Under the provisions of Motor Vehicles Act all vehicles which ply in public places shall have an insurance policy, at least to cover third party liability as specified under the Act.
Types of policies
There are basically two types of policies available for vehicle insurance.
Policy A: Third Party Insurance (Act only Policy)
Policy B: Comprehensive Policy
Third party insurance policy covers only the inter-alia liability of the vehicle owner for loss or damage to life or property of the third parties whereas comprehensive insurance policy covers in addition to third party liability, loss or damage to the vehicle itself by way of accident, theft, etc and specified perils.
In particular, following are the distinctive features of these two policies:
Policy A
This is the "Act only policy ". It is commonly referred to as "third party insurance "as it covers damage or harm caused to third parties other than the insured. It is compulsory to take this cover for all vehicles.
Under this policy the company covers the legal liability of the insured as per the Motor Vehicle Act 1988 in the following cases:
Ø Death of or bodily injury to any person (unlimited liability)
Ø Damage to property other than belonging to the insured or held in trust or in the custody or control of the insured. (Upto Rs.6000 only)
Ø There is a provision in the motor tariff by which on the payment of additional premium, it is possible to take unlimited cover for damage to property also.
Ø Goods carrying vehicles/passenger carrying vehicles/ miscellaneous and special types of vehicles at additional premium Two wheeler/private car/taxi at additional premium
Policy B
This is referred to as the 'Act only & Own Damage Policy' (loss or damage to the vehicle). This is commonly referred to as 'comprehensive insurance'.
Scope of cover
In case of comprehensive cover, the company indemnifies the insured against the loss or damage to the motor vehicle and /or its accessories arising from: Fire, explosion, self ignition or lightning Burglary, house breaking or theft Riot and strike Earthquake (fire and shock damage) Flood, typhoon, hurricane, inundation, cyclone, hailstorm Accidental external means Malicious act Terrorism Whilst in transit by road, rail, inland waterways, lift, elevator or air
Comprehensive insurance cover
Comprehensive Insurance covers loss or damage to a vehicle due to 'own damage' apart from the third party insurance. Loss or damage to a vehicle is included in the 'Own damage' form of insurance when the contingency is caused by the above perils. Moreover, charges for towing the vehicle after an accident to the repairer's place upto a maximum of Rs.1500 for private cars & taxis, Rs.2500 for commercial vehicles and Rs.300 for two wheelers are reimbursable. Additional protection on payment of extra premium is available against Extra fittings like Stereo, air-conditioners, fans etc.,
Exclusions to the comprehensive insurance policy
Ø The insurance company shall not be liable to make any payment in respect of the following even under the Comprehensive Insurance Policy:
Ø Consequential loss, depreciation, wear and tear, mechanical and electrical breakdown, failures or breakages;
Ø Damage to tyres unless the motor vehicle is damaged at the same time when the liability of the company is limited to 50 percent of the cost of replacement;
Ø Loss or damage to accessories by burglary, house breaking or theft unless the motor vehicle is stolen at the same time;
Ø Any accidental loss or damage suffered whilst the insured or any person driving with the knowledge and consent of the insured is under the intoxicating influence of liquor and drugs.
