Motor Insurance in India with Different Types of Motor Insurance

Find out types of Motor Insurance and factors effecting the premium, different types of Vehicle Insurance policies which may taken and coverage included…

Motor Insurance

Motor Insurance in India is mandatory for any vehicle (Excluding vehicles running on rails) designed to run on public places.

Types of motor vehicles

  1. Private Car
  2. Two wheeler
  3. Commercial vehicles

5 types are under Commercial vehicle segment

Goods carrying vehicles

  • Goods carrying other than 3 wheeled
  • Goods carrying 3 wheeled

Trailers

Any cart, other vehicle, agricultural implements, without self-propulsion pulled by any motor vehicle is called as trailer.

Passenger Carrying vehicles

  • 4 wheeled / 3 wheeled Passenger carrying vehicle carrying capacity not exceeding 6 passengers.
  • 4 wheeled Passenger carrying vehicle carrying capacity exceeding 6 passengers and 3 wheeled Passenger carrying vehicle carrying capacity exceeding 17 passengers.
  • 3 wheeled Passenger carrying vehicle carrying capacity should be >6 and <17 passengers.
  • 2 wheeler carrying passengers.

Miscellaneous vehicles

  • These special type of vehicles used for special purposes.
  • Some vehicles confines to specific sites, some are agriculture purpose.
  • Some vehicle used only special purposes / emergencies like Ambulances and Fire trucks

Trade Vehicles

  • Road transit risks
  • Road risks
  • Internal risks

Types of Motor Insurance

There are mainly 2 types of Motor Insurance

Liability Policy

This covers Third Party Liability for bodily injury/death or both and Property Damage.

  • Liability claims settled through courts.
  • Liability Policy should include Personal Accident Cover for Owner-Driver should included.

Package Policy/Comprehensive policy

Along with Liability cover Package policy/Comprehensive policy covers damage to the vehicle insured known as Own Damage cover. Package policy total 3 sections are there

Section I :Own damage cover to the Insured vehicle

Natural Calamities: Fire, Explosion, Self-ignition or Lightning, Earthquake, Flood, Hurricane,

Other Causes: Burglary, Theft, Riot, Strike, Malicious Act, Accident by external means, Terrorist Activity, Any damage in transit by road/rail/Inland waterway/Lift/Elevator or Air etc.

Section II :Third Party Legal Liability

Covers legal liability to accidental damage to person/property

Any permanent injury / death of a person or any damage caused to the property of a third party (TPPD)

Section III : Personal Accident Cover

Motor insurance provides compulsory Personal Accident cover for individual owner of the vehicle who has valid driving license.

PA cover available for Paid Driver, Occupants.

Note:

  • 5 years Liability policy or Bundled policy (First year package and remaining 4years liability policy)taken for Brand New two wheeler.
  • 3 years Liability policy or Bundled policy (First year package and remaining 2years liability policy) taken for Brand New Private cars.

Add On Covers in Motor Insurance

Add on covers should select on only package policies/Comprehensive policy. This are additional covers on own damage cover. Each company has their own names for the add-on covers. Some are

  • Nil depreciation cover or Bumper to bumper cover or Zero depreciation cover
  • Engine protect cover
  • NCB (No Claim Bonus) protect cover
  • Invoice Protect cover or Return to invoice cover
  • Consumable protect cover
  • Lock and Key protect cover
  1. What are the main risks in motor insurance?

    Mainly motor risks classified in to Natural Calamities including Act of God (AOG) perils and Other than Natural Calamities.

  2. What are the main Factors effecting Private Car Insurance Premium ?

    Private car Insurance premium mainly depends on Insured Declared Value,Geographical Zone,Cubic capacity of vehicle and Age of the vehicle.

  3. What are the main Factors effecting Commercial Vehicles Insurance Premium ?

    Commercial Vehicle Insurance premium mainly depends on Insured Declared Value, Geographical Zone, Cubic capacity / Horsepower of vehicle, Age of the vehicle, Gross vehicle weight (GVW) / Passenger carrying capacity.