In this post you will find everything you need to know about Motor Insurance . We hope this information would help you make a wise decision 🙂 . We believe information empowers our customers and supports our motto “Customer is The King ” . So sit back , relax and enjoy this highly informative post.
Motor insurance is mandatory for all vehicles under the provision of Motor Vehicles Act 1988 , be it for commercial or personal use . It is compulsory to have a valid Motor Insurance Policy before you can start driving your vehicle .
In India , nearly 4 lakh people meet with accidents every year . Fatalities in road accidents India are moving up at a compounded annual rate 4 percent. In this background , Motor Insurance is essentially required.
Motor insurance basically covers financial losses arising from accidents , theft and other natural calamities like cyclone , earthquake etc.
Motor insurance policies are of two types : 1. Third party insurance ( Form A ) ; 2. Own Damage ( Form B) . Third party insurance is mandatory as per Motor Vehicle Act. No vehicle can be used without this minimum insurance cover . Use without this insurance is a penal offense. It protects the policy holder against losses which arise due to bodily injury / death to a third party or any damage to property . It is referred to as a ‘third-party’ cover since the beneficiary of the policy is someone other than the two parties involved in the contract (the car owner and the insurance company). The policy does not provide any benefit to the insured. This kind of policy helps protect other people, vehicles and property in the event of an accident that was deemed to be your fault.
Say you drive into the rear of someone’s car, causing damage to the bumper and injuring the driver. Your third-party insurance would cover the cost of the other person’s car and medical expenses.
What isn’t covered, though, is damage to your own car or any injuries you suffer. For that, you’d need a comprehensive insurance policy . Otherwise those costs are on you.
Thus comprehensive insurance policy which covers you , your vehicle and co-passengers against damages and losses from unforeseen calamities is not compulsory by law , but very important to purchase as in Indian conditions , the vehicles are subject to many hazards like potholes, open manholes , untarred roads , poor traffic management system , poor pedestrian management , absence of footpaths for pedestrians , jaywalking , drunken driving , reckless driving which have resulted in so many accidents happening everyday. But beware, if you drink and drive you are not covered.
Comprehensive insurance is your safety net which provides financial safety for bodily injuries to you and others , Benefits to survivors when an accident results in death ; Lawsuits brought against Insured as result of accident ; Repairs made to your car due to damage caused in an accident .
The premium of Motor Insurance depends on certain parameters like gender , age , vehicle classification , etc .Since the third-party insurance cover is mandatory, all non-life insurance companies have an obligation to provide this cover.So the premiums are competitive , moreover private insurers are consistently settling their grievance to retain the competitive advantage and sustain policy holder’s interest than that of public sector insurers.
The cost of a comprehensive cover is several times that of a stand-alone third-party cover, since damage claims are more frequent than third-party claims. Until now, the premium for motor third-party insurance was calculated on the basis of a schedule of rates provided by the Tariff Advisory Committee, an arm of IRDA, the insurance regulator. But IRDA has done away with the motor tariff. The compensation to the victim is largely decided by the earning capacity of the accident victim.
As i said earlier , the cost of a comprehensive cover is several times that of a stand-alone third party cover.And only third party cover is mandatory by law . So many people think to opt just third party cover . One should keep in mind that in case of an accident though you would be spared medical expenses and repairs of third party , but damage to your car and your own medical expenses might cost thousands of rupees if not lakhs . In which case having to foot the bill yourself would wipe out any savings you made by sticking with third-party cover.
In any case, it’s worth looking at the different levels of protection when comparing policies so you’re not missing out for the sake of a few rupees.
Jai Insurance Brokers ( http://www.jaiinsurancebrokers.com ) helps you get maximum cover for minimum premium from all 28 General Insurance companies ( 6 Public and 22 Private ) .
Call today ( 9810557720 ) to get a panorama of benefits with biggest savings in your pocket .