MOTOR INSURANCE CLAIMS

BY
R.R.JOSHI
EX-MANAGER
UNITED INDIA INSURANCE COMPANY LTD.

Motor Constitutes
45% of Total Premium

DEFINITION OF MOTOR VEHICLE

Motor vehicle means any mechanically
propelled vehicle adapted for use upon roads
whether the power of propulsion is transmitted
thereto from an external or internal source and
includes chassis to which a body has not been
attached and a trailer

Historical Background
First Motor Car was introduced into England in
1894 and first Motor Policy was introduced in 1895
to cover Third Party Liability. By 1899,accidental
damage to the car was added to the policy
Road Traffic Act 1930 and 1934 introduced
compulsory Third Party Insurance
In India, the Motor Vehicles Act was passed in
1939.The Act was revised in 1988
The Motor Tariff was withdrawn in 2007. However,
the policy formats and relevant General Regulations
were allowed to continue

LEGISLATIVE ENVIRONMENT
The Insurance act
The Motor Vehicle Act
The India Motor Tariff (erstwhile)

Application of Basic Principles

Utmost Good Faith- Material facts in Motor
Insurance are1. Type of Vehicle and IDV
2. Zone of Registration/Use
3. Past loss experience
4. Driving History and traffic convictions of Driver
Insurable Interest-Policy will be normally issued
in the name of the Registered Owner of the Vehicle.
Financial Interest/Hypothecation is recognized by
special endorsements

Application of Basic Principles..contd.

IndemnityIDV will be the basis of

settlement for TL/CTL/Theft claims and repair

claims will be settled by applying depreciation
as per policy table on the parts replaced
Subrogation modification introduced by
Knock-for Knock Agreement
Contribution as per Insurance Law
Proximate Cause---as per Insurance Law

Salient provisions of Motor Vehicles Act as

applicable to Insurance

1.
2.
3.
4.
5.
6.

Sections 140-144 deal with No Fault Liability

Sections 145-164 deal with Insurance of Motor Vehicles
against T.P.Risks
Sections 165-176--- deal with Claims Tribunals
Sections of Special Relevance areSection-140 ---NFL
Sections-146 and 147---Compulsory Insurance and Limits of Liability
Section149--- Defences available to Insurers
Section---161--- Legislation regarding Hit and Run
Section-163 A- Structured Compensation
Section -166Fault Liability

SECTION-146-Compulsory Third Party

Insurance
No person shall use, except as a passenger, or
allow any person to use, a motor vehicle in a
public place unless there is in force in relation to
the use of the vehicle by that person or that other
person as the case may be, a policy of insurance
complying with the requirements of this chapter
Exemptions---Central and State Government
Vehicles and Vehicles belonging to Local
Authorities/State Transport Undertakings

SECTION-147 LIMIT OF THIRD PARTY

LIABILITY

Policy of insurance must be a policy which insures the

classes of persons specified in the policy againstI.
Any liability incurred by the insured in respect of
death or bodily injury to ANY person including
owner of the goods or his authorized
representative carried in the vehicle
II.
Liability incurred in respect of damage to any
property of a third party
III. Liability incurred in respect of death or bodily
injury of any passenger of a public service
vehicle.

LIMIT OF THIRD PARTY LIABILITY (contd..)

IV.

V.

Liability arising under Workmens Compensation

Act, 1923 in respect of death or bodily injury to:( a ) Paid driver of the vehicle
( b ) Conductor or Ticket Examiner (Public
Service Vehicles)
( c ) Cleaner/Coolies carried in goods vehicle
Liability in respect of death or bodily injury of
passengers who are carried for hire or reward or
by reason of or in pursuance of contract of
employment

LIMIT OF THIRD PARTY LIABILITY

(contd..)

The policy of insurance should cover the liability

incurred in respect of any one accident as follows :(A)In respect of death or bodily injury to any person:
the amount of liability incurred i.e. unlimited
(B) In respect of damage to any property of
third
party: limit of Rs. 6000/Insurers are providing increased property damage
cover as under:
1.Two Wheelers-----Rs.100000/2.Private
Cars and Commercial Vehicles-----

SECTION 140---NO FAULT LIABILITY

The Supreme Court and High Courts had pointed out several
times that proving negligence of Driver was a cumbersome
task and the litigation became a prolonged and expensive
process for the claimants. The Courts advocated the Principle
of No Fault Liability, atleast as a measure of interim Relief.
This led to the introduction of NFL in the Motor Vehicles Act
As per the principle of no fault-- CLAIMANT IS NOT
REQUIRED TO PROVE NEGLIGENCE OF THE
DRIVER
If there is a valid Insurance Policy covering the vehicle
involved in the accident the Insurer is liable to pay
Amount of compensation payable:
Rs. 50,000/- for death/Rs.25,000/- permanent disablement

Section 149(2)---Defences available to the Insurer

There has been a breach of a specified condition of
the policy viz. a condition
Excluding the use of the vehicle:
a)for hire or reward, where the vehicle is a vehicle not
covered by a permit to ply for hire or reward or;
b)for organised racing and speed testing or;
c)for a purpose not allowed by the permit under which the
vehicle is usedwhere the vehicle is a transport vehicle
2.Excluding driving by a named person/persons or by any
person who is not duly licenced or by any person who has
been disqualified from holding/ obtaining a driving license,
1.

during the period of disqualification

Section 149 (2)---Defences available to the

Insurer..contd.

3. Caused/contributed by war/civil war/civil

commotion
The Policy is void on the ground that it was
obtained by non-disclosure or misrepresentation of
a material fact
The Insurer is treated as a Judgement Debtor and is liable
to relinquish the liability which devolves upon the Insured
as per the MACT Award . His defences are limited within
the provisions of Section 149(2).In case there is a
collusion between the Insured and claimant, the Insurer
can, as per provisions of Section 170,contest the claim on
all/any of the grounds available to the Insured

Section 163(A)-Structured Compensation

Special Provision to pay compensation on Structural
Formula basis. Claimant is not required to prove
negligence of the Driver
In case of Fatal Accidents, a Table of Compensation
is provided in which the amount payable depends
upon the age of the victim and the multiplier
applicable
Compensation is reduced by 1/3 rd towards expenses
of self maintenance incurred by the deceased, had he
been alive
Amount of Compensation will not be less than
Rs.50,000/

MOTOR ACCIDENT CLAIMS TRIBUNAL

Established by the State Government as per

provisions of Section 165 of M.V.Act
Section 166-Application of Compensation has to be
filed within six months from the accident date,to
the MACT having jurisdiction over the area in
which the accident occurred/ area in which the
claimants/ defendants reside
Award of the Claims Tribunal as per Section 168
and compensation to be deposited within 30 days of
the Award date
Section 173-Appeal,if any, to be filed within 90
Days of Award with the respective High Court

Section 161--HIT AND RUN

HIT AND RUN ACCIDENT is defined as an accident

arising out of the use of a Motor Vehicle, the Identity of
which cannot be ascertained in spite of reasonable efforts for
the purpose
Compensation is paid through the Solatium Fund
Death ---Rs.50000/Grievous Hurt---Rs.25000/ Claims Procedure Application will be made in the
prescribed Form to the Collector/Tehsildarand the Claims
enquiry Officer appointed by them will enquire into the
matter and submit a detailed Report to the Claims Settlement
Commissioner. Once satisfied, he will pass the Award and
the payment will be made from the Solatium Fund.

Lok Adalat for speedy disposal of MACT cases

Special Features
1.
2.
3.
4.

5.

Market Practice is to place claims upto Rs.500000/-before

the Lok Adalat, wherein liability is clear
Consent applications from both parties are taken for placing
the claims before the Lok Adalat
Notice will be issued to the parties/their Advocates to
participate in the Lok Adalat by the Legal Aid Officer
Efforts will be made to bring the parties to a fair compromise
and if agreement is reached, the Compromise Memo duly
signed by both parties will be submitted to the Claims
Tribunal for passing the Final Order and Apportionment of
Compensation
Insurer must deposit the agreed amount within 4 weeks from
the Order date

De-Tariffing of Motor Business and Types of

Motor Policies

Motor Tariff was discontinued w.e.f. 1/01/2007

However Policy Wordings and certain General
Regulations will continue until amendments are
permitted by IRDA

TWO TYPES OF POLICIES

1. Standard Form of LIABILITY ONLY POLICY
applies uniformly to all three classes of Vehicles and
covers Act Liability plus P.A. to Owner / Driver
2. Standard Form of PACKAGE POLICIES
applies separately to the three classes of vehicles and Section I covers own damage
Section II covers liability as in (1) above and
enhanced TPPD cover

LIABILITY ONLY POLICY

Salient Features:

Standard Form of Policy applicable to all classes of

Vehicles with suitable amendments in Limitations as to Use
II. Policy covers the Insureds Legal Liability towards Third
Parties as per the Motor Vehicles Act, for accidents arising
out of the use of the vehicle in a public place anywhere in
India
III. Third Party includes amongst others
Owner of Goods/representative of Owner of Goods
travelling with the goods carried by the Goods Vehicle
Passangers carried for Hire or Reward ,in a Passanger
Carrying Vehicle
I.

LIABILITY ONLY POLICY..contd.

Employees travelling in the Commercial vehicle by reason

of or in pursuance of Contract of Employment viz.Driver /
Cleaner/Conductor/Coolies Liability as per provisions of
the W.C.Act

Additional
1.

2.

BenefitP.A.Cover to Owner/Driver

Owner/Driver must possess an effective Driving Licence

for the respective class of vehicle and is covered whilst
driving the vehicle,travelling as co-driver/occupant,
mounting or dismounting
Benefit covers Death/ Loss Of Limbs/Permanent Total
Disablement caused by bodily injury due to accidental,
external, violent and visible means

LIABILITY ONLY POLICY..contd.

OTHER DRIVER EXTENSION--Liability extends to

indemnify persons possessing an effective Driving Licence
and driving the vehicle with the Insureds permission
INDEMNITY TO LEGAL HEIRS/PERSONAL
REPRESENTATIVES--In the event of death of the Insured
after the accident giving rise to Third Party liability under the
policy, the Insurer will indemnify the legal heirs/personal
representatives against the liability incurred, treating them as
the Insured
No provision in the policy shall affect the right of any
claimant to recover an amount by virtue of the provisions of
the M.V.Act. Insurer may file a separate CIVIL SUIT to
recover such amount( not payable as per the policy
provisions )from the Insured

LIABILITY ONLY POLICY..contd.

General Exclusions

1.

Breach of Limitations as to Use

Contravention of Drivers Clause
Contractual Liability
Liability to the Employees of the Insured, other than those
connected with the operation of the vehicle, travelling in
the insured vehicle out of and in the course of employement
.(NFL may have to be paid)
Liability to Gratuitous/NFPP in Commercial Vehicles and
Liability to occupants of private car/pillion rider on twowheeler.......(NFL may have to be paid)
War and Allied Perils and Nuclear Perils

2.
3.
4.

5.

6.

COMPARISON BETWEEN LIABILITY COVER

UNDER PACKAGE POLICIES AND LIABILITY
ONLY POLICY
LIABILITY ONLY POLICY
Death/Bodily Injury to
NFPP in Commercial
Vehicles/occupants in private
car/pillion rider on twowheeler covered upto NFL
amount
Liability does not extend to
include limits of carriageway
during loading /unloading
from GCV
TPPD restricted to Rs.6000/-

LIABILITY UNDER PACKAGE POLICY

Death/Bodily Injury to occupants in

private car/pillion rider on twowheeler covered as per Court
Award and also includes NFL
amount. NFPP in Commercial
Vehicles covered upto NFL amount
Liability extends to include limits
of carriageway during loading
/unloading from GCV
TPPD limit of Rs.100000/- for Two
Wheelers and Rs.750000/- for
Private Cars/Commercial Vehicles

COMPARISON BETWEEN LIABILITY

COVER UNDER PACKAGE POLICIES
AND LIABILITY ONLY POLICY
LIABILITY ONLY POLICY

Liability for goods carried

in the vehicle not covered
Liability for damage to
bridge/viaduct/road due to
vibrations/weight of vehicle
/goods not covered
Liability due to Towing of
Disabled mechanically
propelled vehicles not
covered
Wider Legal Liability to
employees/workmen not
covered

Liability to goods carried in the vehicle

not covered
Liability for damage to
bridge/viaduct/road due to
vibrations/weight of vehicle /goods not
covered
Liability due to Towing of Disabled
mechanically propelled vehicles is
covered
Wider Legal Liability under Fatal
Accidents Act/Common Law to
employees/workmen covered at
additional premium

LIABILITY UNDER PACKAGE POLICY

Package Policies under Motor Portfolio

Standard Form of Package Policy for Private Car
Standard Form of Package Policy for Two Wheelers
Standard Form of Package Policy for Commercial
Vehicles
Standard Form of Package Policy for Road Transit
Risk Policy
Standard Form of Package Policy for Motor Trade
Road Risk Policy
Standard Form of Package Policy for Motor Trade
Internal Risks

CLASSIFICATION OF VEHICLES
1.
2.
3.

Private Cars
Motor Cycles / Scooters
Commercial Vehicles

COMMERCIAL VEHICLES
Commercial Vehicles are further sub-divided into
groups as follows-A. Goods carrying Vehicles
A.1 Public Carriers
Other than 3 wheelers
A.2 Private Carriers
A.3 Goods carrying motorized 3 wheelers and
Motorized Pedal Cycles (Public Carriers)
A.4 Goods carrying motorized 3 wheelers and
Motorized Pedal Cycles (Private carriers)

COMMERCIAL VEHICLES..contd.
B. Trailers
C.

Passenger Carrying vehicles

C.1 4 wheeled & 3 wheeled vehicles not exceeding
6 passengers capacity- Taxies, Autos
C.2 4 or more wheelers with passengers exceeding
6 and 3 wheelers exceeding 17 passengersBuses, Tempos
C.3 Motorized 3 wheelers carrying between 6 and
17 passengers
C.4 Motorized 2 wheelers for carrying passengers

COMMERCIAL VEHICLES..contd.
D. Miscellaneous vehicle & special type of
vehicles- Ambulances, Bulldozers etc.
E. Motor Trade Road Transit Risks
Mostly, MFGs
only
& DEALERS
F. Motor Trade Road Risks only
G. Motor Trade Internal Risks only

MOTOR PACKAGE POLICY- PRIVATE CAR

PERILS COVERED UNDER SECTION -I Own Damage
I.
Fire explosion, self ignition, lightning
II.
Burglary, housebreaking , theft
III.
Riot and strike
IV.
Earthquake (fire and shock damage), Rockslide /
Landslide
V.
Flood, typhoon, hurricane, storm, tempest, inundation,
cyclone, hailstorm, frost
VI. Accidental external means
VII.
Malicious Act /Terrorism
VIII. Whilst in transit by road, rail, inland waterway, lift,
elevator or air

OTHER ASPECTS RELATING TO SECTION -1

Loss/Damage to Accessories are covered only if the

accessories are on the Motor Car
Deduction for Depreciation on parts replaced
Protection and Removal to Garage cost restricted to
Rs.1500/- in respect of any accident
Immediate Authorised Repairs necessarily and
reasonably incurred towards damage covered under the
policy restricted to Rs.500/Total Loss/Constructive Total Loss claims will be
settled on the basis of IDV
IDV= Listed Selling Price(-)Depreciation for age

EXCLUSIONS TO SECTION 1
A.
B.

C.

D.

Consequential loss, depreciation, wear and tear

Mechanical or electrical breakdown, failures or
breakages(subsequent damage to the vehicle
payable
Damage to tyres and tubes unless the motor car is
damaged at the same time, in which case the
liability of the insurer is limited to 50% of the cost
of replacement
Any accidental loss/damage suffered whilst the
Insured/any person driving with the knowledge and
consent of the Insured is under the influence of
intoxicating liquor or drugs

ADDITIONAL FEATURES/RESTRICTIONS UNDER

TWO WHEELER AND COMMERCIAL VEHICLE
PACKAGE POLICIES
TWO WHEELER POLICY COMMERCIAL VEHICLE POLICY

Theft of Accessories
alone is not covered.
Theft is covered only
if vehicle is stolen at
the same time
Cost of Protection and
Removal to Garage
restricted to Rs.300/-
and immediate
authorised repairs
restricted to Rs.150/-

Theft of Accessories alone is not

covered. Theft is covered only if
vehicle is stolen at the same time
Cost of Protection and Removal to
Garage and immediate authorised
repairs differ for the different
categories of vehicles involved
Loss/damage to lamps/tyres/
mudguards/bonnet side parts
/painting not payable

GENERAL EXCEPTIONS
(APPLICABLE TO ALL SECTIONS OF THE POLICY)

Accident, loss, damage, liability sustained outside the

Geographical area
2) Any claim out of Contractual liability e.g. Goods in GCV
are carried under Contract of Affreightment
3) Whilst the Insured Vehicle is-
being used otherwise than in accordance with the
Limitations as to use
Being driven by a person other than a driver as stated in
the Drivers clause
4) Consequential loss
5) War Perils/Nuclear Perils
1)

DRIVERS CLAUSE
Any person including insured:
Provided that a person driving holds an
effective driving licence at the time of accident
and is not disqualified from holding or
obtaining such a licence.
Provided also that the person holding an
effective learners licence may also drive the
vehicle and that such a person satisfies the
requirement of Rule 3 of the CMV Rules
1989.
-

LEARNERS LICENCE
PROVISIONS OF RULE 3 OF C.M.V RULES1989
While receiving instructions or gaining experience in
driving with the object of presenting himself for a test
of competence to drive so long as:
a)such

a person is the holder of an effective learners licence

issued to him in Form 3 to drive the Vehicle.
b)Such a person is accompanied by an instructor holding an
effective licence to drive the vehicle and such instructor is
sitting in such a position to control or stop the vehicle and
c)There is painted, in front and the rear of the vehicle or on a
plate or card affixed to the front and the rear--the letter L in
the red on a white background

Extensions/Additional Benefits under

Package Policies

Own Damage Section

1. Electronic/Electrical Fittings are covered at higher
premium rate
2. CNG/LPG Kits and Fibre Glass Tanks are covered
by charging extra premium
3. Two wheeler Policies can be extended to cover theft
of accessories alone by charging extra premium
4. Exclusion of Lamps/Tyres/Mudguards etc. in
Commercial Vehicle Policies can be deleted by
charging extra premium

Motor Trade Policies

These policies are taken by Motor Traders who may
be either1. Dealers/Distributers of Brand New/Second Hand
Vehicles or
2. Engaged in their Overhaul/Repairs or
3. Both

The Motor Trader will require

1. Motor Trade Road Transit Risk Policy for covering
Road Transit Risks for brand new vehicles from the
Manufacturers premises to their premises

Motor Trade Policiescontd.

2. Motor Trade Road Risk Policy for demonstration of
brand new vehicles to the prospective buyers.These
vehicles can be taken out on the public roads for
trial runs by temporarily attaching Trade
Certificates. Similarly, named driver plates are used
for driving second hand registered vehicles
3. Motor Trade Internal Risk Policy for damage to
Customers/Customers vehicles
entrusted to them for maintenance and/or repairs,
due to accidents, fire, negligence of employees etc.
on their premises

MOTOR INSURANCE PRACTICE

De-Tariffing of Motor Business w.e.f 01/01/2007

Insurers are free to charge rates for Own Damage premium
based on the overall O/D Claims experience
T.P.Premium structure as per IRDA guidelines. T.P.Premium
collected by all Insurers was accumulated in a Pool
administered by GIC till recently.T.P.Pool abolished
w.e.f.01/04/2012
Add-on covers to be filed and approved by IRDA
Policy terms/ conditions and relevant General Regulations
of erstwhile Tariff to continue

Some of the General Regulations still applicable

are discussed in detail
G R-4 Extension of Geographical Area
The geographical Area of Motor Policies can be
extended, by charging a flat additional premium, to
include the following SAARC countries

6.

Bangladesh
Bhutan
Nepal
Pakistan
Sri Lanka
Maldives

Loss/Damage during Air /Sea Voyage excluded

1.
2.
3.
4.
5.

G.R.8 CONCEPT OF IDV AND SCHEDULE OF

DEPRECIATION FOR ARRIVING AT IDV
IDV is fixed on the basis of Manufacturers
Selling Price of the particular brand/model less
Depreciation as per fixed Schedule given below
Age of the Vehicle

TL/CTL/Theft
Claims will be
settled on the
basis of IDV
% of
Depreciation for
fixing IDV

Not exceeding 6 months

5%

Exceeding 6 months but not exceeding 1 year

15%

Exceeding 1 year but not exceeding 2 years

20%

Exceeding 2 years but not exceeding 3 years

30%

Exceeding 3 years but not exceeding 4 years

40%

Exceeding 4 years but not exceeding 5 years

50%

G.R. 9--DEPRECIATION ON PARTS FOR

PARTIAL LOSS CLAIMS
Type of Part

Depreciation

Rubber parts / Nylon / Plastic Parts /

Tyres & Tubes / Batteries / Air Bags

50%

Fibre glass components

30%

Glass Parts

Nil

G.R. 9--DEPRECIATION ON PARTS

All other Parts including metal and wooden parts
Age of the Vehicle

% of
Depreciation for
fixing IDV

Not exceeding 6 months

Nil

Exceeding 6 months but not exceeding 1 year

5%

Exceeding 1 year but not exceeding 2 years

10%

Exceeding 2 years but not exceeding 3 years

15%

Exceeding 3 years but not exceeding 4 years

25%

Exceeding 4 years but not exceeding 5 years

35%

Exceeding 5 years but not exceeding 10 years

40%

Exceeding 10 years

50%

G.R. 10--GEOGRAPHICAL ZONES

A)Private Cars/ Motorized two Wheelers /
Commercial Vehicles under Sec. 4 C.1 & C.4
(Taxis
and 3 wheeler PSVs upto 6
passangers capacity /Two wheeler taxis )
Zone A: Ahmedabad, Bangalore, Chennai, Hyderabad ,
Kolkata, Mumbai, New Delhi and Pune.
Zone B: Rest of India

B) Other Commercial Vehicles:

Zone A
Zone B
Zone C

: Chennai, Delhi / New Delhi, Kolkata, Mumbai

: All other State Capitals
: Rest of India

G.R. 12 SHORT PERIOD SCALE

Period

% of Annual
Premium Rate

Not exceeding 1 month

20%

Exceeding 1 month but not exceeding 2 months

30%

Exceeding 2 months but not exceeding 3 months 40%

Exceeding 3 months but not exceeding 4 months 50%
Exceeding 4 months but not exceeding 5 months 60%
Exceeding 5 months but not exceeding 6 months 70%
Exceeding 6 months but not exceeding 7 months 80%
Exceeding 7 months but not exceeding 8 months 90%
Exceeding 8 months

Full annual
premium / rate

G.R.17-TRANSFERS
Transfer of Liability portion

of the policy--

On transfer of Ownership, the Liability cover, either under

Liability only or under Package Policy, is deemed to have
been transferred in favour of the Transferee from the date of
transfer. Thus, the Liability cover follows the fortunes of the
vehicle
This ensures continuity of Insurance and protects the rights of
Third Parties.
The Transferee must apply within 14 days to the Insurer of the
vehicle providing the Insurance, previous Ownership and
transfer particulars so that the Insurer will effect the
necessary changes on the policy and issue a fresh
Certificate of Insurance

G.R.17-TRANSFERScontd.

Transfer of O/D Portion of the policyIn the case of

Package Policies, transfer of the Own Damage portion
in favour of the Transferee involves the following
procedure

1.

Specific request from the Transferee by submission of a fresh

proposal
Consent of Transferor
NOC from Bank/Financial Institution
NCB/NCB difference recovery from Transferee, wherever
applicable
Submission of old Certificate for cancellation and payment of
Transferee Fee as per norms

2.
3.
4.
5.

G.R.27-NO CLAIM BONUS

No Claim Bonus can be earned only on the Own
Damage Section of the package policy
Motor Trade Policies are not entitled to NCB
An Insured is entitled to NCB only at the time of
policy renewal and after a minimum of one full year
(12 months) of claim free driving
The NCB follows the fortunes of the original
Insured and not the vehicle or the policy. Thus,
when a vehicle is transferred, the new Owner will be
entitled to NCB as per his eligibility. The different
cases of NCB eligibility are discussed herebelow

G.R.27-NO CLAIM BONUS.contd.

NCB on Substituted Vehicle:-is allowed provided the

substituted vehicle is of the same class as the vehicle on
which the NCB is earned
NCB transfer on the death of the Insured:-NCB
entitlement of the original Insured will pass on to such legal
heir to whom the custody and use of the Vehicle will pass
NCB transfer on Vehicle owned by Institution and
transferred to the Employee :- %age of NCB earned on a
vehicle owned by an Institution during the period when it
was allotted to and exclusively operated by an Employee,
can be passed on to the Employee if the Ownership is
transferred in his name. Confirmation to this effect is
required from the Employer
NCB is allowed on expired policy :-provided policy is
renewed within 90 days

G.R.27-NO CLAIM BONUScontd.

NCB entitlement on transfer of Insurance to another

Insurer:-

1.

Transferee Insurer may allow the same rate of NCB which the Insured
would have received from the previous Insurer
Evidence of entitlement (either through Renewal Notice or letter from
the previous Insurer) will be required
In case proof is not provided, the New Insurer may allow the first slab
of NCB and grant the actual entitlement after seeking written
confirmation from the previous Insurer

2.
3.

NCB entitlement on Vehicle sold and not replaced

immediately :If an Insured Vehicle is sold and not replaced immediately, NCB may be
granted on a subsequent insurance, provided such fresh insurance is
effected within 3 years from the expiry of the previous insurance. NCB
will be that earned at the expiry of the last 12 months period of
insurance

G.R.27-NO CLAIM BONUScontd.

Table of NCB
ALL TYPES OF VEHICLES

% OF DISCOUNT
ON OWN DAMAGE
PREMIUM

No claim made or pending during the preceding full year

of insurance

20%

No claim made or pending during the preceding 2

consecutive years of insurance

25%

No claim made or pending during the preceding 3

consecutive years of insurance

35%

No claim made or pending during the preceding 4

consecutive years of insurance

45%

No claim made or pending during the preceding 5

consecutive years of insurance

50%

G.R. 39 INCREASED TPPD COVER AND

REDUCTION IN PREMIUM FOR LIMIT AS PER
M.V.ACT
S. No

Class of Vehicle

TPPD

Premium
Reduction

Private Cars

7.50
Lakhs

Rs.100/=

2 wheelers-private & Commercial

1.00 lakh Rs.50/=

commercial Vehicles-3 wheelerstaxies

7.50
Lakhs

Rs.150/=

Other commercial Vehicles

7.50
Lakhs

Rs.200/=

DOUBLE INSURANCE

When two policies are in existence on the same vehicle with

identical cover, one of the policies may be cancelled
Where one of the policies commences at a date later than
the other policy, the policy commencing later is to be
cancelled and pro rata refund of premium thereon will be
allowed
If however, due to requirements of Banks/Financial
Institutions, intimated to the insurer in writing, the earlier
dated policy is required to be cancelled than refund of
premium will be allowed after retaining premium at short
period scale for the period the policy was in force prior to
cancellation.
No refund of premium can be allowed for such cancellation if any
claim has arisen on either of the policies.

ADD-ON COVERS UNDER TARIFF

Compulsory PA cover to Owner-Driver

Optional PA cover to persons other than Owner-Driver
Higher premium for Electrical/Electronic fittings
Additional Premium for CNG/LPG Kit
Additional Premium for Fibre Glass Fuel Tanks
Additional Premium for Vehicles used for Driving Tuition
Loading of Premium to cover Vehicles imported without

Customs Duty

Additional Premium to cover Wider Legal Liability for

persons employed in connection with the operation of the
vehicle

Additional Premium for covering NFPP Liability

Add-On covers offered by Insurers Post

De-Tariffing
These benefits are only offered to Owners of Private
Cars. Additional Premium is charged for granting the
Benefit
I. Depreciation Buyback Repair claims will be
settled without applying Depreciation on the parts
replaced provided The age of the vehicle is not more than 3 years
Not more than two O/D claims are lodged during the
policy period
Repairs are carried out at the garage approved by
the Insurer

Add-On covers offered by Insurers Post

De-Tariffing..contd.
II. Return to Invoice
In the event of the Insured Vehicle becoming a Total
Loss/Constructive Total Loss, the Insurer will pay to the
Insured the new replacement value of the same make and
model subject to the limits of the Sum Insured i.e. the
claim will not be settled on IDV BASIS

III. NCB Protection The NCB is protected provided

1.
2.
3.

Not more than ONE Claim is made during the policy

period
The renewal is effected before 90 days of policy expiry
NCB earned on the vehicle is 25% or more

Add-On covers offered by Insurers Post

De-Tariffingcontd.
IV. Repairs to Rubber/Fibre /Plastic parts
In the event of claim for damages only to these parts
and they are repaired rather than being replaced,
the NCB will not be affected
V. Emergency Transport and Hotel expenses
In the event of the Insured Vehicle being damaged in
an accident rendering it temporarily unusable and
resulting in a valid claim under the policy ,the
Insurer will indemnify the cost of Hotel
Accomodation in the nearest city and the taxi fare
for return to the Insureds residence

Add-On covers offered by Insurers Post

De-Tariffingcontd.
VI. Loss of Personal Belongings
This extension will indemnify the loss of personal
belongings(as defined) lying in the Insured Vehicle
at the time of operation of the peril insured under
Section 1 of the policy. Insurer will pay only only if
the claim for damage to the vehicle is admissible
VII. Replacement of Locks/Keys---This extension will reimburse the cost of
replacement of locks/keys if the vehicle is broken
into or cost of locks/stolen keys if the keys are stolen

Add-On covers offered by Insurers Post

De-Tariffing.contd.
VIII. Daily Allowance
In the event of the vehicle being sent to the Insurers
authorised Repairers for undertaking repairs arising out of
damages due to the operation of an Insured peril and where
the time taken for executing the repairs exceeds 3 days, the
Insurer will pay the cost of hired Transport upto 10 days
for partial loss claims and 15 days for TL/CTL claims

IX. Spot Assistance

This extension provides a number of emergency services
incurred within a radius of 100 kms. from the city where
the Insured resides. Services will include flat tyre/battery
/medical coordination /fuel assistance/towing services etc.

MOTOR CLAIMS

DRIVERS CLAUSE
-

Any person including insured:

Provided that a person driving holds an effective
driving licence at the time of accident and is not
disqualified from holding or obtaining such a
licence.
Provided also that the person holding an effective
learners licence may also drive the vehicle and that
such a person satisfies the requirement of Rule 3 of
the CMV Rules 1989.

LEARNERS LICENCE
PROVISIONS OF RULES 3 OF C.M.V RULES1989
While receiving instructions or gaining experience in
driving with the object of presenting himself for a
test of competence to drive so long as:
a)
such a person is the holder of an effective
learners
licence issued to him in Form 3 to drive
the Vehicle.

PROVISIONS OF RULES 3 OF C.M.V. RULES 1989

(Contd..)
b)

Such a person is accompanied by an instructor

holding an effective licence to drive the vehicle
and such instructor is sitting in such a position to
control or stop the vehicle and

c)

There is painted, in front and the rear of the

vehicle or on a plate or card affixed to the front
and the rear. The letter L in the red on a white
background as under.

CLAIMS PROCEDURE OWN DAMAGE

Condition 1: Notice shall be given in writing to the company
immediately upon the occurrence of any
accident and in the event of any claim.
Condition 3: The company may at its own option repair
reinstate or replace the vehicle or part
thereof and/or its accessories or may pay
in cash the amount of the loss or damage
and the liability of the company shall not
exceed:
For total loss / constructive total loss of the vehicle the
Insureds Declared Value (IDV) of the vehicle (including
accessories thereon) as specified in the Schedule less than
value of the wreck.

(b)

For partial losses, i.e. losses other than Total

Loss/Constructive Total Loss of the vehicle actual and
reasonable costs of repair and / or replacement of parts
lost/damaged subject to depreciation as per limits specified.

Condition 4: The Insured shall take all reasonable steps to

safeguard the vehicle from loss or damage and to maintain
it in efficient condition and the Company shall have at all
times free and full access to examine the vehicle or any part
thereof or any driver or employee of the insured. In the
event of any accident or breakdown, the vehicle shall not
be left unattended without proper precautions being taken
to prevent further damage or loss and if the vehicle be
driven before the necessary repairs are effected any
extension of the damage or any further damage to the
vehicle shall be entirely at the insureds own risk.

OWN DAMAGE CLAIMS

DOCUMENTS

Intimation
Claim form
Estimate of Repairs
Survey Reports
Final bill of repairs with satisfaction note by the
insurer
Cash receipt
Loss voucher

DOCUMENTS FOR VERIFICATION

Registration Certificate
Driving Licence
Police report if required
TOWING-

Cost of protection, removal to the nearest

repairer and re-delivery

MOTOR CLAIMS - Own Damage

TYPES OF LOSSES
Partial Loss
Total Loss
- Actual Total Loss
- Constructive Total Loss

- Theft of vehicle
Actual Total Loss
When the vehicle is totally damaged or fully burnt or damaged to
such an extent that it can not be repaired.

Constructive Total Loss

When the damaged vehicle can be repaired but repairs will not be
economical i.e. cost of repairs may be more than the actual value of
the vehicle. In practice, if the cost of Repairs exceeds 75% of IDV, the
loss will be settled on CTL basis

OWN DAMAGE CLAIMS PROCEDURE

AS PER POLICY PROVISIONS
The liability of the company shall not exceed:
A) For total loss / constructive total loss of the
vehicle the Insureds Declared Value (IDV)
of the vehicle (including accessories thereon)
less the value of the wreck.
B) For partial loss, i.e. loss other than Total
Loss/Constructive Total Loss of the vehicle
actual and reasonable costs of repair and / or
replacement of parts lost/damaged subject to
depreciation as per limits specified.

OWN DAMAGE CLAIMS DOCUMENTATION

Intimation of
Claim

Registration of Claim
and Issuance of
Claim Form

Submission of
Final Bills of repairs
Documents Verification
,and claim settlement
Appointment
of Surveyor,
Loss Assessment
and issue of
Survey Report

Submission of duly
filled Claim Form
alongwith Estimate
of Repairs

MOTOR CLAIMS - Own Damage

REPORTING

After an accident resulting in damage / loss to the

vehicle it has to be immediately reported to the
office.
The claim is registered and a claim form is issued
The claim form duly filled & signed by the insured
along with estimate of repairs has to be submitted to
the office.
- the insured is normally free to choose the repairer
where he would like to repair the vehicle.
Many Insurers are providing cashless facilities for
Private Cars/Two Wheelers,in which case,the
procedure gets modified

MOTOR CLAIMS - Own Damage

ASSESSMENT An independent automobile surveyor is appointed
to survey and assess the loss.
- In case the estimate is below Rs.20,000/- an inhouse surveyor may be appointed .
Surveyor inspects the vehicle, takes the photographs,
inspects the damages, discusses with the repairer the
cost of replacement of parts and labour charges and
submits his report.
After the survey is complete the repairer is
authorized to repair the vehicle.

MOTOR CLAIMS - Own Damage

SETTLEMENT After completion of repairs vehicle is re-inspected
A settlement is normally based on the recommendations
of the surveyor contained in the survey report.
The survey report is examined by the officer concerned
& claim is settled according to the terms & conditions
of the policy, taking into account
- the depreciation applicable
- Salvage
- Compulsory excess
- Additional excess , if any

OWN DAMAGE CLAIMS

DOCUMENTATION..contd.

DOCUMENTS REQUIRED

CLAIM INTIMATION LETTER

CLAIM FORM DULY FILLED & SIGNED
ESTIMATE OF REPAIRS
SURVEY REPORT
VALID DRIVING LICENCE
R.C. & T.C. BOOK OF THE VEHICLE
FITNESS CERTIFICATE ( COMMERCIAL VEHICLE)
PERMIT ( COMMERCIAL VEHICLE)
FIR &PANCHNAMA(COMM.VEH. & LOSSES OF PVT. CARS &
TWO WHEELERS WHERE THIRD PARTY IS INVOLVED )
FINAL BILLS OF SPARE PARTS & LABOUR CHARGES
SATISFACTION NOTE FROM THE INSURED,IN CASE THE
SETTLEMENT IS TO BE MADE DIRECTLY WITH THE REPAIRER

MOTOR CLAIMS - Own Damage

PAYMENT
Normally the insured is expected to make the
payment to the repairer and seek
reimbursement from the company.
However,
in
CASHLESS
FACILITY
GARAGES, the amount assessed by Surveyor
is directly paid to the repairers.

MOTOR CLAIMS - Own Damage

TOTAL LOSS CLAIMS
Before payment of claim on total loss basis following
to be collected
- R C & T C Book
- Ignition Keys
- Blank TO & TTO forms duly signed by the insured.
In case of THEFT CLAIMS
- Theft has to be reported to the police
- Documents to be submitted are
- Police Panchanama & FIR
- Final Investigation Report
-Report of the J.M.F.C.

MOTOR CLAIMS - Own Damage

THEFT CLAIMS
If documents are also stolen - duplicate to be
obtained by the insured and submitted to the
office.
Insured to file a non-use form with the RTO.
Letter of Subrogation to be obtained from the
insured.
RTO to be informed of settlement of claim of
a stolen vehicle.

OWN DAMAGE CLAIMS-SETTLEMENT

ASPECTScontd.
1.

2.

Non-Cashless Repair Claims: The Repair Bills are

scrutinised by the Final Surveyor before finalising the
assessment and provided D/L and Vehicular Documents are
in order, the Insurer will pay to the Insured, by Account
Payee Cheque,, the net amount of loss assessed by the
Surveyor subject to valid discharge.
Repair Claims on Cash Loss basis : In certain cases, it is
not possible for the Insured to repair the Vehicle either due
to Non-availibility of parts or paucity of Funds. Such
claims are settled on Cash loss basis wherein an amount of
15-25% is deducted from the net amount payable before
deduction of Salvage and Excess and the policy is
cancelled

OWN DAMAGE CLAIMS-SPECIAL FEATURES

RELATING TO THEFT CLAIMS
Procedure for Theft Claims:
Policy provides that Theft Claims must be reported to
Police. Hence, an FIR must be lodged in all cases and
FIR copy submitted alongwith the Claim Form.
Before payment of theft claim following documents must be
collected
- R C & T C Book
- Ignition Keys
- Blank TO & TTO forms duly signed by the insured
- FIR
- A-Final Summary or Interim Report from Police Authorities
-Letter of Subrogation

OWN DAMAGE CLAIMS-SPECIAL FEATURES

RELATING TO THEFT CLAIMS..contd.
THEFT CLAIMSadditional requirements if
RC/TC/DL and other documents are also stolen
1. Duplicate Documents to be obtained by the insured
and submitted to the office
2. Insured to file a non-use form with the RTO
3. Letter of Subrogation to be obtained from the
insured.
RTO to be informed of settlement of claim of a
stolen vehicle.

MOTOR CLAIMS TOTAL LOSS AND NET

LOSS CLAIMS

TOTAL LOSS CLAIMS

Where the vehicle is either beyond repairs or the cost of

repairs exceeds75% of IDV, the Surveyor will assess the loss
on Total Loss Basis

Before payment of claim on total loss basis, following documents

to be collected-- R C & T C Book
- Ignition Keys
- Blank TO & TTO forms duly signed by the insured.
-Claim Form
-Original Policy for Cancellation
NET LOSS CLAIMS

Where the Insured is interested in retaining the Salvage in a

Total Loss Claim, the Claim will be settled on Net Loss basis

CLAIMS PREOCEDURETHIRD PARTY

MACT
Lok Adalat

TWO TYPES OF LIABILITIES

NO FAULT LIABILITY - UNDER SECTION 140 OF MV

ACT 1988 NO FAULT LIABILITY IN CASE OF DEATH IS
RS.50,000/- AND RS.25000/- FOR PERMANENT
DISABLEMENT.
- NO FAULT MEANS THE CLAIMANT NEED NOT
PROVE NEGLIGENCE ON THE PART OF THE
DRIVER.NEGLIGENCE IS PRESUMED.
FAULT LIABILITY - UNDER SEC.166 OF MV ACT
ACTUAL LIABILITY AS DECIDED BY THE COURT.
NEGLIGENCE OF DRIVER HAS TO BE ESTABLISHED.
Examples of NegligenceDangerous/Reckless/Drunk
Driving, Parking of Vehicles on the Road in unsafe
condition, non-observance of Traffic Rules

MOTOR T.P. CLAIMS

Under Section 165 of MV Act 1988, state
government is empowered to set up one or
more Motor Accident Claims Tribunals.
(MACT) for each district.
Where MACT has been set up all Motor
Third party claims fall within the jurisdiction
of MACT only
For Death, Injury or Third Party property
damage petition has to be filed in MACT
having jurisdiction.

MOTOR T.P. CLAIMS

In No Fault Liability claims no defences are
available to the insurance company.
In claims under Sec.166 defences are available
to the insurance company as per section 149(2)
of MV Act ,1988.Examples- Use of Vehicle not as per Limitations as to use
clause.
- Breach of Permit
- No valid & effective driving license.
- Policy obtained by Non-disclosure of material
fact

MOTOR T.P. CLAIMS

DOCUMENTS REQUIRED
Vehicle Papers & Driving License
Police Report
Details of Drivers Prosecution, if any
Death Certificate, Coroners report, if any
(fatal claims)
Medical Certificate ( Bodily injury claims)
Details of age, income & number of
dependents.

CLAIMS PROCEDURE-THIRD PARTY

LIABILITY CLAIMS
MACT Procedure
Receipt of Notice of Claim from Insured/ Legal notice
from T.P.Claimant/Summons from MACT
2. Checking the 5-Ps viz.Policy/Person/Peril/Property/
Premium and ,if in order, registering the claim,
issuing the claim form. If O/D Claim is also reported,
keeping one set of the O/D claim papers in the T.P.
file
3. Appointment of Advocate by issuing Vakalatnama
and providing him with copy of Summons, alongwith
all supporting claims documents and D/L and Vehicle
Document verification report
1.

MOTOR THIRD PARTY CLAIMS

CONCEPT OF

1.
2.

DAMAGES -- MONETARY COMPENSATION

RECOVERABLE BY AN INJURED PARTY FROM THE
DRIVER/ INSURED OWNER OF THE VEHICLE
CAUSING THE DEATH/ INJURY BY THEIR
NEGLIGENCE IN THE USE OF THE VEHICLE IN A
PUBLIC PLACE .TWO TYPES OF DAMAGES---GENERAL DAMAGES-LOSS OF LOVE AND
AFFECTION/PAIN AND SUFFERING etc.
SPECIAL DAMAGES-CAPABLE OF MATHEMATICAL
EVALUATION /SUPPORTED BY BILLS,REPORTS etc.

CONTRIBUTORY AND COMPOSITE NEGLIGENCE

Contributory Negligence :
If the Injured Person through his negligence contributes to
the accident, the damages will be apportioned amongst the
negligent parties according to the degree of blame attaching
to each party. Thus, if his negligence is 40%,the Driver/
Insured/ Insurer will pay only 60% of the damages

Composite Negligence :

When more than one vehicle is involved in an accident in

which injuries/damages are caused to innocent Third
Partiese.g. passangers travelling in a bus involved in a
collision, pedestrians etc., the innocent Third Parties can
claim jointly and severally from both vehicle owners as
there is a composite negligence on their part

MOTOR T.P.CLAIMSLOK ADALAT

COMPROMISE SETTLEMENTWhere liability is clear and the company sees that

there are no defences available to it, the matter may
be compromised either through a consent award OR
in the Lok Adalat. The LOK ADALAT is -- An Institution of Legal Aid
Where liability is clear and the company has no
defences available ,matter is placed before Lok
Adalat for speedy and amicable settlement

Legal Aid Board organises Lok Adalats in each

district for speedy and amicable settlement of
claims.

MOTOR THIRD PARTY CLAIMS

CONCEPT OF GENERAL DAMAGES-LOSS OF LOVE
AND AFFECTION/PAIN AND
SUFFERING etc.
SPECIAL DAMAGES-CAPABLE OF
MATHEMATICAL EVALUATION
/SUPPORTED BY BILLS,REPORTS etc.
CONTRIBUTARY NEGLIGENCE
COMPOSITE NEGLIGENCE

THANK YOU