It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected.
The very fundamental principle of spreading of the risk from few to many is actually practiced by the insurance companies by reinsuring the risks that they have insured.
Underwriting of a risk involves consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.
Insurance is a contract between the insured (client) and the insurer (insurance company) and the proposal form acts like offer from insured side. Moreover, it contains all the required information for the preparation of the policy, which is a contract document.
As per the present provision, the contract of insurance is between insured and the insurer. The role of intermediaries like agent is only for facilitating this process. Thus an Agent can accept the premium on behalf of the insurer but cannot issue receipt officially.
A nominee is the person designated by the policyholder to receive the proceeds of an insurance policy, upon the death of the insured.
Only in case of vintage cars you can have agreed value policy in Motor Insurance.
On the basis of the risks covered, Motor Insurance is divided into two basic types:
Third Party Insurance
Comprehensive Insurance
Third Party insurance covers: Personal Injury Property damage. The name suggests, Third Party Insurance cover for Personal Injury includes:
Liability for death or injuries to third parties - this means that you are insured against death or injury (caused by your vehicle) to pedestrians, occupants of other vehicles, and outsiders other than passengers, for fixed amounts. Passengers of private vehicles and pillion riders are also deemed covered.
Liability to employees connected with operation of the vehicle- this means you are insured against death or injury (caused by your vehicle) to the vehicle's drivers, cleaners, conductors, coolies, employees used in the operation of the vehicle.
Liability to passengers carried in the vehicle for hire or reward - this means that as owner of a taxi, bus or auto-rickshaw, you are insured against death or injury (caused by your vehicle) to the passengers.
This type of Insurance covers all the risks covered in the Motor Vehicles Act (as above), plus loss or damage caused to the vehicle due to: Accident Fire, Explosion, self-ignition, lightning, Burglary, Theft, Riots & strikes, Earthquakes, Flood, typhoon, hurricane, storm, cyclones Malicious acts Terrorism, Also included is the towing charge for private vehicles and for commercial vehicles up to a fixed sum incurred due to accident to the vehicle.
Yes. There are certain exclusions. This insurance does not cover loss or damage caused due to: Driver being under intoxication Vehicle being driven by a person not holding an effective, valid license. It also does not cover: Damage to tyres (unless the vehicle is also damaged). Wear & tear mechanical breakdown and consumables.
In the case of Comprehensive Insurance Cover, for the purpose of premium, vehicles are categorized as follows:
PRIVATE CAR: This is used for personal purposes. The premium is computed on the following basis: Geographical area of use cubic capacity Value of the vehicle. Accessories are to be specified separately under electrical and non-electrical items.
TWO-WHEELER: This is used for personal purposes only. Premium is calculated on cubic capacity and value of vehicle. Accessories are to be specified. Theft of accessories is not covered, unless the vehicle is stolen at the same time.
COMMERCIAL VEHICLE: This is a vehicle used for hire and is classified into: Goods-carrying commercial vehicle: In this case premium is calculated on carrying capacity -gross vehicle weight and value of the vehicle. Accessories extra, as specified. Passenger-carrying commercial vehicle: In this case premium is calculated on carrying capacity of the vehicle -Number of passengers and value of the vehicle. Accessories extra, as specified. Note: all commercial vehicles are subject to compulsory excess in each and every claim for damage.
YES. On payment of additional premium you can get additional benefits, such as: Wider cover on liability to drivers, cleaners, conductors, i.e. under Fatal Accidents Act, W.C. Act & Common Law P. Benefits to owner of vehicle, other family members on named or unnamed basis driving or traveling in the vehicle. P. Benefits to others traveling in the vehicle. Increased property damage cover: (This extension will not cover goods carried on the vehicle).
No claim bonus is a special discount given for every claim-free year. Loading (Malus) is applied during the subsequent year of claims made.
A comprehensive car policy covers transportation risk by rail, road and inland waterways.