of insurance
The non-life insurance segments comprises fire, marine, motor, health, and others. The non-life sector
growth has been largely dominated by motor insurance with 45.8% share in FY12.
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 staterequired minimum to protect assets such as your home and savings
Medical 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.
Form “B” : to cover Own Damage Losses and Act Liability. The policy can also be extended to cover
additional liabilities as provided in the Tariff.
Form “B” Policies are for Private Cars, Commercial Vehicles, Motor Cycles/ Scooters, etc.
For private cars and motorcycles, there are two Sections in the comprehensive policy.
Section III is provided for commercial vehicles.
Loss or Damage (or “Own Damage”) to the vehicle. The risks covered are :
Loss or Damage to your vehicle against Natural Calamities
Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm,
tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.
Loss or Damage to your vehicle against Man-made Calamities
Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any
damage in transit by road, rail etc.
Personal Accident Cover
Coverage for the individual driver of the vehicle while travelling, mounting or dismounting
from the car. Optional personal accident covers for co-passengers.
Third Party Legal Liability
Protection against legal liability due to accidental damages resulting in the permanent injury
or death of a person, and damage caused to the surrounding property.
Exclusions
Typically, the motor insurance plan does not provide for:
Normal wear and tear or general ageing of the vehicle
Mechanical/electrical breakdown.
Depreciation, wear and tear of consumables like tubes and tires.
Damages that occur while a person is driving with invalid driving license.
Damage that occur while a person is under the influence of drugs or liquor.
Damage due to a war, civil war, mutiny, or nuclear risk.
Claims arising out of contractual liability.
Use of vehicle other than what it is meant for. For example, if a private car is being used as a taxi
and gets involved in an accident, the owner will not be able to claim damages.
Towing Charges
If the motor car is disabled as a result of damage covered by the policy, the insurers bear a reasonable
cost of protecting the car and removing it to the nearest repairers, as also the reasonable cost of redelivery to the insured. The amount so borne by the insurers is limited to maximum of Rs.2,500/- in
respect of any one accident.
(Note: For motor cycles the limit is Rs.300/-, for cars Rs.1500/ - and for commercial vehicles Rs.2500/-).
Repairs
Ordinarily repairs arising out of damage covered by the policy can be carried out only after they are
authorized by the insurers. However, the insured is allowed to carry out the repairs without authorization
from the insurers, provided that:
the estimated cost of such repair does not exceed Rs-500/- (Rs.150/- for motor cycles).
the insurers are furnished forthwith with a detailed estimate of the cost; and
the insured gives the insurers every assistance to ensure that such repair is necessary and that the
charge is reasonable.
Compulsory Excess
This applies to all vehicles. The insured has to bear a part of the claim amount in respect of each
accident.
Further loss / damage to lamps, tyres, mudguards and / or bonnet side parts, bumpers and / or
paintwork is not payable except in the case of a total loss of vehicle.
Section II Liability to Third Parties
The insurers indemnify the insured against all sums which he may become legally liable to any person
including occupants carried in the motor car (provided that they are not carried for hire or reward) by
reason of death or bodily injuries caused to such third parties or by reason of damage to the property of
third parties caused by or arising out of the use of the motor car. The insured’s liability for damage to
property of third parties is limited to Rs.6000/ -; whilst liability for death of or bodily injury to third party
is unlimited.
Section III: This Appears In Commercial Vehicle Policies Only
This section provides cover while the vehicle is towing one disabled mechanically – propelled vehicle. It
provides that whilst the insured vehicle is being used for the purpose of towing any one disabled
mechanically – propelled vehicle.
The towed vehicle should not be towed for hire or reward
No cover is available under the policy for the damage to the towed vehicle or the property
conveyed thereby.
Rating/ Proposal Form
Rates are based upon the cubic capacity as given by manufacturers, Insured’s Declared Value
(IDV), the Zone of operation and age of the vehicle.
The cubic capacity of the vehicle indicates the power of the engine.
Similarly there are different rates for vehicles in the age groups.
There are two Zones of operation
Zone A : Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, N.Delhi & Pune
Zone B : Rest of India.
Commercial Vehicles
The rating depends upon the Zone of operation, passenger carrying capacity/ gross vehicle
weight, Insured's Declared Value (IDV) and age of the vehicle.
There are three Zones for commercial vehicles.
Zone A:
Chennai, New Delhi, Kolkatta and Mumbai
Zone B: All other state capital
Zone C: Rest of India
Theft Claim
•
If your car has been stolen, the first thing to do will be to file a police report.
•
Notify your insurance company as soon as you file the police report, this will help in case the thief
has caused some damage to others with your car. Also please note, your insurance company will
not process your claim if you have not filed a report with the police.
•
When you notify your insurance company, provide them all the details of loan/lease of your car
along with the FIR.
•
Provide them with a description of your car, mileage, service record if any. Also submit the list of
personal items stolen along with the car.
•
It is also important to inform your RTO of the theft.
•
Inform your financier immediately of the theft and ask them to discuss the case directly with your
insurer this might expedite the claim process.
•
In case the police recover the vehicle, inform your insurer about the same.
•
If the vehicle is recovered, the Insurance company is liable to pay compensation on damages
caused to the vehicle as per the terms and conditions of your policy and for stolen items if any,
which are covered under your policy.
•
If the vehicle is not recovered, the police have to provide a Non-Traceable Certificate (NTC) and the
court will have to give a final report under sec 173 Crpc.
•
If you have taken a car loan to purchase your car, the insurer will settle the amount directly to
the financier. The settlement amount is on the Insured Declared Value (IDV). This might however
differ based on usage and market value.
