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General Advice for Motor Insurance

When you decide to buy an insurance policy:
  • Check if the company selling the policy is registered with IRDA
  • Make sure you buy the policy through a genuine licensed agent or broker. Ask for an identity card or licence
  • You can also buy policies from the company directly
  • Read the policy brochure/ prospectus carefully and get to know what the policy covers and does not cover
  • Why Buy Motor Insurance ?
  • What Motor Insurance to Buy ?
  • Motor Insurance Dos and Don'ts

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.

 Why you should buy motor Insurance

Types of Motor Insurance

Broadly there are two types of insurances policies that offer motor insurance cover:

  • Liability Only Policy (Statutory requirement)
  • Package Policy (Liability Only Policy + Damage to owner’s Vehicle usually called O.D Cover

Remember that if you take only a Liability Only Policy, damage to your vehicle will not be covered. Hence, it would be prudent to take a Package Policy which would give a wider cover, including cover for your vehicle.

What Motor Insurance covers

The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy:

  • Fire, Explosion, Self- Ignition, Lightning
  • Burglary/Housebreaking / Theft
  • Riot & Strike
  • Earthquake
  • Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost
  • Accidental external means
  • Malicious Act
  • Terrorism acts
  • While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air
  • Land slide / Rock slide

Basis of Sum Insured: For Own Damage

The Sum Insured under a Motor Insurance policy reflects the value of the motor vehicle determined based on the concept known as Insured's Declared Value. Insured's Declared Value is the value arrived at based on the Manufacturer's present value and depreciation based on the Age of the Vehicle.

Basis of Sum Insured: For Third Party

Coverage is as per requirements of the Motor Vehicles Act, 1988 . Compulsory Personal accident cover for owner-driver is also included. Policy can also be extended to cover various other risks like Personal Accident to occupants of vehicle, Workmen's Compensation to Driver, etc over and above the cover available to him under statute.

motor policies

What Motor Insurance excludes

The following contingencies are usually excluded under the Motor Insurance Policy
  • Not having a valid Driving License
  • Under Influence of intoxicating liquor/ drugs
  • Accident taking place beyond Geographical limits
  • While Vehicle is used for unlawful purposes
  • Electrical/Mechanical Breakdowns.

Dos and Don'ts for Motor Insurance

Motor Insurance: Some Dos and Don’ts

Travelling by road is a reality and filled with danger. An accident can destroy life and families. Insurance helps with timely financial aid in case of such a tragedy. Some forms of motor insurance is mandatory under the law so you should keep informed about motor insurance.

Here are some Dos and Don’ts for buying 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