Motor Insurance Policies, Issues and Claims

Public System Management

Presented by:

Uday Doyal

Motor Insurance

• Originated in UK in England in 1864

• It originally covers third party damages later in1899 it was extended to cover accidentaldamage

• In India, after passing of Motor Vehicles Act,third party insurance was introducedcompulsorily in 1946.

• All India Motor Tariff governs motor insurancebusiness in India.

Loss exposure arising from the automobile accidents

• Legal liability for harm caused to others as a result of negligence

• Bodily injury

• Property damage and/or theft of vehicles.

Premium Rating :Factors

• Driver’s Class

• Territorial Rating

• Vehicle Classification

• Technical Classification

• Value of the Vehicle

• Use of vehicle

• Geographical area of operation

• Claims exprience

Types of Motor Insurance Policies

• According to AIMT, all classes of vehicles use two types of Policy - Form A & Form B.

• Form A is known as Act Policy covers Act Liability

• Form B is known as Comprehensive Policy covers additional losses or damages.

Form A Policy

• As per Motor Vehicles Act, all vehicle plying in India must posses Act policy all the time.

• Violation is a punishable offence with fine

• The Policy Covers:

– Third Party Property Damages/Bodily injury

– Insured Legal liability as per MV Act

• The period of the policy is generally 12 months from the date of inception.

Form B Policy

• It is an optional cover and varies with different classes of vehicles.

• For private cars and motorcycles there are two Sections whereas for Commercial vehicles there is an additional Section.

• Section I of the Comprehensive Policy covers– Loss due to fire, explosion or lightning– Earthquake, flood, storm etc– Theft & Burglary

• It also covers “Protection and Removal Cost” & “Authorization Cost”

• Section II of the Form B Policy covers liabilities towards third Parties.

• Section III of the Form B Policy is applicable only to vehicles used for commercial purposes

• Exclusion of Form B Policy– Driver being under intoxication

– Absence of valid license by the driver

– Damage to tyre

– Wear and tear, mechanical breakdown

Motor Insurance Claims

• Own Damage Claims

• Theft Claims

• Third Party Bodily injury Claims : Fatal and Non-Fatal

Own Damage Claims

• Documents Required

– Claim form

– Registration certificate & Driving license

– FIR copy

– Fitness certificate

– Trip Sheet

– Survey Report

Procedure for Claiming Own Damages

• Informing the insurer

• Policy document verification and appointment of Surveyor

• Photograph of the vehicle should be taken in case of major accident.

• Examination and Settlement based on Surveyor report.

Theft Claims

• Partial and Total loss “due to theft” claims

• Procedure:– Submission of necessary documents to the insurer in

addition to certified FIR copy

– Surrender of the registration book and tax book. RTO should be informed.

– Letter of indemnity and subrogation

– Ignition keys of the vehicle

– Certificate of insurance and original insurance policy

– Specially worded discharged voucher

Third Party Bodily Injury Claims

• Intimation of Claims: Sources– Insured directly

– Claimant

– MACT/Court notice

• Investigation

• Appointment of advocate

• Policy Copy

• Driver’s license

• Compliance Policy Conditions