Description of insurance. Neccesity and other facts related to insurance.

Neccesity of insurance policy

According to motor vehicle act 1988, section 146, says insurance is compulsory for all the vehicles that are running on the road.

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.

DESCRIPTION OF POLICY

Comprehensive policy- it covers 3rd party loss cover + coverage due to theft of the vehicle + loss/ damage occurred to insurance holder as well + personal accident cover to owner/ driver.

A. Zero depreciation policy- it covers all the risks of comprehensive policy and depreciation cover is also added. in this policy, 100% claim is obtained on all the plastic parts, fibre parts, rubber parts ( eg. bumpher, tyres etc.). there is no depreciation deduction on these parts of vehicle. the premium of this policy is more than comprehensive policy.

COMPREHENSIVE POLICY

There are mainly 2 types of insurance policy.

1. Third party insurance policy
2. Comprehensive insurance policy

1.Third party insurance- it only covers the damage to the property / loss occurred to the other party due to accident done by insurance holder. it does not cover any loss/ damage occur to insurance holder.

b) it does not cover the loss of vehicle due to theft of vehicle. but loss due to theft can be added by paying extra premium.

According to motor vehicle act, 1988, 3rd party policy is mandatory for all the driving vehicle in india. in case of injury of third party, there is no limit for claim. but in case of property, maximum claim is 7,50,000.

TIME PERIOD POLICY

Normally, insurance policy is valid only for 1 year. the renewal of insurance policy is compulsary on the due date. if the renewal is done after the due date then the vehicle inspection by insurance company is compulsary. if the policy is not renewed within 90 days of due date, then the profit of ncb ( no claim bonus) is not given to policy holder. the insurance policy should be renewed on time.

IDV (insurance declared value)-Tt is sum insured of the vehicle by the insurance company. it is fixed at the starting of the insurance policy period. this is the amount calculated on the basis of manufacturer present value and depreciation value on the age of the vehicle. in short the value of vehicle declared by insurance company is idv.

Depreciation means the reduction in the value of vehicle due to its continuos use.

DEPRECIATION SLAB -

AGE OF VEHICLE	% DEPRECIATION	IDV
NOT more than 6 months	5%	95% of showroom price.
6 month to 1^styear	15%	85% of showroom price.
1^styear up to 2^ndyear	20%	80% of showroom price.
2^ndyear up to 3^rdyear	30%	70% of showroom price.
3^rdyear up to 4^thyear	40%	60% of showroom price.
4^thyear up to 5^thyear	50%	50% of showroom price.

Transfer of insurance policy

1.on transferring the vehicle, the transfer of insurance is compulsory within 14 days. if the insurance is not transferred with in 14 days, then the insurance policy is not valid. the insurance must be on the name of vehicle owner.
2. on vehicle transfer, the policy can be transferred to the new vehicle owner. but ncb is not given to him. the new vehicle owner has to pay the difference of ncb for remaining time period. then the insurance policy transfers to the new owner.
3.after selling vehicle, if insurance holder wants, policy can be transferred to the other new vehicle and profit of ncb can be received.
4.On transferring, the old certificate of insurance is required to be surrendered and a fee of Rs.50/- is to be submitted for the issue of new certificate of insurance. If the old certificate of insurance can not be submitted then full detail about policy should be submitted for issuing of new certificate of insurance.

No claim bonus ( NCB)

Ncb ( no claim bonus)- the discount given by insurance company in premium for not taking any claim in previous year is ncb. if the claim is applied by the insurance holder, then ncb will not be given in next year.

A).Ncb is given to the insurance holder, not to the vehicle.
B).After selling vehicle, if insurance holder wants, policy can be transferred to the other new vehicle and profit of ncb can be received.
C).On vehicle transfer, the policy can be transferred to the new vehicle owner. but ncb is not given to him. the new vehicle owner has to pay the difference of ncb for remaining time period. then the insurance policy transfers to the new owner.
D).Transfer of ncb on changing the insurance company- yes, the benefit of ncb can be obtained from new company at the time of purchase of policy by presenting the proof of ncb certificate obtained from old insurance company.

TIME	NCB OFFERED BY COMPANY ON PREMIUM
After 1 years	10%
After 2 Years	25%
After 3 Years	35%
After 4 years	45%
After 5 Years and so on	50%

Certificate of insurance and cover note

According to central motor vehicle ac, 1989, the Certificate of insurance is a certificate issued by insurance company under the form 51.

Where as the cover note is issued under the form 52. a cover note shall be valid up to 60 days from the issuing date. And policy of insurance is issued before the expiration of the cover note.

HP(hypothecation) in insurance

When the register owner does the agreement of loan from the finance company, then name of the finance company is entered in the registration certificate (RC), it is hypothecation. After entering the hp in the rc, the name of financer also enters in the insurance policy.

At the time of claim receiving, the finance company has the first right on the claim money. Then the rest ( if remaining) is given to the policy holder or loan bearer.

HP(hypothecation) in insurance

At the time of claim receiving, the finance company has the first right on the claim money. Then the rest ( if remaining) is given to the policy holder or loan bearer.

HP(hypothecation) in insurance

At the time of claim receiving, the finance company has the first right on the claim money. Then the rest ( if remaining) is given to the policy holder or loan bearer.

Claim procedure

ACCORDING TO MOTOR INSURANCE POLICY, A POLICY HOLDER

A) On the damage of your own or your insured vehicle ( comprehensive policy)
B) or damage of third party/ injury to the third person ( 3rd party policy) can apply for the claim.

3RD PARTY CLAIM-

In third party claim, in case of injury to the third party there is no limit of amount of claim. while in case of damage to the property, maximum limit of claim is 7,50,000. the insurance company and police must be contacted as soon as possible after the accident.

IF YOU ARE THE VICTIM IN THE ACCIDENT then all the information regarding the insurance policy must be taken by you. and the insurance holder must be notify

OWN DAMAGE CLAIM

In the case of own damage claim, the insurance company and police should be informed as soon as possible about the accident. so that on spot survey of damage can be done. the spot survey must be done.the vehicle should not be removed from the accident place with out permission.
if your policy is cashless policy, then park the damaged vehicle in any near authorised workshop, the company will pay the amount to the workshop.

THEFT CLAIM

In case of theft of the vehicle

A).Fir must be lodge about theft of the vehicle.
B.) Insurance company must be infomed about theft immediately and fill the claim form. notify about all the vehicle details, policy number and details of accident.
C.) Submit all the documents related to vehicle along with policy document, claim form and letter addressed to rto informing about theft of the vehicle.
D).when the vehicle is not traced by police, the claim is approved. all the documents and keys must be submitted to the insurance company. after approval of the surveyor, the amount must be given within 7 days to the policy holder.
E). if the vehicle was purchased on loan, firstly insurance company will pay to the financer. the remaining amount (if any), is given to the policy holder.

Personal accident (PA) cover under motor policy

Personal accident covers the risk in both policies third party and comprehensive.

1. If the registered owner is driving and has valid driving license. Cover is provided to him as owner- driver.

2.Owner driver of the insured vehicle gets the compensation by the insurance company in case of death or injury under this scale.

Type of vehicle claim amo

Type of vehicle	Insured amount	Premium	Cover
2 wheeler	One lakh	Rs. 50	1)100% for death,loss of two or sight of both eyes or one limb and sight of one eye. 2)50% for the loss of one limb or sight of one eye 3)100% for the permanent disablement other than above
Private vehicle	Two lakhs	Rs. 100	Same as above
Commercial vehicle	Two lakhs	Rs. 100	Same as above

RISKS NOT COVER IN THESE CASES

If the damage occur due to war, terror attacks, civil wars or nuclear attacks.

If the policy is not valid. The policy must be renewed on time without any break. If the accident happens in between expiration of old policy and the renewal of new policy, the loss is not covered.

If the driver is driving the vehicle under the influence of alcohol or drugs etc.

If the vehicle is driven by the person without valid driving license.

if the damage occurs due to violation of car manufacturing guidelines.

if the damage occurs due to an accident done intentionally.

if the claim is rejected by the insurance company. the insurance holder can appeal in the court with in 12 months of the rejection.

Risk is cover in these cases

By fire explosion self ignition or lightning
By house breaking or theft
By riot and strike
By earthquake
By flood, typhoon, hurricane,storm
By accidental exterior means
By malicious act
By landslide, rockslide

ON ADDING DETAIL TO THE VEHICLE

According to insurance company, after purchasing a policy, if there is any change in the vehicle, then there is procedure of change in policy by paying extra premium for that addition. example. on the addition of lpg or cng kit in the vehicle, firstly rta should be notify for change in rc. then insurance company should be notify. so that by paying extra premium, that addition can be claimed.

Procedure for recording changes in the policy

If there is any modification in the policy, then submit a letter to the company with the proof of change and on the behalf of change in the proof the company will modify the policy

Cancellation of insurance

1) The policy can be cancelled by insurance company. The company sends the seven days notice to the insurance holder. The insurance company will refund the premium for remaining period if there is no claim under the policy.

2) A policy can be cancelled only after the ensuring that the vehicle is insured with any other company. The original certificate of insurance must be submitted to the company.

3) The insurance company should inform RTA( regional transport authority) for such cancellation.

Double insurance

1). If there are two insurance policies on the same vehicle by mistake, one policy may be cancelled. The later policy will be cancelled.

2(a) if the policies are purchased from TWO DIFFERENT OFFICES of SAME insurance company then the later policy will be cancelled and the premium refund will be 100%.

2(b) if two policies are purchased from TWO DIFFERENT INSURANCE COMPANIES then the later purchased policy will be cancelled and the refund of premium will be only for remaining period on the basis of proportion.

Factors on which premium depend

1) Insured declared value (IDV)

2) Cubic capacity (cc of engine)

3) Geographical zones

4) Vehicle manufacturing year

IMPORTANCE OF IRDA IN INSURANCE SECTOR

all the insurance companies in india works under irda( insurance regulatory and development authority). its regulates the insurance sector in india and helps in growth. its helps in protection of policyholders rights.

complaints against insurance companies in irda

yes, if you are not satisfied with the insurance company, then you can file a complain against that company in irda.

A)first of all, contact the grievance redressal officer of the company

B) file the complain in written with other neccesary documents.

C) take the written acknowledgement of the complain with mention of date of complain.
if you don’t get any satisfied response within 15 days from company, then you can file complain to irda against insurance company

D) you can contact in grievance adressal cell of consumer affair department of irda.

You can call on toll free no. 155255 or 1800 4254 732 or you can email your compalin on complaints@irda.gov.in

After filling the form send it to following address by post ot courier.

CONSUMER AFFAIR DEPARTMENT

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

3-5-817/818, UNITED INDIA TOWERS, 9TH FLOOR

HYDERGUDA, BASHEERBHAG,

HYDERABAD- 500029