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Motor insurance is mandatory for all the two-wheeler and four-wheeler vehicles such as cars, bikes, scooters, trucks that are plying on the roads in India. Vehicle owners can avail motor insurance even for commercial vehicles as well. Motor Vehicle insurance is the most important document for all vehicle owners/drivers. Its main objective is to give complete protection against physical damage or loss sustained by the insured vehicle from natural and man-made calamities. Apart from the own-damage cover, the auto insurance policy also provides coverage for third-party liabilities, arising out of any accidental damage, injury or death of a third-party. This way the policy ensures peace of mind and security on the roads.
Motor Insurance can be broadly classified under below heads:
Car Insurance gives coverage against accidental loss or damages to own car or a third party. While choosing a car insurance policy, a person should always compare the premium offered by various insurers to ensure that he got the best deal. The amount of premium would depend on the make & value of the car, state from where it is registered and the manufacturing year.
Two Wheeler Insurance provides protection to bikes and scooters. It covers two wheeler vehicles against any own damages as well as any accidental loss caused to third party property or person. Similar to car insurance, the premium of a two-wheeler policy depends on the age of the bike, its make & model, registration year, etc..
Commercial vehicle insurance helps all commercial vehicle drivers to reduce losses they might incur due to damage to their vehicle. Here commercial vehicles include those that are not used for personal purposes, like goods carrying vehicles, trucks, etc.
It covers a third person who has been injured in an accident involving you and your vehicle, including car, scooters, bikes, trucks, etc. The policy doesn’t provide any direct benefit to the insured. As per the Insurance Regulatory and Development of India (IRDA), no insurer can decline to underwrite third party insurance.
This cover is an add on to the third party insurance plan and protects the owner of cars, bikes, scooters and trucks from financial losses caused by damage or theft of the insured vehicle. Besides insuring vehicles, it also provides third-party coverage.
Pay As You Drive policy is a newly introduced car insurance product as per the recent guidelines of IRDA under the Sandbox project. This car insurance policy allows the policyholder to pay the insurance premiums as per the kilometres driven. The policy premiums are to be decided at the time of buying the policy depending on the declared distance by the insurance seeker that he/she expects to drive in a policy tenure. Pay As You Drive policy offers both comprehensive and third party liability coverage on a pilot basis for a year. Currently, insurers like Bharti AXA, Acko General, ICICI Lombard are providing this policy through their online portals, agents, aggregator websites or other distribution channels.
The damages to the vehicle due to below perils are covered in motor insurance-
Always remember your vehicle insurance will not provide coverage in below situations-
Do you know, around 4 lakh people meet with road accidents every month? A survey was conducted by the World Health Organization Report, which stated that in 2012, India had recorded the highest number of road deaths in the world.
Considering the high number and poor conditions of the road, motor insurance has become a necessity to drive on the Indian roads. Motor insurance gives financial protection not only to you but it also covers third party damages. A few private insurers offer a large number of other utilities to the policyholders, like:
The document and formalities involved in a vehicle insurance claim settlement will depend upon the type of vehicle and nature of the loss.
To initiate the process, the insured is required to submit a detailed estimate of the loss to the insurance company. Independent automobile surveyors with engineering background are given the task of assessing the reason and extent of the loss. They carefully inspect the damaged vehicle and submit their survey report with the insurance company who will review and examine it in accordance with the recommendations mentioned therein. The usual practice is to authorize repairs with the repairer to whom the letter is issued in this regard.
On receipt of the notice from the insured or third party, the matter is transferred to the advocate. Complete information about the accident is obtained from the insured along with the following documents-
As per the draft proposal, the new Traffic Violation Premium section will be a penalty points-based system where every violation will be accumulated. People with more violations will be required to pay a higher premium. For instance, wrong parking will carry 10 points and drunk driving will carry 100 points. Moreover, people with 20 points or less would not have any impact on their premium.
The draft further added that the new premium section will be applicable to the third party and own damage premium section. This means Traffic Violation Premium will be attached to both third party insurance or comprehensive insurance.
The new Traffic Violation Premium will range from Rs 100 to Rs 750 in the case of two wheelers and Rs 300 to Rs 1500 in case of cars and commercial vehicles.
However, the new premium section will not apply to new cars but only during car insurance renewals. The premium will be applicable to all car owners, be it individuals or companies. People whose cars are driven by paid drivers will be responsible for any traffic rules violations by their drivers.
The working group has suggested for the new premium system to be conducted in the national capital of Delhi on a pilot basis. During the period, any traffic violation done by cars from other states will also lead to an additional premium during policy renewals.
The Insurance Information Bureau of India (IIB) will coordinate the data from traffic police of different states. The National Informatics Centre capture the traffic violation data and will circulate the points of each vehicle with the different insurance companies.
Last year, modifications were made in the Motor Vehicle Act to revamp transportation rules and penalties in the country including traffic rule violations and technology advancement to curb any form of corruption.
Below are the key changes that will be implemented in the Motor Vehicle Rules:
The official release by the government mentions enforcement of these amendments and monitoring of traffic rules, to improve road safety and minimize any harassment of the driver.
In regard to the motor insurance renewal, The Insurance Regulatory and Development Authority of India (IRDAI) issues guidelines to the general insurance companies in India, to obtain valid pollution under control (PUC) certificate for the vehicle to be insured.
Earlier, the Supreme Court of India had directed Insurance providers to not renew motor insurance for a vehicle without a valid PUC certificate. Now IRDAI has released a circular asking all the Insurers to follow the Supreme Court of India directions especially in the Delhi – NCR.
Pollution under control (PUC) Certificate is a document that any vehicle owner/driver can be asked to furnish by the state government authorized police personnel. This document/certificate can be issued from any petrol pump with a Pollution Checking Centre issue certificates to ensure that the vehicle on road complies with the prescribed emission norms.
Considering the ongoing outbreak of corona virus and the adversities faced by the common masses, the Central Government has announced some relief in regard to payment of annual premiums for Third Party Motor Insurance owners. As per the recent announcement of Finance Ministry, the policyholders can hold their premium payments till May 15, 2020. The window is provided for those policies, which renewal date falls during the period of March 15-May 3, 2020.
As per the insurance norms, if the policyholder fails to pay the premium on or before the renewal due date, the policy ceases to be in force. While policyholder gets a grace period of 30 days to renew the policy in case of health insurance, this is not the same in case of motor insurance. This may even lead to a hefty penalty for driving a vehicle without an active insurance. With this announcement, there will be a great relief for the policyholders in terms of managing their finances during this hardship.
