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FAQ On Auto
Insurance |
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What are the different types of covers
that are granted under Motor Insurance?
What briefly is the risk covered under the
Own Damage Policy?
What are the risks covered under Third
Party Policy?
What extension of cover can be obtained
with regard to private car?
How is the premium charged under motor
insurance?
What are the circumstances under which
discounts are offered in premium?
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What are
the different types of covers that are granted under Motor Insurance?
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There are two types of insurance cover for each class of vehicles:
"A" Policy: This covers the insured's liability to third
parties for death and bodily injury caused by an accident involving the motor
vehicle. This refers to the minimum risks that are to be covered under the
Motor Vehicles Act 1938 (Act Liability).
"B" Policy: Is wider in scope and covers not only accidental
damage to the insured's own vehicle, but also liability to third parties for
bodily injury and / or property damage caused as a result of an accident
involving the insured vehicles (Own Damage Losses and Act Liability). The
policy can also be extended to cover additional liabilities (as provided in the
Tariff)
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What briefly is
the risk covered under the Own Damage Policy |
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The insurance company will indemnify the insured persons against loss or damage
caused to the insured vehicle by any of the following:
fire, explosion, self ignition or lightning
burglary, housebreaking or theft
riot and strike
earthquake (fire and shock damage)
flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm,
frost,
accidental external means
malicious act
terrorist activity
while in transit by road, rail, inland waterway, lift, elevator or air
,land or rockslide
NOTE: The basic rate for premium calculation is a
comprehensive rate covering all the above-mentioned risks. If you do not want a
cover for earthquake (for instance if you don't live in an earthquake prone
area), flood and / or riot and strike, you would be given a discount of 0.10
percent of "Insured's Estimated Value" for exclusion of earthquake and 0.15
percent of the same for exclusion of flood and for riot and strike
respectively.
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What are
the risks covered under Third Party Policy? |
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The insurance company covers any amount which is legally required to be paid by
the insured person, to third parties on account of their death, bodily injury
or damage to their property arising out of the use of the insured car. The
insurance company also indemnifies the legal costs and expenses incurred by the
claimant, if the insured becomes legally liable to pay them.
The insurance company will further indemnify any legal liability payable by the
insured to the occupants in the car (insured vehicle) provided they are not
carried for hire or reward and are not employees / family members of insured.
The indemnity under this policy is available to any driver who is driving the
car if he has been permitted to do so by the insured and provided such driver
does not have any other similar cover.
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What extension of
cover can be obtained with regard to private car?
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The following are the prominent extra risks that can be covered in addition to
the standard cover:
Personal accident of insured, spouse and unnamed passengers
Legal liability of the employees of the insured
Wider Legal Liability to Drivers
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How is
the premium charged under motor insurance? |
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The premium in a Motor Insurance Policy is regulated by the India Motor
Tariffs, operating in the Madras, Bombay, Delhi and Calcutta Regions. For
private cars, the rating considerations are:
Cubic Capacity of the Insured Vehicle
Insured's estimate of the full value of the vehicle and zone in which the
vehicle operates (The premium will also vary depending on whether an 'A Policy'
or a 'B Policy' is purchased)
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What are the circumstances under which discounts are offered in
premium?
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The following are the significant circumstances under which a discount is
offered on the amount of premium to be paid: Where the insured is prepared to
bear a fixed amount in respect of every claim for damages to the vehicle A
discount commonly referred to as bonus is allowed on the premium when no claims
are made against the policy during the relevant previous year
Note: Loading called malus is otherwise charged on the premium
if the insured has made a claim during the relevant previous year A 5 percent
discount is allowed if the insured is a member of a recognised Automobile
Association (the amount of discount will not exceed Rs.100/- for private cars)
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