Motor Insurance, Burglary,
and Personal Accident
Professor -- IUBAT
Copyright © 2006 by The McGraw-Hill Companies, Inc. All
• Motor insurance got recently a great momentum.
• In the old times, persons who were injured or got killed by motor accident, for the negligence of the motorists,
could not get financial redress either to them or to their
legal heirs because no scheme of insurance was present
at that time.
• Vehicles for the purpose of insurance are classified
• Private: cars
• Commercial vehicles: passenger vehicle, cargo vehicle
• Motor cycles: scooters and motorcycles
Kind of Policies
• Act Liability Only: compulsory insurance in
regards to liabilities arising out of using motor
vehicle in a public place.
• Third Party Only: policy that covers a third
party who suffers less in connection with
damage of property and personal injury or
• Comprehensive Policy: policy that covers most
• This policy is designed to meet the
requirements of Motor Vehicle Act, 1939,
which provides for compulsory insurance in
regard to liabilities arising out of use of motor
vehicles in a public place.
• This kind of policy is limited to bodily injury or
death of the third parties.
Act Policy Cover Limits
• The policy covers any liability incurred in respect of anyone accident up to the following limit:
1) Goods Vehicle: up to Rs. 50,000
2) Passenger Vehicles: vehicles in which passengers are carried; 1) For hire or reward.
2) By reason of or pursuance of contract of employment.
In respect of persons other than passengers carried for hire or reward – Rs. 50,000 in all.
In respect of passengers,
Rs. 50,000 in all where the vehicle is registered to carry not more than 30 passengers. Rs. 75,000 in all where the vehicle is registered to carry not less 30 but not more than 60 passengers.
Rs. 100,000 in all where the vehicles are registered to carry more than 60 passengers.
3) Other Vehicles: the amount of liability incurred except as provided otherwise
2.Third Party Policy
• The policy covers the liability of a third party
who suffers less in connection with the
damage or property and personal injury or
• The policy indemnifies the insured against his
legal liability in respect of damage to property
of third parties over above 2,000.
Third Party Policy Limit
• The limit of liability is as follows:
a) Private car – unlimited.
b) Commercial vehicle;
a) Goods or passenger carrying vehicles – Rs. 20,000.
b) Other miscellaneous or special type of vehicles – Rs. 50,000.
c) Motor cycle – unlimited.
• The policy may be extended to include:
•) Legal liabilities to persons employed n connection with the operation and/or maintenance and/or loading and/or
unloading of motor vehicles.
• The comprehensive Policy covers the following risks;
Damage to a car or body
Removal charges for repairs
Third party liabilities
Costs and expenses incurred with risk
• At the payment of extra premiums, the following risks are also covered;
• Death or injury to family members who are above 16 years and bellow 65 years.
• Riots, strikes, thefs, larceny etc.
• Loss of rugs.
Procedures of Insurance
Issue of policy
Term of insurance
Additions of benefits
Change of vehicle
Settlement of claims
Negligence of the parties
• The proposal form is complete for making
proposal for motor insurance. The form is
divided into three parts;
1. Identification of vehicles – registered number,
horse power, size,...
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