CHAPTER 1 INTRODUCTION TO MOTOR INSURANCE APPLICATION OF BASIC PRINCIPLES
OF INSURANCE Q. Discuss the applicati! " p#i!ciple " i!su#a$le i!te#est u!%e# Mt# I!su#a!ce. The comp compet eten ency cy of a perso person n to effe effect ct a cont contra ract ct of A!s. The insura insurance nce is, inter inter alia, alia, deter determin mined ed by his legal legal pecun pecuniary iary rela relati tion onsh ship ip to the the subj subjeect matt matter er.. This This lega legall pecu pecun niary iary relationship is known as insurable interest. Insurable interest gives a person legal right to insure the subject matter. There are following three essentials of insurable interest : i) the the exis existtence nce of prop proper erty ty exp expos osed ed to to loss loss,, dama damag ge or a potential liability ii) such property or liability must be the subject matter of insurance ii) The insured must bear a legal pecuniary relationship to the subject subject matter so that he would benefit by its safety or would suffer financial loss in the form of physical damage or creation of liability because of its loss or damage. !oll !ollow owin ing g parag aragra raph phss sho show how how the the prin princciple iple of insurable interest is applicable in motor insurance: i nsurance: 1.Owner’s Insurable Interest in Vehicle " The motor vehicle which is the subject matter of motor insurance is exposed to loss loss by theft theft or dama damage ge due to an acci accide dent nt.. #uch loss loss or damage would cause financial loss to the insured. This entitles the owner to insure his vehicle against loss or damage. 2. Owner Owner’s ’s Insura Insurable ble Intere Interest st in Legal Legal Liabil Liability ity " $nder %otor &ehicle 'ct in the case of an accident due to negligent use of the vehicle the insured has a legal liability towards third parties. (e may may suffer financial loss if if he incurs such liability. liability.
*) This entitles the owner to insure his vehicle against third party risk. +ven if the vehicle is is not driven by the the insured and If the accident is caused due to negligence of the driver he is legally liable to third party for his negligent act. #o the uestion arises how the insured has insurable interest in the liability of the driv driver. er. 'lth 'lthou ough gh owne ownerr insu insure red d has, has, stric strictl tly y spea speakin king, g, no insurable interest in any such liability, he is deemed as having acted as an agent in arranging the indemnity on behalf of other persons who may drive the vehicle and incur liability. -therwise, the injured third parties will have no recourse to recover damages. This entitles the owner to insure his vehicle against third party risk. . Own wneer’s r’s Insu Insura rab ble Inte Intere resst offer ffereed by M. M.V V. Act %oreover under the reuirement of #ection /01 of the %otor &ehicles 'ct /233 no person shall allow any other person to use a vehicle in a public place unless the vehicle is covered by an insurance policy complying with the reuirements of the 'ct. This entitles the owner to insure his vehicle against third party risk. " If a vehicle is purchased 4. inancer’s Insurable Interest " under a hire purchase agreement, the finance 4ompany has an insurable interest in the vehicle until all the instalments are repa repaid id.. This This enti entitl tles es the the fina financ ncee 4omp 4ompan any y to insu insure re such such vehicle under motor policy. 1. !arage Owners’ Insurable 5arage -wners act Owners’ Insurable Interest 5arage as bail bailee ee for for cust custom omer ers6 s6 vehi vehicl cle. e. #o they have have insu insura rabl blee interest in respect of loss or damage to customers6 vehicle which are in their custody. Q. Mt# I!su#a!ce is a c!t#act " I!%e&!it'. Discuss 'ns. The principle principle of indemn indemnity ity reuires reuires that when a loss arises under an insurance policy, the loss must be made good in such a manner that financially the insured is neither better off nor worse off as the result of the loss. The object of this principle is to place the insured after a loss in the same
) pecuniary position as far as possible as he occupied immediately before the loss. The effect of this principle is to prevent the insured from making a profit out of a loss. %otor Insurance contracts are contracts of indemnity. The principle is applied to this insurance as under: total loss loss of the vehi vehicl cle, e, insu insure rers rs pay the the Ttal Lss " In total marke markett value value of the vehicle vehicle at the time time of loss loss or the sum sum insured whichever is less. Pa#tial Lss " In partial loss to the vehicle, the cost of repairs is paid paid,, but but if old old part partss are are repl replac aced ed by new, new, a suit suitab able le depreciation is charged on the the cost of new parts. (owever in case of motor cycles and private cars no such depreciation is applied. Insurers also reserve the option to repair or replace the vehicle or pay in cash. 8olicy cy inde indemn mnif ifie iess the the actu actual al Thi# Th i#% % Pa#t Pa#t' ' Lia$ Lia$il ilit' it' 7 8oli dama damage gess awar awarde ded d subj subjec ectt to the the limi limits ts of liab liabili ility ty,, if any, any, specified in the policy. 8olicy also indemnifies actual legal costs. Q. Discuss the applicati! " p#i!ciple " Ut&st (% Faith u!%e# Mt# I!su#a!ce. A!s. Applicati! " p#i!ciple " Ut&st (% ) In insurance contracts, the legal, doctrine of utmost good faith applies. This casts casts on the insured the duty to disclose disclose all material material facts that have a bearing on the insurance. ' breach of this duty may make the contract void or voidable depending upon the nature of the breach. The principle of utmost good faith is applicable to %otor Insurance in the same manner and with the same force as it is applicable to other classes of insurance. The insured is under the duty to disclose all material facts that have a bearing on the insurance. !or this purpose proposal form formss is used used.. In this this form form the insur insured ed submi submits ts vario various us material facts such as the type of vehicle, the geographical area area of use, use, the physic physical al condit condition ion of the driver driver,, the driving history and traffic convictions of the driver, past past loss loss
0) experience etc. There is a declaration clause in the form. The effect of declaration is that the answers given in the proposal become warranties. The answers are reuired to be literally true and correct. 'ny wrong answer, irrespective of its materiality, will render the contract voidable by insurers. Thus it converts the common law duty into a contractual duty of utmost good faith. (owever under compulsory third party insurance the doctrine is modified. #ection /02 of the %otor &ehicles 'ct places the duty upon Insurers to satisfy judgements and awards against persons insured in respect of third party risks. Q. Discuss i! $#ie" the applicati! " "ll*i!+ p#i!ciples i! Mt# I!su#a!ce, a- C!t#i$uti! $- Su$#+ati! c- P#i&ate Cause A!s. a- C!t#i$uti! " The principle of 4ontribution is applicable in contracts of indemnity. In motor insurance contribution arises when the same vehicle is insured under more than one policy. 'ccording to policy condition the loss is shared pro"rata between the insurers. $- Su$#+ati! "#ubrogation is the transfer of rights from the insured to the insurer on payment of loss under the policy. 9hen the loss or damage to the vehicle is caused by the negligence of another person the insured has legal rights to claim against such person. These rights pass to the insurers on payment to the insured. %otor policies provide a condition for subrogation before the payment of the claim. In practice subrogation is modified by nock for nock agreement amongst insurers. 'ccording to this agreement when there is a collision between two vehicles, one of, which is responsible for the accident the -; 4laim under policy <) shall be paid by insurer of the vehicle.
=) c- P#i&ate Cause ) 'ccording to he doctrine of proximate cause loss is payable if proximately caused by insured peril. This doctrine applies to motor insurance as to other classes of insurance. The loss or damage to the vehicle is payable only if it is proximately caused by on of the insured perils. The doctrine is also applicable to third party claims where in third party injury or property damage must be proximately caused by the negligence of the insured for which he is held legally liable to pay damages. CLASSIFICATION OF MOTOR /EHICLES Q. De"i!e Mt# /ehicle. Classi"' Mt# /ehicles "# the pu#pse " Mt# I!su#a!ce. A!s. De"i!iti! " Mt# /ehicle ) The %otor &ehicle 'ct defines >%otor &ehicle> as ? a mechanically propelled vehicle adapted for use upon roads ? whether power of propulsion is transmitted thereto from an external or internal source ? it includes a chassis to which a body has not been attached and a trailer ? but does not include a vehicle running upon fixed rails. Classi"icati! " Mt# /ehicles "# the pu#pses " i!su#a!ce !or the purposes of insurance, motor vehicles are classified into three broad categories, /.8rivate cars, *.%otor cycles @ #cooters and .4ommercial vehicles. 0. %iscellaneous and special Types of &ehicles 1. P#i0ate Ca#s 7 8rivate 4ars includes the following: (a) Vehicles used solely for social, domestic and pleasure purposes.
1) (b) Car of private type including station wagons, used for social, domestic and pleasure purposes and for the business or 8rofessional purposes of the insured. These may be used by the insured or his employees for such purpose but the carriage of goods other than samples is not permitted. $se of such vehicles for the following is exclude: i) (ire or reward ii) Aacing iii) 8acemaking reliability trial iv) #peed Testing v) !or any purpose in connection with the %otor Trade (c) Three wheeled cars including cabin scooters used for private purposes. .
Mt# C'cles 2 Scte#s 3 These i!clu%e the "ll*i!+ 0ehicles, i) %echanically propelled two wheelers with or without side car. ii) %echanically propelled three wheelers with engine capacity not exceeding =B cc. 4. C&&e#cial /ehicles " These include the following: 1- !oods "arrying Vehicles " %otor Tariff 4ategorises the 5oods 4arrying &ehicle as i) -wn 5oods 4arrier and ii) 5eneral 4artage 4arrier for rating purpose. 2# $railers % These include trucks, carts, carriages or other vehicles without means of self propulsion including agricultural implements drawn or hauled by self"propelled vehicle. &# Vehicles used for carrying 'assengers for hire or reward A i) 8assengers 4arrying &ehicles with 4arrying capacity upto 1 passengers. ii) Three wheelers with a carrying capacity between C D /C passengers.
C) iii) -ther vehicles with a carrying capacity over 1 passengers. ( i) Taxis or 8rivate 4ar Type &ehicles plying for public hire. ii) 8rivate Type Taxis let out on 8rivate (ire direct from the -wner with or without meters and driven by the -wner or an employee of the -wner. iii ) 8rivate 4ar type vehicles let out on 8rivate (ire and driven by the (irer or any driver with his permission. iv) 8rivate 4ar Type &ehicles owned by (otels and hired by them to their guests. " 8assenger 4arrying %otorised Aickshaws 5. Miscella!eus a!% Special T'pes " /ehicles 7 !ollowing are the few examples of vehicles in this category: i) 'gricultural Tractors 8edestrian 4ontrolled. ii) ;elivery Truck " 8edestrian 4ontrolled. iii) Trailers towed by Tractors. iv) 'mbulances. v) 4inema !ilm AecordingD 8ublicity &ans. vi) ;umpers. vii) !ire
'ct> Eiability. - F#& B Plic' " This covers F-wn ;amageF losses and F'ctF Eiability. It can also be extended to cover additional liabilities as provided in the Tariff, for example Increased Third 8arty 8roperty ;amage Eiability, 8ersonal 'ccident Aisk, etc.
3)
CHAPTER
LE(AL ASPECTS, THE MOTOR /EHICLES ACT8 19:: IMPORTANT DEFINITIONS BEARIN( ON MOTOR INSURANCE Q. De"i!e C!t#act Ca##ia+e a!% Sta+e Ca##ia+e a!% +i0e the %isti!cti! $et*ee! the&. A!s. C!t#act Ca##ia+e 7 The %.&. 'ct defines 4ontract 4arriage as a motor vehicle which carries passengers) for hire or reward and is engaged under a contract, ? whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein, and ? entered into by a person holding a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or agreed rate or sum on i) a time basis, or ii)from one point to another, and, in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey. 4ontract 4arriage includes a maxicab and a motorcab. Sta+e Ca##ia+e 7 The %.&. 'ct defines #tage 4arriage as a motor vehicle constructed or adapted to carry more than six passengers excluding the driver for hire or reward at separate fares paid by or for individual passengers either for the whole journey or for stages of the journey. Disti!cti! $et*ee! C!t#act Ca##ia+e a!% Sta+e Ca##ia+e" The contract carriage is engaged for the whole of the journey between two points for carriage of a person or persons hiring it. It cannot pick up other passengers en route.
2) 9here as the stage carriage runs between two points irrespective of any prior contract, and it can pick up passengers en route who pay the fare for the distance they propose to travel. Q. De"i!e the "ll*i!+, a- (#ss /ehicle 6ei+ht $- (%s Ca##ia+e c- Li+ht Mt# /ehicle %- Maica$ e- Mt#ca$ "- P#i0ate Se#0ice +- Pu$lic Se#0ice h- Pu$lic Place A!s. a- (#ss /ehicle 6ei+ht ) 5ross &ehicle 9eight means in respect of any vehicle, the total weight of the vehicle and load certified and registered by the Aegistering 'uthority as permissible for the vehicle. $- (%s Ca##ia+e " 5oods 4arriage means only motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. c- Li+ht Mt# /ehicle " Eight %otor &ehicle E%&) means a transport vehicle or omnibus, the gross vehicle weight 5&9) of either of which or a motor car or a tractor or road roller, the unladden weight of any of which does not exceed C,=BB gs. %- Maica$" %axicab means any motor vehicle constructed or adapted to carry more than six, passengers, but not more than. twelve passengers, excluding the driver, for hire or reward. e- Mt#ca$ " %otorcab means any motor vehicle constructed or adapted to carry not more than six passengers, excluding the driver, for hire or reward. "- P#i0ate Se#0ice /ehicle " 8rivate #ervice &ehicle means
/B) motor vehicle constructed or adapted to carry more than six persons, excluding the driver, and ordinarily used for the purpose of carrying persons for, or in connection with, his trade or business otherwise than for hire or reward, but does not include a motor vehicle used for public purposes. +- Pu$lic Se#0ice " 8ublic #ervice &ehicle means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a maxicab, a motorcab, contract carriage and stage carriage. h- Pu$lic Place " 8ublic 8lace means a road, street, way or other place whether thoroughfare or not, to which the public have a right of access, and includes any place or stand at which passengers are picked up or set down by a stage carriage. Q. Discuss the "ll*i!+ a- Pe#i% # cu##e!c' " %#i0i!+ lice!ce $- Classi"icati! " (%s Ca##'i!+ /ehicles $ase% ! (/6 A!s. a- Pe#i% # cu##e!c' " %#i0i!+ lice!ce " i# $rans'ort )ehicle carrying dangerous goods- Eicence to drive a transport vehicle carrying goods of dangerous @ haGardous nature, the license shall be effective for a period of one year and renewal thereof shall be subject to the condition that the driver undergoes one day refresher course of the prescribed syllabus. ii# Other trans'ort Licences " -ther transport licences are valid for years. iii# *ri)ate "ars " In case of private cars, earlier, driving licence used to be valid upto *B years till a person attains age of 0B years. How, as per amendment, the driving licence of persons above the age of =B years would be renewed for a period of = years at a time on payment of prescribed fees. $- Classi"icati! " (%s Ca##'i!+ /ehicles $ase% ! (/6"
E%& %%& (5&
//) " $pto 5&9 C,=BB gs. " 5&9 C,=BB gs. To /*,BBB gs. 5&9 above /*,BBB gs.
Necessit' F# C&puls#' Thi#% Pa#t' I!su#a!ce Q. 6h' the#e is c&pulsi! F# Thi#% Pa#t' I!su#a!ce " a Mt# /ehicle7 6hat ee&pti!s a#e p#0i%e% $' the M./. Act7 A!s. Necessit' F# C&puls#' Thi#% Pa#t' I!su#a!ce " The law has made it obligatory that no motor vehicle shall be used without a third party insurance. #ection /01 of the %otor &ehicles 'ct, /233 provides that no person shall use except as a passenger, or allow any other person to use, a motor vehicle in a public place, unless the vehicle is covered by a policy of insurance complying with the reuirements of the 'ct. 's per 'mendment 'ct /220 an additional duty is caste upon the owner of the vehicle carrying dangerous or haGardous goods for a policy of insurance under the 8ublic Eiability Insurance 'ct , /22/. This is to protect members of public travelling in vehicles or using the roads against motor vehicles accidents. ' 4ourt can only pass an award or decree for compensation. It cannot ensure actual payment, because the person held liable may be insolvent or may not have sufficient resources to meet the award. To overcome the situation, the law has made it obligatory that no motor vehicle shall be used without a third party insurance. Ee&pti! "#& C&puls#' Thi#% Pa#t' I!su#a!ce 3 following vehicles are exempted from compulsory third party insurance: i) any vehicle owned by the 4entral 5overnment or a #tate 5overnment and used for 5overnment purposes unconnected with any commercial enterprise. ii) exemption may also be granted by the appropriate 5overnment for any vehicle owned by: a) the 4entral 5overnment or a #tate 5overnment if the
/*) vehicle is used for 5overnment purposes connected with any commercial enterprise: b) any local authority c) any #tate Transport undertaking. (owever, the above exemption is made only if a fund is established and maintained by that authority for meeting any liability arising out of the use of any vehicle. The fund has to be established in accordance with the Aules framed under the 'ct. Re;ui#e&e!t " Plicies Q. 6hat a#e the #e;ui#e&e!t u!%e# M./. Act " a plic' " i!su#a!ce issue% "# a &t# 0ehicle7 Me!ti! the li&its " lia$ilities #e;ui#e% t $e c&puls#il' c0e#e%. A!s. The policy of motor insurance is reuired to be issued by an Fauthorised insurer. #ection /0C of the %otor &ehicles 'ct, /233 reuires that the policy of insurance must provide cover: i) against any liability which may be incurred by the insured in respect of death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the carriage, or ii) damage to any property of a third party or iii) against death or bodily injury to any passenger of a public service vehicle, caused by or arising out of the use of the vehicle in a public place. The policy, however, shall not be reuired to cover: i) any contractual liability or ii) any liability in respect of death arising out of and in the course of employment of the employee of the Insured, or in respect of bodily injury sustained by such employee arising of out of and in the course of his employment. The policy must however cover liability arising under the 9orkmenFs 4ompensation 'ct, /2* in respect of death or bodily injury to any such employee a) engaged in driving the vehicle, or b) engaged as conductor or ticket examiner in a public service
/) vehicle, or c) if it is a goods carriage, being carried in the vehicle. T#a!s"e# " Ce#ti"icate " I!su#a!ce Q. 6hat a#e the p#0isi!s u!%e# M./. Act #e+a#%i!+ T#a!s"e# " Ce#ti"icate " I!su#a!ce7 A!s. " #ection /=C of the %.&. 'ct /233 provides that where a person in whose favour a 4ertificate of Insurance has been issued, transfers to another person the ownership of the motor vehicle in respect of which the insurance was taken, then the 4ertificate of Insurance and the relative 8olicy shall be automatically deemed to be transferred in favour of the new owner from the date of transfer of ownership of the vehicle. #uch deemed transfer shall include transfer off rights and liabilities of the said 4ertificate of Insurance and 8olicy of Insurance. The transferee should apply within /0 days from the date of transfer on the prescribed form to the insurer for making the necessary changes in the 4ertificate of Insurance and in the 8olicy, and the insurer is obliged to make such changes in the said documents to give effect to the transfer of insurance. Dut' " I!su#e#s t satis"'
/0) " The 'ct provides De"e!ces a#e a0aila$le t i!su#e#s certain rights and defences to the insurers to resist third party claims.
/=) The 'ct, however, provides that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the 8olicy by virtue only of this proviso shall be recoverable by the insurer from that person. Ri+hts " Thi#% pa#ties a+ai!st I!su#e#s ! I!sl0e!c' " the I!su#e% a!% E""ect " Death " I!su#e% Pe#s! Q. 6hat a#e the #i+hts " Thi#% pa#ties a+ai!st I!su#e#s ! I!sl0e!c' " the I!su#e%7 A!s. #ection /=B %otor &ehicles 'ct, /233 provides for the rights of third parties in the event of the insolvency of the insured or in the event of winding up when the insured is a 4ompany. The 'ct provides that if, either before or after that event, any third party liability is incurred by the insured, his rights against the insurer under the 8olicy are transferred to the third party to whom the, liability was incurred. 9hen such transfer takes place, the insurer will be under the same liability to the third party as he would have been to the insured person, but i) if the liability of the insurer to the insured person exceeds the liability of the insured person to the third party, the insured personFs rights against the insurer in respect of the excess are not affected. ii) if the liability of the insurer to the insured person is less than the liability of the insured person to the third party, the rights of the third party against the insured person in respect of the balance are not affected. In the event of an Insured becoming insolvent or making arrangements with his creditors if a company, being wound up) the rights of the Insured under the 8olicy will be transferred to and vest in the injured third party. In other words the injured third party is able to recover compensation direct from the Insurers. Q. 6hat is the e""ect " Death " I!su#e% Pe#s! ! a thi#%
/1) pa#t' clai&7 A!s. #ection /== of /233 'ct provides that if the insured person dies after incurring third party liability, then the cause of action survives against the insuredFs estate, or legal heirs or against the insurer. If this provision was not made, then the third partyFs right of action against the negligent owner of the vehicle would die with the death of the owner. Mt# Acci%e!ts Clai&s T#i$u!als Q. 6#ite a! essa' ! Mt# Acci%e!ts Clai&s T#i$u!als. A!s. ) i- C!stituti! " MACT " #ection /1= of %otor &ehicles 'ct, /233 provides for the constitution of the %otor 'ccident 4laims Tribunal by different #tate 5overnments for the purpose of speedy disposal of third party claims at a minimum cost. #uch tribunals are presided over by a person of the rank of a ;istrict judge or (igh 4ourt udge. ii- P#ce%u#e a!% P*e#s " MACT 7 #ection /12 provides that where any 4laims Tribunal has been constituted for any area, the 4ivil 4ourts have no jurisdiction to entertain any uestion relating to claims for motor accident claims compensation. The 4laims Tribunals have all the powers of a civil court for the purpose of taking evidence on oath, enforcing the attendance of witnesses and of compelling the discovery and production of documents, etc. The %otor 'ccident 4laims Tribunals have exclusive jurisdiction to decide the claims with regard to death, personal injury as well as damage to third party property, irrespective of the amount involved in the property damaged. iii- Applicati! "# C&pe!sati! 7 'ccording to #ection /11 of %otor &ehicles 'ct, /233 an application for compensation arising out of an accident may be made: a) by the person who has sustained the injury or b) by the owner of the property c) where the death has resulted from the accident, by the legal representatives) of the deceased or d) by any agent duly authorised by the person injured.
/C) 'pplication has to be made to the 4laims Tribunal having jurisdiction over the area in which the accident occurred, or to the claims tribunal within the local limits whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides. The application shall be in such form and shall contain such particulars as may be prescribed. i0- Opti! #e+a#%i!+ clai&s "# c&pe!sati! i! ce#tai! cases " ' claim for compensation under the %otor &ehicle 'ct and also under the 9orkmenFs compensation 'ct, /2* the person entitled to compensation may claim such compensation under either of these 'cts but not under both. 0- A*a#% " the Clai&s T#i$u!al " #ection /13 defines the duty and obligation of the 4laims Tribunal to give prior notice of the third partyFs application for compensation to the Insurers as also giving opportunity to the Insurers of being heard. The 4laims Tribunal makes an award determining the amount of compensation, which appears to it to be just. The tribunal can award simple interest at such rates as it thinks fit, to be paid along with the award for compensation. 9hen 'ward is made the udgment debtor shall deposit the entire amount awarded with B thirty) days of the announcement of the 'ward. 0i- I&plea%i!+ I!su#e# i! ce#tai! cases 3 'ccording to #ection /CB where in the course of an inuiry, the 4laims Tribunal is satisfied that a) there is collusion between the person making the claim and the person against whom tfi1 claim is made that is, there is collusion between the claimant and insured ), or b) the person against whom the claim is made, has failed to contest the claim, it may direct that the concerned Insurer be impleaded as a party to the proceedings. The Insurer so impleaded shall thereupon have, without prejudice to the provisions contained in #ection /02 *), the right to contest the claim on all or any
/3) of the grounds that are available to the person against whom the claim has been made. 0ii- Appeals " 'ny person aggrieved by an award of a Tribunal may, within ninety days from the date of the award, prefer an appeal to the (igh 4ourt. Ho appeal by the person who is reuired to pay the amount shall be entertained unless he deposits with the (igh 4ourt As. !""" or !"# of the awarded amount, whichever is less. The (igh 4ourt may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time. 'ccording to #ection /C no appeal is permissible if the amount in dispute is less than As. /BBBB. Q. Discuss the "eatu#es " p#0isi! #e+a#%i!+ lia$ilit' *ithut "ault u!%e# the M./. Act. A!s. N Fault Lia$ilit' " #ection /0B of %.&. 'ct, /233 provides for Eiability without !ault. !ollowing are the feature of this provision " i# ,trict Liability " This is a strict liability. The claimant involved in a motor vehicle accident is not reuired to prove wrongful act, neglect, or default i.e. negligence) on the part of the owner of the vehicle or by any other person. The claim under these provisions is not defeated or affected in any way, by my wrongful act, neglect or default on the part of the claimant nor can be uantum of compensation be reduced on the basis of the claimantFs share of responsibility for the accident. In other words, the legal defence of Fcontributory negligenceF is not available to the motorist and his insurers. ii# A''lication of *ro)ision " these provisions apply in cases where the claimant suffers death or permanent disablement. iii# Aounts of "o'ensation " The amounts of compensation are fixed as follows: ;eath, As. =BBBB, and 8ermanent ;isablement As. *=BBB.
/2) i)# Obect of the 'ro)ision " The object behind the no"fault principle is to get minimum statutory relief expeditiously to the victim of the road accident or his legal representative. Q. 6hat is Pe#&a!e!t Disa$le&e!t "i# the pu#pse " N) "ault Lia$ilit'7 A!s. Pe#&a!e!t Disa$le&e!t 7 'ccording to #ection /0* permanent disablement shall mean injury or injuries involving a) permanent privation of the sight of either eye or the hearing of either ear, or privation of any member or joint or b) destruction or permanent impairing of the powers of any member or joint or c) permanent disfiguration of the head or face. Hit a!% Ru! Acci%e!t Q. 6#ite a sh#t !te ! Hit a!% Ru! Acci%e!t A!s. Hit a!% Ru! Acci%e!t " (it and Aun 'ccident is a motor accident arising out of the use of a motor vehicle or motor vehicles the identity whereof cannot be ascertained in spite of reasonable efforts for the purpose. #ection /1/ of the %.&.'ct. provides for payment of following compensation for such accidents: i) ;eath " As. *=BBB ii) 5rievous hurt " As. /*=BB 's per the new %.&. 'ct, the payment of 4ompensation shall be made by 5.I.4. and its subsidiaries. Q. 6hat is +#ie0us hu#t u!%e# M./. Act "# the pu#pse " c&pe!sati! u!%e# hit a!% #u! acci%e!t7 A!s. (#ie0us Hu#t " 'ccording to #ection /1/ grievous hurt shall have the same meaning as in the Indian 8enal 4ode. #ection *B of the Indian 8enal 4ode has designated the following kinds of hurt as grievous: i) +masculation ii) 8ermanent privation of the sight of eye. iii) 8ermanent privation of the hearing of either ear.
*B) iv) 8rivation of any member or joint. v) ;estruction or permanent impairing of the powers of any member or joint. vi) 8ermanent disfiguration of the head or face. vii) !racture or dislocation of a bone or tooth. viii) 'ny hurt which endangers life or which causes the sufferer to be during the space of twenty days in severe bodily pain or unable to follow his ordinary pursuits. C&pe!sati! ! St#uctu#al F#&ula Basis Q. 6hat is St#uctu#al "#&ula Basis " c&pe!sati! t #a% acci%e!t 0icti&s7 H* the c&pe!sati!s a#e %ete#&i!e% u!%e# this p#0isi! " M./. Act7 A!s. C&pe!sati! ! St#uctu#al F#&ula Basis " #ection /1 ') of %.&. 'ct has introduced a new provision for payment of compensation to road accident victims on #tructural !ormula
*/) of the expenses which the victim would have incurred towards maintaining himself, had he been alive. It is provided that the amount of such compensation shall not be less than a specified amount at present As. =B,BBB) multiplier> applicable to the age on the date of determining the compensation, or In case of permanent partial disablement, such percentage of compensation which would have been payable in the case of permanent total disablement as specified in the above item.
**)
CHAPTER 4
LO> ADALAT 2 LO> N?A?ALA?A AND
*) concerned insurer calling upon them to be present in the Eok 'dalat on the appointed date and time. iii# "o'roise " +fforts are made to bring the parties to a fair compromise without coercion or forces and the agreement arrived at is reduced in writing on the prescribed form. i)# ,ubission of co'roise eo to the concerned "lais $ribunal " The compromise memo is submitted to the 4laims Tribunal for passing the final order and apportionment of the compensation in terms of the settlement. )# *ayent " The insurers are reuired to deposit the cheue for the amount agreed with %'4T within specified time from the date of the agreement to settle. 's per current guidelines of 5.I.4., only those cases where claim made to %'4T is upto As. =BBBBB are to be considered in the Eok 'dalat sessions. A%0a!ta+es " L@ A%alat Settle&e!ts " #ettlement of T.8. 4laims in the Eok 'dalat is advantageous to insurance companies for the following reasons: a) the insurers get an opportunity to clear up a large backlog of motor claims cases b) the claim is deemed have been settled once and for all and there is no further litigation by way of appeal to the higher 4ourts c) speedy settlement gives satisfaction to third party as well as to the insured. d) serves as a means of good publicity, good name and prestige to the insurance company.
*0) was introduced by 5eneral Insurance 4orporation of India with effect from /0th %arch. /22*. This is a 8re"litigation #cheme for settlement Third 8arty %otor Insurance 4laims for motor accident victims. It provides uick payment of compensation to victims of road accidents without their adopting legal proceedings. In Eok 'dalat only cases pending before %'4T are taken up for compromise settlement, whereas under the alad Aahat Kojana injured persons or legal heirs of the victims need not have to go to %'4T at all. 4ases can be straightaway taken to this forum. The p#ce%u#e 7 !or disposal of T.8. 4laims a panel consisting of following persons is constituted: i) a retired udge, ii) a medical practitioner and iii) a retired executive of an insurance company having sound knowledge and clear understanding of motor accident claim cases. This panel jointly examines individual cases on a regular basis on certain specified time and terms and offer compromise settlement of claims. If the parties accept such offers, settlement can be promptly finalised. In the initial stage, the #cheme applies to Hon"fatal bodily injury claims of road accident victims above /3 years of age. It covers both >fault> and >no"fault> liability claims. To settle any claim under this scheme the claimants6 application is to be supported by the following documents: a) 4opy of !irst Information Aeport lodged with the 8olice. b) Aegistration number and Insurance particulars of offending vehicle. c) %edical certificates in support of claim. d) %edical bills and hospital records. e) 8roof of age and income. f) 8assport siGe photograph of victim.
There is no mention of any time limit for lodging claims
*=) under the #cheme. (owever some time limit ought to be set keeping in view the statutory limit under the %otor &ehicles 'ct. Be!e"its " the Sche&e " The ald Aahat Kojana offers following benefits to public: i# o 3'enses’ and Litigation ree 5eedy 7 This is a litigation free remedy to get compensation for road accidents. The claimant is not reuired to incur any expenses on 4ourt fees and lawyer6s fees. The claimant is of course free to take assistance from lawyers. ii# 3arly and easy settleent 7 the scheme provides settlement of claims within shortest possible time of * to months. iii# O'tion o'en to go to MA"$ 7 #ettlement is not binding under this scheme. If the claimant is not satisfied with the compensation offered, the offer can be rejected and the claimant can go to %'4T for getting compensation. iii# 6ust and fair assessent of clais "The scheme offers a just and fair assessment of claims as it is done by independent panels of retired judges, medical practitioners and retired insurance executives. #ettlement of T.8. 4laims under this scheme is advantageous to insurance companies for the following reasons: a) the insurers get an opportunity to clear up cases without going for litigation. If many claims get settled through this machinery, it is felt that smaller number of cases will go to %'4T 4ourts. b) the claim is deemed have been settled once and for all and there is no further litigation by way of appeal to the higher 4ourts c) speedy settlement gives satisfaction to the insured. d) serves as a means of good publicity, good name and prestige to the insurance company.
*1)
CHAPTER 5
MOTOR POLICIES Plic' A a!% Plic' B Q. 6hat is the %i""e#e!ce $et*ee! Mt# Plic' A a!% Plic' B7 A!s. India %otor Tariff provides for following two types of policies: Plic' A " 8olicy J'6 covers liability to public risks as reuired under the %.&.'ct. In this type of Insurance the loss@ damage to the %otor &ehicle itself, generally known as Fown damageF is not covered. Plic' B " 8olicy F
Scpe " Sta!%a#% F#& "# A Plic' Q. Discuss the c0e# p#0i%e% $' Mt# Plic' A. A!s. " 8olicy ' is issued in a #tandard !orm which is uniformly applicable to all above classes of vehicles.
*C) Scpe " C0e# ) Lia$ilit' t Thi#% Pa#ties 7 The policy provides: /) #ubject to the limit of liability as laid down in the %otor &ehicles 'ct, /233, the Insurance 4ompany will indemnify the Insured in the event of accident arising out of the use of the motor vehicle anywhere in India, against all sums, including claimantFs costs and expenses, which the Insured shall become legally liable to pay in respect of i) death of or bodily injury to any person, and@or ii) damage to any property of third party. *) The 4ompany will also pay all costs and expenses incurred with its written consent. ) The 4ompany will indemnify any driver who is driving the insured motor vehicle on the insuredFs order or with his permission. 0) In the event of the death of any person entitled to indemnity under the policy, the 4ompany will indemnify his legal representatives in terms of and subject to the limitations of the policy. =) The 4ompany may at its own option " ') arrange for representation at any Inuest of !atal Injury in respect of death which may be the subject of indemnity, and <) undertake the defence of proceedings in any 4ourt of Eaw in respect of any liability which may be the subject of indemnity under policy. Q. Eplai! the "ll*i!+ clauses u!%e# Mt# Plic' A, a- Applicati! " Li&its " I!%e&!it' $- A0i%a!ce " ce#tai! te#&s a!% Ri+ht " Rec0e#' A!s. a- Applicati! " Li&its " I!%e&!it' " In the event of any accident involving indemnity to more than one 8erson, any limitation of the amount of any indemnity shall apply to the aggregate amount of indemnity to all persons indemnified and such indemnity shall apply in priority to the Insured.
*3) $- A0i%a!ce " ce#tai! te#&s a!% Ri+ht " Rec0e#' " The %otor &ehicles 'ct provides that the judgement obtained against insurers shall not be defeated by the incorporation of exclusion clauses in the policy other than those authorised by #ection /02 of the 'ct. 'll motor policies therefore contain a clause called >'voidance of certain terms and right of recovery> reading as under: >Hothing in this policy or any endorsement hereon shall affect the right of any person to recover an amount under or by virtue of the provision of the %otor &ehicles 'ct.
Q. 6hat a#e the (e!e#al Ecepti!s u!%e# Mt# Plic' A7 A!s. !ollowing are the 5eneral +xceptions under %otor 8olicy ': /) The Insurer shall not be liable for any claim arising whilst the, motor vehicle is a) being used otherwise than in accordance with Eimitation as to $se, or b) being driven by any person other than a driver as stated in ;riverFs 4lause. *) There is no liability in respect of any claim arising out of any contractual liability. ) +xcept in so far as is necessary to meet the reuirements of the %otor &ehicles 'ct, the Insurance 4ompany shall not
*2) be liable for death or bodily injury arising out of and in the course of employment of a person in the employment of the Insured or in the employment of any person who is indemnified under the 8olicy. 0) +xcept so far as is necessary to meet the reuirements of the %otor &ehicles 'ct, the 4ompany shall not be liable in respect of death or bodily injury to any person other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the motor vehicle at the time of occurrence of the event out of which any claim arises. =) 9ar and allied perils. 1) Huclear Aisk.
P#i0ate Ca# B Plic' Q. Desc#i$e the c0e# ""e#e% $' Secti! I " P#i0ate Ca# Plic' B a!% eclusi!s applica$le t this secti!. A!s. Ris@s C0e#e% u!%e# Secti! I ) Lss # Da&a+e " P#i0ate Ca# Plic' B 3 This section is also known as J-wn ;amage6 #ection. It provides indemnity to the Insured against loss or damage to the insured %otor 4ar and@or its accessories whilst thereon: a) by fire, explosion, self"ignition or lightening b) by burglary, housebreaking or theft c) by riot and strike d) by earthuake fire and shock damage) e) by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost f) by accidental external means g) by malicious act h) by terrorist activity i) whilst in transit by road, rail, inland waterway, lift, elevator or air j) by landslide @ rockslide.
B) P#tecti! a!% Re&0al Csts " If the motor car is disabled by reason of loss or damage covered under the policy, the insurer will bear reasonable cost of protection and removal to the nearest repairers and of redelivery to the insured but not exceeding in all As. /,=BB@" in respect of any accident. Auth#isati! "# Repai# " The insured may authorise repairs necessitated by damage covered under the policy, provided that : a) the estimated cost of such repairs does not exceed As. =BB@" b) the insurer is furnished forthwith a detailed estimate of the cost, and c) the insured gives the insurer every assistance to see that such repair is necessary and the charge reasonable. Eclusi!s u!%e# Secti! I ) The insured will not be liable to make any payment for the following: a) conseuential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures and breakage. b) damage to tyres unless the motor car is damaged at the same time when the liability of the insurer is limited to =BM of the cost of replacement. c) any accidental loss or damage suffered whilst the insured or any person driving with the knowledge and consent of the insured is under the influence of intoxicating liuor or drugs. Q. Eplai! the "ll*i!+ u!%e# Mt# Ca# Plic' B, a- Lss t Access#' $- C!se;ue!tial lss c- Mecha!ical B#ea@%*!
A!s. a- Lss t Access#' " The parts which are directly supplied by the manufacturer along with the car, but are not essential for the running of the motor car, are considered as accessories. The engine of a car, is an essential part for the running of the vehicle. #o it is not an accessory. 9hereas
/) a taximeter will be considered as an accessory of a taxi cab because the vehicle can run without it. Eoss or damage of accessories are covered only if the accessories are on the motor car. !or example, the stepny is removed from the car and kept separately in a garage from where it is stolen, the loss will not be covered by the policy. 'ccessory should be distinguished from +xtra !ittings. Aadios, tape recorders, air conditioners and other electric or electronic items, etc. which are fitted on the motor cars are not accessories. They will be considered as extra fittings and will not be covered unless they are separately described and valued in the #chedule of the 8olicy. $- C!se;ue!tial Lss " The policy covers only direct loss caused by an accident to the car and not the conseuential loss. The insured may suffer loss of use of the car during repairs in the form of cost and expenses of alternate transportation. This is a conseuential loss which is not covered. c- Mecha!ical B#ea@%*! 7 The policy does not cover mechanical or electrical breakdown, failures, breakages. The reason being they are associated with wear and tear. (owever, subseuent damage following mechanical breakdown is covered. If the steering rod breaks and causes an accident resulting in damage to the car, claim in respect of breakage in steering is not payable, but subseuent damage to the car is accidental damage and claim in respect of that will be admissible. Q. Desc#i$e the c0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties " P#i0ate Ca# Plic' B. A!s. C0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties " P#i0ate Ca# Plic' B 3 This #ection provides the following coverage: 1. Liability to $hird *arty " This section provides indemnity to the insured in the event of accident caused by or arising out of the use of the motor car against all sums, including
*) claimantFs cost and expenses, which the insured shall become legally liable to pay in respect of i) death or bodily injury to any person, including occupants carried in the motor car, provided such occupants are not carried for hire or reward. This does not cover the employees of the insured as the risk falls under the 9orkmenFs 4ompensation insurance policy. (owever, as reuired by the %otor &ehicles 'ct, workmenFs compensation liability towards a paid driver is covered under this section. ii) damage to property other than property belonging to the insured or held in trust or in the custody or control of the insured. 2. Legal costs and e'enses " The insurer will also pay all legal costs and expenses incurred with its written consent. &. Indenity to dri)er " The indemnity under this #ection is available to any driver who is driving the motor car or with his permission, provided that such driver shall as though he were the insured observe, fulfill and be subject to the terms, exceptions and conditions of the policy in so far as they can apply. Li&its " Lia$ilit' $nder #ection" II" / i) " 's per %otor &ehicles 'ct, /233 The 'ct provides for unlimited liability in respect of third party death or bodily injury). $nder #ection" II" / ii)As. 1,BBB@" in respect of any one claim or series of claims arising out of one event. !or third party property damage the limit provided is that reuired by the 'ct . The tariff however provides for increased limits upto unlimited liability for T.8. property damage, on Q. 6hat a#e the +e!e#al ecepti!s u!%e# P#i0ate Ca# Plic' B *hich a#e applica$le t $th the secti!s " the plic'.
) A!s. ) (e!e#al Ecepti!s ) 8rivate 4ar 8olicy < is subject to certain general exceptions which are applicable to both the sections of the policy. 'ccording to these exceptions the Insurer shall not be liable in respect of the following: /) 'ny accident, loss, damage or liability caused, sustained or incurred outside the 5eographical 'rea described in the 8olicy. *) 'ny claim out of any contractual liability. ) 9hilst the insured vehicle is " i) being used otherwise than in accordance with the limitations as to $se. ii) being driven by any person other than a ;river as stated in the ;riverFs 4lause. 0) Huclear risks =) 'ny accident, loss, damage or liability directly or indirectly arising from nuclear weapons material. 1) 9ar and 'llied 8erils. Q. Discuss the "ll*i!+ u!%e# P#i0ate Ca# Plicies, a- Li&itati!s as t Use u!%e# P#i0ate Ca# Plic' $- D#i0e#s Clause A!s. a- Li&itati!s as t Use u!%e# P#i0ate Ca# Plic' 3 This clause under the policy reads as under: >$se only for social, domestic and pleasure purposes and for the InsuredFs own business. The 8olicy does not cover the use for hire or reward or for organised racing, pacemaking, reliability trials, speed testing, the carriage of goods other than samples) in connection with any trade or business or use for any purpose in connection with %otor Trade.> $- D#i0e#s Clause ) This clause under the policy reads as under: ;river: 'ny person including Insured " 8rovided that the person driving is holding an effective driving licence at the time of accident and is not disualified from holding or obtaining such a licence 8rovided also that the
0) person holding an effective learnerFs license may also drive the vehicle and such a person satisfies the reuirements of Aule of the 4entral %otor &ehicles Aules, /232. C!%iti!s " the Plic' Q. 6hat a#e the c!%iti!s u!%e# P#i0ate Ca# Plic' B7 A!s. Fll*i!+ are the conditions under 8rivate 4ar 8olicy <: 1- Ntice " lss, " Hotice should be given immediately to the insurer upon the occurrence of any accident, loss or damage and, in the event of any claim the insured should give all information and assistance as the insurer may reuire. " +very letter, claim. writ, summons, etc. should be forwarded to the insurer immediately on the receipt of insured. "In the event of any impending prosecution, inuest or fatal inuiry, the insured should immediately inform the insurer in writing. " In case of theft or other criminal act which may be the subject of a claim, the insured should give immediate notice to the 8olice and cooperate with the insurer in securing the conviction of the offender. - N8 a%&issi!8 ""e#8 p#&ise # pa'&e!t, " The insured should not settle or make any payment in respect of any claim, or admit liability or make any other admission with respect to the accident or any claim arising there from without the written consent of the insurer. " The insurer shall be entitled, if he so desires, to take over and conduct in the name of the insured , the defence or settlement of any claim or to prosecute in the name of the insured any claim for indemnity. The insured should give any information or assistance which the insurer may reuire for the purpose of resisting or settling any claim. 4- I!%e&!it', " The insurer has the option to repair, reinstate or replace the motor car or part thereof and @ or its accessories or may pay in cash the amount of the loss or damage.
=) " In any event, the liability of the insurer shall not exceed the value of parts damaged or lost less depreciation plus reasonable cost of fitting. In no case shall the liability of the insurer exceed the insuredFs estimate of value of the motor car including accessories thereon) at the time of the loss or damage, whichever is less. 5- Sa"e+ua#%i!+ the 0ehicle "#& lss # %a&a+e, " The insured is expected to take all reasonable steps to safeguard the motor car from loss or damage. "(e is also obliged to maintain it in an efficient condition. "In the event of any accident or breakdown the motor car should not be left unattended without proper precaution being taken to prevent further damage or loss. "If the motor car is driven before necessary repairs are effected, any extension of the damage or any further damage shall be entirely at insuredFs own risk. - Ca!cellati!, " The insurer may cancel the policy by sending seven days notice by registered letter to the insured, and in such event he will return to the insured the premium paid less the prorata portion thereon for the period the policy has been in force. " The policy may be cancelled by the insured on seven days notice and provided no claim has arisen during the currency of the policy, the insured shall be entitled to a return of premium, less premium at the insurance companyFs #hort 8eriod Aates for the period the policy has been in force. " (owever where the ownership of the vehicle is transferred, the policy cannot be cancelled, unless evidence that the vehicle is insured elsewhere is produced. G- C!t#i$uti! , If at the time any claim arises, there is any other existing insurance covering the same loss, damage or liability, then the insurer shall not be liable to pay or contribute more than its rateable proportion of such loss, damage, compensation, costs or expenses.
1) - A#$it#ati!, "This condition provides for settlement of disputes under the policy through arbitration which is a less expensive and faster method of settlement than litigation. -nly disputes regarding the amount or uantum of the claim can be referred to arbitration. If the insurer has disputed or denied liability under the policy, then the insured will have to take recourse to a court of law. "The arbitrator has to be appointed in writing by the parties in difference. " If the parties cannot agree upon a single arbitrator, then two disinterested persons are to be appointed as arbitrators, of whom one shall be appointed in writing by each of the parties. "If either party shall refuse or fail to appoint an arbitrator within two calendar months after receipts of notice in writing by the other party in accordance with the provisions of the 'rbitration 'ct, /20B then the other party shall be at liberty to appoint a sole arbitrator. In case of disagreement between the arbitrators, the difference will have to be referred to the decision of an $mpire, who has to be appointed by the arbitrators in writing before entering on the reference. The $mpire has to sit with the arbitrators and preside at the meetings. It shall be a condition precedent to any right of action or suit upon the policy that award by such arbitrators or $mpire of the amount of the loss or damage shall be first obtained. ' claim will be deemed to be abandoned or time"barred if a suit is not filed in a court of law within /* calendar months from the date the insurer declines liability for the claim,. Thus this condition stipulates a time limit for filing suit. :- O$se#0a!ce " c!%iti!s as p#ece%e!t t lia$ilit', ;ue observance and fulfillment of the terms, conditions and endorsement of the policy and the truth of the statements and answers in the proposal form shall be the conditions precedent to any liability of the insurer under the policy.
C) Q. 6#ite a sh#t !te ! B!us2Malus Clause A!s. B!us2Malus Clause " The insured should always be rewarded by way of reduction in premium for good risk and penalised for bad risk. $nder erstwhile %otor Tariff there was only reward by way of Ho 4laim
3) elevator or air j) by landslide @ rockslide. ($ou shall %indly observe that the ris%s covered are the same as those enumerated in the &rivate Car '' &olicy.) P#tecti! a!% Re&0al Csts " If the motor cycle is disabled by reason of loss or damage covered under the policy, the insurer will bear reasonable cost of protection and removal to the nearest repairers and of redelivery to the insured but not exceeding in all As.BB @" in respect of any accident. Auth#isati! "# Repai# " The insured may authorise repairs necessitated by damage covered under the policy, provided that : a) the estimated cost of such repairs does not exceed As. /=B@" b) the insurer is furnished forthwith a detailed estimate of the cost, and c) the insured gives the insurer every assistance to see that such repair is necessary and the charge reasonable. Eclusi!s u!%e# Secti! I ) The insured will not be liable to make any payment for the following: a) conseuential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures and breakage. b) damage to tyres unless the motor cycle is damaged at the same time when the liability of the insurer is limited to =BM of the cost of replacement. c) Eoss of or damage to accessories by burglary, housebreaking or theft, unless the %otor 4ycle is stolen at the same time.This is additional exclusion in %otor 4ycle 8olicy which do not appear under %otor 4ar 8olicy.) d) any accidental loss or damage suffered whilst the insured or any person driving with the knowledge and consent of the insured is under the influence of intoxicating liuor or drugs. ($ou shall %indly observe that except exception (d) other
2) exceptions are the same as those enumerated in the &rivate Car '' &olicy.) Q. Desc#i$e the c0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties " Mt# C'cle Plic' B. A!s. C0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties 3 This #ection provides the following coverage: 1. Liability to $hird *arty " This section provides indemnity to the insured in the event of accident in the event of any accident involving the insured vehicle against all sums which the insured shall become legally liable to pay in respect of i) death of or bodily injury to any person, including person conveyed in or on the %otor 4ycle, provided such person is not carried for hire or reward ii) damage to property other than property belonging to the insured or held in trust or in the custody or control of the insured. It is provided the insurer shall not be liable in respect of death, injury or damage caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the %otor 4ycle for loading thereon or taking away of the load from the %otor 4ycle after unloading therefrom. 2. Legal costs and e'enses " The insurer will also pay all legal costs and expenses incurred with its written consent. &. Indenity to dri)er " The indemnity under this #ection is available to any driver who is driving the motor cycle with insured6s permission, provided that such driver shall as though he were the insured observe, fulfill and be subject to the terms, exceptions and conditions of the policy in so far as they can apply. Liits of Liability nder *ection- ++- (i) " 's per %otor &ehicles 'ct, /233 The 'ct provides for unlimited liability in respect of third
0B) party death or bodily injury). nder *ection- ++- (ii) " As. 1,BBB@" in respect of any one claim or series of claims arising out of one event. !or third party property damage the limit provided is that reuired by the 'ct . The tariff however provides for increased limits upto unlimited liability for T.8. property damage, on extra premium. Q. 6hat a#e the +e!e#al ecepti!s u!%e# Mt# C'cle Plic' B *hich a#e applica$le t $th the secti!s " the plic'. A!s. ) (e!e#al Ecepti!s u!%e# Mt# C'cle Plic' B ) 5eneral exceptions applicable to all #ections of the 8olicy) under %otor 4ycle 8olicy < are the same as those found in the private car policy. Q. 6hat a#e the c!%iti!s u!%e# Mt# C'cle Plic' B. A!s. 3C!%iti!s u!%e# Mt# C'cle Plic' B 3 4onditions under %otor 4ycle 8olicy < are the same as those found in the private car policy.
C&&e#cial /ehicles B Plic' Q. Desc#i$e the c0e# ""e#e% $' Secti! I " C&&e#cial /ehicle Plic' B a!% eclusi!s applica$le t this secti!. A!s. Ris@s C0e#e% u!%e# Secti! I ) Lss # Da&a+e " 4ommercial &ehicle 8olicy < 3 This section is also known as J-wn ;amage6 #ection. It provides indemnity to the Insured against loss or damage to the insured vehicle and@or its accessories whilst thereon: a) by fire, explosion, self"ignition or lightening b) by burglary, housebreaking or theft c) by riot and strike d) by earthuake fire and shock damage) e) by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost
0/) f) by accidental external means g) by malicious act h) by terrorist activity i) whilst in transit by road, rail, inland waterway, lift, elevator or air j) by landslide @ rockslide. ($ou shall %indly observe that the ris%s covered are the same as those enumerated in the &rivate Car '' &olicy.) P#tecti! a!% Re&0al Csts " If the vehicle is disabled by reason of loss or damage covered under the policy, the insurer will bear reasonable cost of protection and removal to the nearest repairers and of redelivery to the insured but not exceeding in all As.*=BB @" in respect of any accident. Auth#isati! "# Repai# " The insured may authorise repairs necessitated by damage covered under the policy, provided that : a) the estimated cost of such repairs does not exceed As. =BB@" b) the insurer is furnished forthwith a detailed estimate of the cost, and c) the insured gives the insurer every assistance to see that such repair is necessary and the charge reasonable. De%ucti! "# Dep#eciati!, a)!or all rubber, nylon, plastic parts, tyres and battery =B M b)!or all parts made of glass Hil c)!or all other parts: '5+ -! &+(I4E+ 8+A4+HT'5+ -! ;+8A+4I'TI-H $p to 1 months Hil
0*) C&puls#' Ecess " The 4ommercial &ehicle 8olicy < for certain classes of vehicles to which +ndorsement Ho.*1 applies is subject to 4ompulsory +xcess of As. /,= BB@" . This endorsement further provides that except in case of total loss of the vehicle, the insurer shall not liable under #ection I of the 8olicy for loss@damage to lamps, tyres, mudguards and@or bonnet side parts, bumpers and@or paintwork. Eclusi!s u!%e# Secti! I ) The insurer shall not be liable to make any payment " a) in respect of conseuential loss, depreciation, wear and tear mechanical or electrical breakdowns, failure or breakages, nor for damage caused by overloading or strain of the motor vehicle, nor for loss of or damage to accessories by burglary, house"breaking or theft unless such motor vehicle is stolen at the same time b) in respect of damage to tyres unless the motor vehicle is damaged at the same time, when the liability of the insurer is limited to =BM fifty percent) of the cost of replacement c) in respect of any accidental damage or loss suffered whilst the insured or any person driving with his knowledge and consent is under the influence of intoxicating liuor or drugs. d) there is no liability for damage caused by overloading or strain of the motor vehicle e) nor is there any liability for loss of or damage to accessories by burglary, house"breaking or theft unless the motor vehicle is stolen at the same time. Kou shall kindly observe exclusions a) to c) above are substantially the same as in the 8rivate 4ar ><> 8olicy.) Q. Desc#i$e the c0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties " C&&e#cial /ehicle Plic' B. A!s. C0e# +#a!te% $' Secti! II)Lia$ilit' t Thi#% Pa#ties " C&&e#cial /ehicle Plic' B 3 This #ection provides the following coverage:
0) 1. Liability to $hird *arty " This section provides indemnity to the insured in the event of accident caused by or arising out of the use of the vehicle against all sums, including claimantFs cost and expenses, which the insured shall become legally liable to pay in respect of i) death@bodily injury to any person caused by or arising out of the use including the loading and@or unloading) of the motor vehicle ii) damage to third party property caused by the use including the loading and@or unloading) of the motor vehicle. 2. Legal costs and e'enses " The insurer will also pay all legal costs and expenses incurred with its written consent. &. Indenity to dri)er " The indemnity under this #ection is available to any driver who is driving the vehicle with insured6s permission, provided that such driver shall as though he were the insured observe, fulfill and be subject to the terms, exceptions and conditions of the policy in so far as they can apply. Li&its " Lia$ilit' $nder #ection" II" / i) " 's per %otor &ehicles 'ct, /233 The 'ct provides for unlimited liability in respect of third party death or bodily injury). $nder #ection" II" / ii)As. 1,BBB@" in respect of any one claim or series of claims arising out of one event. !or third party property damage the limit provided is that reuired by the 'ct . The tariff however provides for increased limits upto unlimited liability for T.8. property damage, on Q. 6hat a#e the ecepti!s u!%e# Secti! II)Lia$ilit' t Thi#% Pa#ties " C&&e#cial /ehicle Plic' B. A!s. !ollowing are the exclusions under this section: a) The insurer shall not be liable in respect of death, injury or damage caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load for loading on the motor vehicle or taking away of the load from the motor vehicle after unloading therefrom
00) .This liability may be covered under a separate 9orkmenFs 4ompensation 8olicy. b) +xcept so far as is necessary to meet the reuirements of the %otor &ehicles 'ct, the insurer shall not be liable for death or bodily "injury to any person in the employment of the insured, arising out of and in the course of such employment. #ection /0C of the %otor &ehicles 'ct, /233 provides that a policy shall not be reuired to cover liability in respect of death or bodily injury sustained by an employee of the insured arising out of and in the course of his employment other than a liability arising under the 9orkmenFs 4ompensation 'ct, /2* in respect of death@bodily injury to employees: i) engaged in driving the vehicle, or ii) if it is a public service vehicle, engaged as conductor or ticket examiner, or iii) If it is a goods carriage, being carried in the vehicle. c) Eegal liability towards person carried in the vehicle is excluded. (owever, as reuired by the %otor &ehicles 'ct, legal liability towards fare paying passengers and persons carried by virtue of a contract of employment is covered. d) The insurer is not liable in respect of damage to property belonging to or held in trust by or in the custody or control of the insured or a member of the insuredFs household or being conveyed by the motor vehicle. e) The insurer shall not be liable in respect of damage to any bridge and@or viaduct and@or to any road and@or anything beneath by vibration or by the weight of the motor vehicle and@or load carried by the motor vehicle. f) +xcept so far as is necessary to meet the reuirements of the %otor &ehicles 'ct, the insurer shall not be liable for death and@or injury to any person or persons who are not employees of the insured and not being carried for hire or reward, other than the owner of goods being carried in or upon or entering or mounting or alighting from the motor vehicle insured under the policy, or of such owner of the goods.
0=) Q. Desc#i$e the c0e# +#a!te% $' Secti! III ) T*i!+ Disa$le% /ehicles " C&&e#cial /ehicle Plic' B. A!s. This #ection provides that the policy shall be operative i.e. indemnity shall be available whilst the motor vehicle being used for the purpose of towing any one disabled mechanically propelled vehicle, and the indemnity provided by #ection II of the policy. Third 8arty Eiability ) shall be extended to apply in respect of liability in connection with such towed vehicle, provided that a) such towed vehicle is not towed for reward and b) the insurer shall not be liable in respect of damage to such towed vehicle nor in respect of property being conveyed there by. Q. 6hat a#e the +e!e#al ecepti!s u!%e# C&&e#cial /ehicle Plic' B *hich a#e applica$le t all the secti!s " the plic'7 A!s. 'll the six >exceptions> are identical to those in the 8rivate 4ar ><> 8olicy. Q. 6hat a#e the C!%iti!s u!%e# C&&e#cial /ehicle Plic' B7 A!s. !ollowing are the conditions under 4ommercial &ehicle 8olicy < which are substantially same as those in 8rivate 4ar < 8olicy : i) Hotice of loss. ii) Ho admission, offer, promise or payment iii) Indemnity repair, reinstate or replace etc.) iv) #afeguarding the vehicle from loss@damage and maintaining it in efficient condition. v) 4ontribution 4lause vi) 4ancellation 4lause yii) 'rbitration 4lause viii) -bservance of 4onditions as precedent to liability.
01) Q. 6hat is the Specialt' " C!%iti! N. 4 JI!%e&!it' " C&&e#cial /ehicle Plic' B as c&pa#e% t this c!%iti! u!%e# B Plicies "# the# classes " 0ehicle7 A!s. 4ondition Ho. JIndemnity6 of 4ommercial &ehicle 8olicy < as compared to this condition under < 8olicies for other classes of vehicle has a distinct feature. This condition under commercial &ehicle 8olicy provides that after a valid claim for Third 8arty 8roperty ;amage under #ection //" / ii) of the 8olicy, the insurer may pay the insured the full amount of his liability under the #ection and relinuish the conduct of any defence, settlement or proceeding without prejudice to its interests for having taken that course of action nor shall the insurer be liable for any costs or expenses incurred by the insured or any claimant after the insurer has relinuished such conduct. !or Third 8arty 8roperty ;amage the 'ct reuires a limit of As. 1,BBB@". The policy under #ection II"/ii) also provides this limit.
0C) amount of their liability under #ection II " I ii) " third party property damage " and leave the insured to conduct the defence and proceedings at his own cost and expense. Q. I! *hat *a' %es the scpe " c0e# u!%e# Secti! II " the C&&e#cial /ehicle B Plic' %i""e# "#& that " the Secti! II C0e# " a P#i0ate Ca# Plic' B7 A!s. The scope of cover under #ection II Eiability to Third 8arty of the 4ommercial &ehicle 8olicy < differs from that of #ection II cover of the 8rivate 4ar 4omprehensive 8olicy as under: a) ;eath of or bodily injury to persons carried for hire or reward or in pursuance of a contract employment only is covered under 4ommercial &ehicle 8olicies whereas liability in respect death@ injury to any occupant carried is covered in the 8rivate 4ar 8olicy. b) ;eath of or injury to third party or damage to third party property arising out of the accident beyond the limits of any carriage "way or thoroughfare in connection with bringing load to the motor vehicle or taking away loads therefrom are not covered under 4ommercial &ehicle 8olicy. c) ;amage to any bridge, weighbridge, viaduct or to any road by vibration or by the weight of the motor vehicle and@or load carried by the motor vehicles is also excluded under the 4ommercial &ehicle 8olicy. d) The insurers are not liable for damage to third party property caused by sparks or sparks or ashes from the motor vehicle or out of the explosion of the boiler of the motor vehicle under the 4ommercial &ehicle 8olicy. Q. Desc#i$e the 6#%i!+s #e+a#%i!+ Li&itati!s as t Use, i- F# (%s Ca##'i!+ /ehicle IK)4)41-, ii-F# Passe!+e# Ca##'i!+ /ehicle IK)5A!s. i- 6#%i!+s #e+a#%i!+ Li&itati!s as t Use F# (%s Ca##'i!+ /ehicle IK)4)41-,
03) $se only for carriage of goods within the meaning of the %otor &ehicles 'ct, /233. The 8olicy does not cover /) $se for organised racing, pace making, reliability trial or speed testing. *) $se whilst drawing a trailer except the towing other than for reward) of any one disabled mechanically propelled vehicle. ) $se for carrying passengers in the vehicle except employees other than driver) not exceeding six in number coming under the purview of 9orkmenFs 4ompensation 'ct, /2*. ii- 6#%i!+s #e+a#%i!+ Li&itati!s as t Use F# Passe!+e# Ca##'i!+ /ehicle IK)5$se only for carriage of passengers in accordance with the permits 4ontracts 4arriage or #tage 4arriage) issued within the meaning of the %otor &ehicles 'ct, /233 The 8olicy does not cover /) $se for organised racing, pace"making, reliability trial or speed testing. *) $se whilst drawing a trailer except the towing other than for reward) of any one disabled mechanically propelled vehicle. Q. Desc#i$e the 6#%i!+s " D#i0e#s Clause i! #espect ", a- Sta+e Ca##ia+e 2 C!t#act Ca##ia+e 2 P#i0ate Se#0ice /ehicle $- (%s Ca##ia+e c- N!)t#a!sp#t 0ehicles A!s. a- 6#%i!+s " D#i0e#s Clause i! #espect " Sta+e Ca##ia+e 2 C!t#act Ca##ia+e 2 P#i0ate Se#0ice /ehicle, &ersons or class persons entitled to drive, 'ny person including the Insured " 8rovided that a person driving holds an effective driving licence at the time of the accident and is not disualified from holding or obtaining such a licence.
02) 8rovided also that the person holding an effective learnerFs licence may also drive the vehicle when not used for the transport of passengers at the time of the accident and that such a person satisfies the reuirements of Aule of the 4entral %otor &ehicle Aules, /232. $- 6#%i!+s " D#i0e#s Clause i! #espect " (%s Ca##ia+e, &ersons or class persons entitled to drive 'ny person including the insured " 8roviding that a person driving holds an effective driving licence at the time of the accident and is not disualified from holding or obtaining such a licence. 8rovided also that the person holding an effective learnerFs licence may also drive the vehicle when not used for the transport of goods at the time of the accident and that such a person satisfies the reuirements of Aule of the 4entral %otor &ehicle Aules, /232. c- 6#%i!+s " D#i0e#s Clause i! #espect " !!) t#a!sp#t 0ehicles, &ersons or class persons entitled to drive 'ny person including Insured " 8rovided that a person driving holds an effective driving licence at the time of the accident and is not disualified from holding or obtaining such a licence 8rovided also that the person holding an effective learn" "erFs licence may also drive the vehicle and such a person satisfies the reuirements of Aule of the 4entral %otor &ehicle Aules, /232. Ta#i"" E!%#se&e!t N.G Q. 6hat special eclusi!s "#& pa#t " Plic' B ! Pu$lic Ca##ie#s7 A!s. Ta#i"" E!%#se&e!t N.G ) #ection I of the 8olicy < on 8ublic 4arriers is subject to Tariff +ndorsement Ho.*1.
=B) This endorsement provides for #pecial +xclusions which relate to 4ompulsory +xcess and exclusion of loss@ damage to certain parts of 8ublic 4arriers as under: a- C&puls#' ecess " In respect of -wn ;amage claims arising out of each and every accident during the currency of the policy, the insured is reuired to bear the first As. /=BB as 4ompulsory +xcess. This is applicable in regard to claims for total loss also. $- Lss2%a&a+e t ce#tai! pa#ts " The insurers are not liable for loss of or damage to lamps, tyres, mudguards and@or paint work. (owever, this is not applicable to a total loss claim. The purpose of these #pecial +xclusions is to discourage small claims as otherwise the insurersF claims experience in respect of own damage would be more, resulting in increase in the rate of premium in the long run. Q. Discuss the i!su#e#s lia$ilit' u!%e# C&p#ehe!si0e Mt# Plicies "# "ll*i!+ clai&s. a) Eoss of horn by theft from a motor cycle. b) 'ccident damage to an ornamental hub"cap of a private car. c) ;amage to the cabin due to an accident to a public carrier, the estimated repair cost of which is As./0C=@". d) ;eath of an employee of the owner of the goods carrier who was travelling in the lorry at the time of the accident. A!s. a) %otor 4ycle 4omprehensive 8olicy does not cover the loss of or damage to accessories by burglary, house" breaking or theft unless the %otor 4ycle is stolen at the same time. (ence the insurers are not liable, for the loss of the horn, an accessory alone by theft from a %otor 4ycle. b) The ornamental hub cap is an extra fitting. The loss of or damage to +xtra fittings is payable only if such fittings are specifically covered. c) The 4omprehensive 8olicy for a public carrier is subject to a compulsory excess of As. /=BB@" as per the endorsement
=/) Ho.*1. 's the estimated repair cost is less than As. /=BB, there is no liability under the 8olicy. d) 'ccording to the provisions of the %otor &ehicles 'ct, an insurance 8olicy in respect of a lorry goods vehicles) is reuired to cover employees being carried in the vehicle in the course of or arising out of their employment. 's per the interpretation of the provisions by various (igh 4ourts, the employment need not necessarily be with the insured. (ence the insurers are liable for ;eath of an employee of the owner of the goods carrier who was travelling in the lorry at the time of the accident. Q. A +%s ca##'i!+ 0ehicle +e!e#al ca#ta+e- i!su#e% "# c&p#ehe!si0e #is@s *ithut et#a $e!e"it &et *ith a! acci%e!t i!si%e a "act#' c&pu!%. H* *ill 'u %eal *ith clai&s l%+e% "# the "ll*i!+7 a) ;amage to the mudguard and@or bonnet side parts, head light and bumper the estimated loss of which is As. /1BB@". b) ;eath of a coolie carried in the vehicle. c) ;amage to the car of the owner of that public carrier which happened to accompany the lorry inside the private place at the material time of the accident. d) Injury to the driverFs friend travelling in the vehicle. e) ;amage to stereo. A!s. $nder the 4omprehensive 8olicy conditions, the insurers are liable for claims arising out of the use of vehicle in a private place e.g. a factory compound also. a) 's the damage relates to parts specially excluded under Tariff +ndorsement Ho.*1 there is no liability under the policy, b) The insurers are liable to the extent of the reuirements of the 9orkmenFs 4ompensation 'ct. c) #ection II of the 4omprehensive 8olicy for commercial vehicle excludes liability in respect of damage to property belonging to the insured. 's the lorry and the car belong to
=*) the same owner, there is no liability under the 8olicy. d) #uch liability can be covered by way of extra benefit on legal liability to non"fare paying passengers. -therwise the insurers are not liable. e) The stereo is an extra fitting. The loss of or damage to +xtra fittings is payable only if such fittings are specifically covered.
=)
CHAPTER
MOTOR TRADE POLICIES Q. 6hat a#e the special i!su#a!ce #e;ui#e&e!ts " Mt# T#a%e#s7 6hat a#e the plicies a0aila$le t satis"' the&7 A!s. %otor Traders like dealers of vehicles or those engaged in overhaul or repair of motor vehicles have to demonstrate the vehicles to prospective clients by giving a trial run. These activities involve risk. %otor Traders are also exposed to legal liability for accidental bodily injury, fatal or otherwise, and@or damage to property of third parties, caused by negligence in connection with the use of the vehicles, and@or defects in the plant or premises of the %otor Trader. In view of the above they have special insurance reuirements. The %otor Tariff provides for special policies named %otor Trade 8olicies to cater to the special insurance reuirements of the %otor Trade. There are following two types of motor trade policies: i- Mt# T#a%e B Plic', Ra% Ris@s 7This is a comprehensive policy which covers loss or damage to the motor vehicle, third party liability and trailers attached to the vehicle whilst the motor vehicle is in a public place or is temporarily garaged during the course of a journey. ii- Mt# T#a%e I!te#!al Ris@ Plic' 7 this 8olicy offers cover against loss or damage to the vehicle or liability arising out of an event occurring on the insured6s business premises. Q. 6#ite a sh#t !te ! Mt# T#a%e Ce#ti"icate. A!s. ) %otor Traders like dealers of vehicles or those engaged in overhaul or repair of motor vehicles have to demonstrate the vehicles to prospective clients by giving a trial run. To enable them to do so, the transport authorities allow them number plates which are known as Trade 4ertificates. The Trade 4ertificate can be temporarily attached to the vehicle being taken out on the public road for trial runs. Hormally, Trade 4ertificates are used in. case of brand new vehicles
=0) which are unregistered. 'lternatively, these plates are allotted the names of the drivers who will be demonstrating the vehicles. #uch named driver plates are normally used for driving secondhand registered vehicles. Q. Desc#i$e the C0e# +#a!te% u!%e# Mt# T#a%e B Plic'. A!s. The cover under %otor Trade < 8olicy is operative whilst the motor vehicle is in a public place or is temporarily garaged during the course of a journey but not in or on any premises owned by or in the occupation of the insured. There are following three #ections of the policy: Secti! I Lss # Da&a+e 7 This section provides indemnity in respect of loss or damage to the motor vehicle. This #ection is not subject to ;epreciation 4lause. 4ost of 8rotection and Aemoval upto As. /=B is also payable. Secti! II Lia$ilit' t Thi#% Pa#t' 7 The cover provided under this section is identical to that granted under the 4ommercial &ehicles ><> 8olicy. Secti! III T#aile#s 7 This section deals with extension of cover in respect of trailers mechanically propelled or otherwise) attached to the motor vehicle for the purpose of being towed. The indemnity provided by #ection I -wn ;amage) and #ection II Eiability to Third 8arty) is extended to such trailers. This extension is subject to the following provisions: a) the Eimits of Eiability shown in the #chedule of the 8olicy are not increased by this extension b) the insurer shall not be liable in respect of damage to property conveyed by the towed vehicle c) there is no liability in respect of loss, damage and@or liability sustained or incurred whilst the motor vehicle is towing a greater number of vehicles than is permitted by law. MOTOR TRADE INTERNAL RIS>S POLIC? Q. Desc#i$e the Scpe " C&p#ehe!si0e Mt# T#a%e
==) I!te#!al Ris@s Plic'. 'ns. This policy applies to accident, loss or damage or liability arising out of an event occurring only on the business premises of %otor Trader. There are following two #ections under the policy: Secti! I 3 Da&a+e " The insured shall be indemnified in respect of damage to any motor vehicle, including its accessories, whilst thereon i) the property of the insured or any member of the insuredFs family or household, ii) caused by accidental external and visible means, and iii) occurring in or on the insured premises mentioned in the policy, 3ce'tions " This section is subject to following exceptions: The Insurer shall not be liable to pay " a) for loss of use, depreciation, wear and tear, mechanical or electrical breakdowns, failures or breakages, b) for damage to tyres by application of breaks or by puncture, cuts or bursts. 3cess 7The indemnity under this section is subject to an >excess> of As. =B@" any one accident or a number of accidents arising out of one cause. Liit of Liability for own daage " The present %otor Tariff provides for a limit of As. B,BBB@" any one accident. Secti! II Lia$ilit' t the Pu$lic Ris@s " This #ection indemnifies the Insured against all sums, including claimants costs and expenses, which the Insured shall become legally liable to pay in respect of /1# accidental death or bodily inury to any person other than a person in the InsuredFs service or a member of the InsuredFs family or household /2# accidental daage to " a) any motor vehicle including its accessories whilst thereon ) held in trust by or in the custody or control of the Insured
=1) b) other property not being property belonging to or held in trust by or in the custody or control of the Insured occurring, in on or about the premises through i) the negligence of the Insured or any person in the service of or acting on behalf of the Insured, or ii) by or through any defect in the premises or in the ways, works, machinery or plant therein. Liits of Liability a) $nder #ection II /) in respect of any one claim or number of claims arising out of one cause " $nlimited 's per %otor &ehicles 'ct, /233 b) $nder #ection II *) in respect of any one claim or number of claims arising out of one cause .... As.1,BBB@". The Tariff however provides for following higher limits i)8roperty damage excluding damage to vehicles " As. /,=B,BBB@" any one accident. ii);amage to vehicles property damage " As. /,=B,BBB@" any one accident. Q. 6hat a#e the (e!e#al Ecepti!s " C&p#ehe!si0e Mt# T#a%e I!te#!al Ris@s Plic'7 A!s. (e!e#al Ecepti!s " These exceptions are applicable to both the #ections of the policy. The Insurer shall not be liable under the policy in respect of " a) accident, loss, damage or liability due to i) war and allied perils. ii) flood, volcanic eruption, earthuake and other convulsions of nature" b) damage to property caused directly or indirectly by fire or explosion. c) any conseuence of burglary, housebreaking or theft or any attempt thereat. d) damage to property sustained while it is being worked upon and directly resulting from such work, e) any defective workmanship,
=C) f) death, injury or damage caused by or through any demolition or of structural alteration or addition to the premises or by or through the installation of any euipment. g) death, injury or damage caused by or through or in connection with the use by the insured of power driven cranes, elevators, lifts or hoists other than car hoists having a lift not exceeding six feet or its euivalent, h) any liability which attached by virtue of an agreement. i) death, injury or damage resulting from the driving else where than in or on the premises of any vehicle by the Insured or any person in the service of or acting on behalf of the Insured, j) damage to any motor vehicle or its accessories caused by weather conditions. k) any accident, loss, damage or liability caused by nuclear weapons material.
=3)
CHAPTER G
MOTOR TARIFFS (ENERAL TARIFF RE(ULATIONS Q. Discuss the "ll*i!+ ta#i"" p#0isi!s, 1- (e+#aphical A#ea - P#hi$iti! " A+#ee% /alue Plicies 4- Sh#t Pe#i% Scale " P#e&iu& A!s.1- (e+#aphical A#ea " $nder %otor 8olicies 5eographical 'rea is India which may be extended to include Hepal and 'greed &alue 8olicy> is a policy which undertakes in the event of a total loss to pay a specified sum as the value of the vehicle insured and which does not take into account the current market value of such vehicle. !or %otor &ehicles it is not permissible to issue such policies except for vintage cars. ' vintage car is any car which is over 0B years old and is certified to be in working condition by an automobile engineer or surveyor. 4- Sh#t Pe#i% Scale " P#e&iu& " Tariff provides following #hort 8eriod #cale of 8remium for 8olicies issued or renewed for periods shorter than /* months: Pe#i% Nt Ecee%i!+-
/9eek /%onth * %onths %onths 0 %onths 1 %onths 3 %onths +xceeding 3 %onths
Rate
... ... ... ... ... ... ... ...
/BM of the 'nnual Aate *=M of the 'nnual Aate =M of the 'nnual Aate =BM of the 'nnual Aate 1BM of the 'nnual Aate C=M of the 'nnual Aate 3=M of the 'nnual Aate !ull 'nnual 8remium.
=2) The above scale must also be applied in calculating the premium when policies are cancelled during the currency at the reuest of the insured. Q. Discuss the "ll*i!+ ta#i"" p#0isi!s, 1- T#a!s"e# " a /ehicle - Ca!cellati! " I!su#a!ce 4- Du$le i!su#a!ce A!s. 1- T#a!s"e# " a /ehicle ) -n transfer of a vehicle, the benefits under the policy in force on the date of the transfer shall automatically accrue to the new owner. If transferee is not entitled to the benefit of the bonus or subjected to malus already shown on the policy, the recovery of the difference between his entitlement if any, and that shown on the policy shall be waived till the expiry of the policy. (owever, on expiry and@or termination of existing policy, the transferee will be eligible for
1B) The Insurer should inform the A.T.-. by registered '.;. post about the cancellations of the insurance. 4- Du$le i!su#a!ce 3 In case of double insurance the insurers or insured may cancel one of the policies. In that case refund should be granted on pro"rata basis and not on short period basis for the period both the policies are in force concurrently. Q. 6#ite !tes !, a- The c0e# !te $- Ca!cellati! " Ce#ti"icate " I!su#a!ce c- Lst8 Dest#'e% # Mutilate% Ce#ti"icates A!s. a- The c0e# !te " The cover note is issued pending issuance of a policy. It is valid for /= days. If due to any reason, the Insurer is not able to issue a policy during that period, the validity of the 4over Hote shall be extended for further period of /= days, at a time, but in no case the total period of validity of the 4over Hote shall exceed two months. 9here a 4over Hote is not followed by 8olicy of Insurance within the prescribed time limit, the Insurer is reuired, within seven days of the expiry of the period of the validity of the 4over Hote, to notify the fact to the Aegistering 'uthority in whose records the vehicle to which the 4over Hote relates has been registered. The cover note is issued only in the form prescribed by the Tariff. $- Ca!cellati! " Ce#ti"icate " I!su#a!ce 3 Tariff provides the following in this regard: a) 9hether any alteration is made in the policy affecting the information shown on the 4ertificate of Insurance, the 4ertificate of Insurance must be returned to the Insurance 4ompany by the Insured for cancellation, and a new 4ertificate must be issued. b) 9henever the period of cover made under a 8olicy is terminated or suspended before its expiration by effluxion of time, the Insured should be advised by registered mail that he
1/) must return the 4ertificate of Insurance within seven days, or if the 4ertificate is lost or destroyed, he should make a declaration to that effect. c) 9henever a 8olicy is cancelled or suspended by the Insurer, the Insurer should, within seven days, notify such cancellation or suspension to the registering authority concerned. c- Lst8 Dest#'e% # Mutilate% Ce#ti"icates " In the event of a 4ertificate of Insurance or 4over Hote) is lost, destroyed, torn, soiled, defaced or mutilated, a fresh 4ertificate may be issued on the representation of the Insured. The insured is reuired to comply with the following: a) to lodge with the Insurer a declaration in which he should set out also the particulars of the circumstances connected with the loss or destruction and the effortN made to find it or b) to return to the insurer the 4ertificate in such defaced or mutilated condition, and c) to pay to the Insurer a fee of As. =B@" for each new 4ertificate of insurance that he may issue after being satisfied about fact of its loss, destruction or mutilation. The new 4ertificate shall be plainly endorse to the effect that it is a duplicate, issued to replace the original. 9hen a fresh 4ertificate is issued on the representation that a 4ertificate has been lost, and if the original 4ertificate is later found by the holder, it shall be forthwith delivered to the Insurer. Q. a- 6hat is $!us2&alus a!% *hat a#e the #ules p#0i%e% u!%e# Mt# Ta#i"" #e+a#%i!+ applicati! " $!us2&alus t Plic' #e!e*als7 $- 6hat p#ce%u#e is a%pte% "# cha#+i!+ p#e&iu& i" the i!su#e% is u!a$le t p#%uce e0i%e!ce " B!us2Malus7 A!s.a- B!us2Malus ) F
F%alusF is a form of loading on the renewal premium for adverse claims experience. 1*) Rules #e+a#%i!+ applicati! " $!us2&alus " !ollowing are the rules provided under the %otor Tariff regarding application of bonus@malus: a) The bonus@malus concept is applicable only to the -; section of F
1) La%i!+2Discu!t Psiti! ! O.D. P#e&iu& at Epi#' " Plic'
La%i!+2%iscu!t ! O.D. P#e&iu& t $e applie% at Re!e*al
I" clai& is &a%e %u#i!+ epi#i!+ plic' 'ea#
I" ! clai& is &a%e Du#i!+ epi#i!+ plic' 'ea#
8AI&'T+ 4'A# and T'OI# with =BM loading continue=BMloading charge BM loading with BM loading charge =BM loading charge /BM loading with /BM loading charge BM loading Ho loading@Ho disc. Ho loading@ ;isc. charge /BM loading allow *BM discount with *BM ;isc. Ho loading@Ho ;isc. allow =M discount 9ith =M ;isc. reduce ;isc.to *BM allow =BM discount with =BM ;isc. reduce ;isc.to =M allow 1=M discount with 1=M ;isc. reduce ;isc.to =BM allow 1=M discount %-T-A 4K4E+@#4--T+A D 4-%%+A4I'E &+(I4E+# with 0BM loading continue 0BM loading charge BM loading with BM loading charge 0BM loading charge *=M loading with *=M loading charge BM loading charge /=M loading with /=M loading charge *=M loading Ho loading@Ho disc. Ho loading@ ;isc. charge /=M loading allow *BM discount with *BM ;isc. Ho loading@Ho ;isc. allow BM discount 9ith BM ;isc. reduce ;isc.to *BM allow =M discount with =M ;isc. reduce ;isc.to BM allow 0=M discount with 0=M ;isc reduce ;isc.to =M allow ==M discount with ==M loading reduce ;isc.to 0=M allow ==M discount $- 9hen a &ehicle is brought for insurance if the insured is
unable to produce evidence of
only no malus is to be charged a declaration is to be obtained from the insured that he did not own a vehicle earlier. 10) *) It the inspection of Aegistration
/1# In case of sus'ension of whole co)er under the 'olicy " a) The liability of the insurance 4ompany may be suspended
1=) suspended and a pro"rata return of premium for the period during which the policy is suspended may be credited to the insured after charging a sum of As. = for this concession. The return of premium. is allowed only as a credit to be deducted from the next renewal premium and not as a cash refund or b) The expiry date of the current period of insurance under the policy may be extended for a period eual to the period of suspension on payment of a sum of As. = for this concession. /2# In case of restriction of co)er under the 'olicy - $nder F
11) " ssible to issue policies in the joint names of the (irer and -wner. 8olicies must be issued in the name of the (irer and the -wnerFs interest is protected by an endorsement incorporated in the policy. This endorsement recognises the interest of the owners in the motor vehicle insured and provides that payment in respect of loss or damage to the motor vehicle which loss or damage is not made good by repair or replacement) shall be made to -wners as long as they are the -wners of the motor vehicle. The -wnerFs receipt will be a full and final discharge to the insurers in respect of such loss or damage. $- Mi!i&u& P#e&iu& " %inimum premium is As. /BB@" per vehicle except >'ct -nly> premium for %otor 4ycles@#cooters@'uto 4ycles. %inimum premium for vehicles specially designed for handicapped persons will be As. /=/only. c- A%%iti! " $e!e"its %u#i!+ cu##e!c' " plic' "'ny extra benefits may be added and limitation cancelled once only during the currency of an annual policy up to expiry date on a pro rata basis subject to the minimum premium applicable. 9hen an extra benefit has been so added or limitation so cancelled, no return of additional payment by the insured may subseuently be allowed. %- I!clusi! " #it8 st#i@e8 ea#th;ua@e8 "l% pe#ils %u#i!+ the cu##e!c' " the plic' 7 't he inception of the policy the insured can opt for exclusion of riot, strike, earthuake, flood perils. If the insured exercises the option of excluding these covers from the policy, it is not permissible to include these perils during the currency of the policy. Q. Discuss the Ta#i"" P#0isi!s "# +#a!ti!+ Pe#s!al Acci%e!t C0e# u!%e# Mt# Plicies. A!s. 8ersonal 'ccident cover for limited duration my be granted under %otor 8olicies. This cover shall be operative whilst the insured person is connected with the use of the vehicle including mounting into, dismounting from or
1C) travelling in the vehicle in any capacity. 'ny 8ersonal 'ccident insurance for *0 hours duration can not be given under %otor 8olicy. The benefits of the 8.'. cover are as under: ;escription of
i) ;eath only ii) Eoss of two limbs or sight of two eyes or loss of one limb and sight one eye. iii) Eoss of one limb or sight of one eye. iv) 8ermanent Total ;isablement from injuries other than named above.
Su& I!su#e% a!% P#e&iu& " %aximum cover is limited to 4apital #um Insured of As. * lakhs per person. 8remium per year per person for 4apital #um Insured of As. /B,BBB@" is as under :" !or 8rivate 4ars ... As. =.BB !or %otor 4ycles@ #cooters ... As. C.=B !or 4ommercial &ehicles ... As. 1.BB If the policy is for named persons, the premium mentioned above should be charged for each person. If the policy is desired for unnamed persons the cover should be taken 7 i) in case of private car or taxi for the number of persons the vehicle is authorised to carry including the driver) ii) in case of motor cycle@ scooter without side car for minimum two persons the vehicle is authorised to carry. Q. 6#ite sh#t !tes !, a- E!%#se&e!t N. 1 ) Pe#s!al Acci%e!t C0e# "# D#i0e#s the# tha! pai% %#i0e#-
13) $- Plic licies ies issu issue% e% t c0e 0e# "# "#ei+! ei+! &a%e a%e 0ehi 0ehiccles les " E&$assies8 Hi+h C&&issi!s # C!sulates i! I!%ia c- /ehic /ehicles les specia speciall' ll' %esi+! %esi+!e% e% "# use " ha!%ic ha!%icapp appe% e% pe#s!s %- Mt# /ehicles slel' *ithi! the i!su#e%s p#e&ises. A!s. a- E!%#se&e!t N. 1 ) Pe#s!al Acci%e!t C0e# "# +ndors rsem emen entt Ho. Ho. C/ D#i0 D#i0e# e#ss th the# e# th tha! a! pai% pai% %# %#i0 i0e# e#-- " +ndo provides for 8ersonal 'ccident 4over for ;rivers against death or bodily injury in a motor accident for 4apital #um Insured of As. *B,BBB@. This benefit is included as extension to standard cover without charging any additional premium. This extension is available to any driver including insured when driv drivin ing g hims himsel elf. f. (ow (owever ever paid paid driv driver er who is other therw wise ise covered under 9orkmenFs 4ompensation 'ct, /2* as per the reu reuir ireement mentss of %,&. %,&. 'ct 'ct is not not be cover covered ed unde underr this this extension. $- Plic licies ies issu issue% e% t c0e 0e# "# "#ei+! ei+! &a%e a%e 0ehi 0ehiccles les " E&$assies E&$assies88 Hi+h C&&issi!s C&&issi!s # C!sulate C!sulatess i! I!%ia 3 In case of %otor 8olicies issued to cover foreign made vehicles of +mba +mbass ssie ies, s, (igh (igh 4omm 4ommis issi sion onss or 4ons 4onsul ulat ates es in Indi India, a, when hen the the duty uty eleme ement is not not inclu nclude ded d in the the Insu Insure redF dFss +stimate of &alue I+&), the premium chargeable on -wn ;amage cover is to be loaded by /=M. c- /ehic /ehicles les specia speciall' ll' %esi+! %esi+!e% e% "# use " ha!%ic ha!%icapp appe% e% pe#s pe #s! !ss " 9hile charging the premium on private vehicles, including two@three wheelers specially designed for the use of handicapped persons a discount of /@M shall be allowed. This benefit is also extended to vehicles owned and used by instit instituti utions ons engag engaged ed in servic services es of blind blind handic handicapp apped ed and mentally retarded persons. %- Mt# /ehicles slel' *ithi! the i!su#e%s p#e&ises " %otor policies policies may be issued for the vehicles vehicles which which are used solely within the insured6s premises not being a motor trader) or on sites to which the public have no general right of access. These vehicles should not be licensed for general road use.
12) The usual tariff rates less a reduction of .M are charged as premium for this class class of vehicles. Q. 6hat a#e the #ules "# issue " N!)Mt# Plicies7 A!s. It is not permitted to insure Eiability risks under the %oto %otorr &ehi &ehicl cles es 'ct 'ct in Hon"% Hon"%ot otor or 8oli 8olici cies es.. It is howe howeve verr permissible to give other cover as follows: follows: 1- /ehic /ehicles les !t lice!s lice!se% e% ""# # +e!e +e!e#al #al #a% #a% use use " Hon"%otor 8olicies may be issued for vehicles which are not licensed for road use and for which no 4ertificate of Insurance is reuired, provided: i) such vehicles are used only on the premises of the insured not being a %otor Trader) or on sites to which the public has no general right of access. ii) ii) &ehi &ehicl cles es not not bein being g pede pedest stri rian an cont contro roll lled ed agri agricu cult ltur uraal implem implement ents) s) used used for agricu agricultu ltural ral or forest forestry ry purpos purposes es are excluded. iii) iii) &ehic &ehicles les use used d by haula haulage ge cont contrac ractors tors are are exclu excluded ded.. - /ehic hicles les *hich ich th thee#*ise ise p#0 #0i%e% i%e% "# "# u!%e %e## th thee perm missi issib ble in the the case case of Spec Sp ecia iall T'pe T'pess Ta# Ta#i"" i"" " It is per following types of vehicle to give any other cover except cover for legal liability in respect respect of use on a road) by means of a Hon"%otor 8olicy : a) %obile 4ranes. b) %echanical Havies, Havies, #hovels, 5rabs 5rabs and +xcavators. +xcavators. c) %obile 8lant d) #ite #ite 4lea 4leani ning ng and and Eeve Eeveli ling ng 8lan 8lantt othe otherr than than vehi vehicl cles es designed or adapted for the carriage of goods or materials or Aoad or !ootpath Aollers). e) 'ny vehicle which is used only on sites on which the insu insure red d is carry rrying ing out out work ork unde underr a
CB) i) such policy is issued only for the period of one specific contract ii) the vehicles are those used in, on or about the site clearing, engineering or construction work to which the contract relates iii) any vehicle ualifying for a private car licence is excluded iv) any goods carrying vehicle used under a private or public carrier permit issued in accordance with the %otor &ehicles 'ct, is excluded. PRI/ATE CAR TARIFF Q. Discu scuss th thee "ac "act# t#s "# #ati!+ p#i0ate ca#s ! a c&p#ehe!si0e c&p#ehe!si0e $asis. A!s. A!s. Fact Fact# #ss "# "# #ati #ati!+ !+ p# p#i0 i0at atee ca#s ca#s ) !ollowing are the factors for rating private cars on a comprehensive basis : i) Cubic capacity of the vehicle 7 vehicle 7 for this purpose 8rivate cars are are grou groupe ped d unde underr two two grou groups ps viG viG., cubic ubic capa capaci city ty not not exceeding /=BB cc, and exceeding /=BBcc ii) Value of the vehicle iii) The one of operation " There are two Pones of operation, Pone ' and Pone <. Pone ' consists of %adras Aegion and . Pone < consists of Aest of India, i.e. 4alcutta Aegion, ;elhi Aegion and >. !ollowing is the extract of #chedule of premium for own damage section: InsuredFs 4ubic 4apacity +sti +stima mate te of Hot +xceeding +xceeding &alue I+&) /=BB c.c. /=BB c.c. Pone ' Pone < Pone ' Pone < As. As. As. As. As. /=,BBB =1/ C2* " " *B,BBB 13B 2== " " B,BBB 2/1 /,*C2 211 /,*3 0B,BBB /,/= /,1B0 /,*B* /,131 =B,BBB /,32 /,2*3 /,02 *,B//
1 o t e s 8 i) Intermediate values and values in excess of those shown in the schedule above shall be charged at As. *.CM for Pone ' and As. .*=M for Pone < calculated on the difference to the nearest rupee. ii) +lectrical and@or electronic items fitted to private cars should be insured separately under a F
=M but not exceeding As. /*= /BM but not exceeding As. *=B /=M but not exceeding As. C= *BM but not exceeding As. 1*= *=M but not exceeding As./*=B BM but not exceeding As./3BB =M but not exceeding As.*=BB
2# 0iscount for eclusi! " ea#th;ua@e a!%2# "l% a!%2# #it pe#ils 0iscount 1or &erils excluded B./BM on I+& of car +arthuake !ire and #hock damage), B./=M on I+& of car !lood, typhoon, (urricane, #torm, Tempest, Inundation, 4yclone, (ailstorm and !rost. B./=M on I+& of car Aiot D #trike and Terrorist 'ctivity.
C*) &# 0iscount for ebershi' of a recognised Autoobile Association ) ' discount of =M subject to maximum of As. /BB@" per car may be allowed from the -wn damage or liability premium whichever is more favourable to the insured). !ollowing are the conditions for this discount: /) The discount can be allowed only in respect of membership of one 'ssociation. *) The insured shall produce membership card issued by the 'utomobile 'ssociation or a reference shall be made to the secretary of the 'ssociation concerned. This procedure must be followed at the time of renewal also. ) The discount is applicable only to individual owners or joint owners of private cars and not to firms. The discount may be given on policies subject to (ire 8urchase or Eeasing 'greement, provided the insured is otherwise eligible for discount. 0) The discount applies to both new business and renewals. In the event of the insured becoming a member during the currency of the policy, discount may be allowed pro"rata. Q. a- Na&e "i0e Et#a $e!e"its u!%e# p#i0ate ca# c&p#ehe!si0e plicies. $- Discuss a!' Th#ee et#a $e!e"its a0aila$le ! pa'&e!t " et#a p#e&iu&8 u!%e# the a$0e Plic'. A!s. Fi0e Et#a $e!e"its u!%e# p#i0ate ca# c&p#ehe!si0e plicies, i) Eegal Eiability to employees of the insured who may be travelling or driving the employer6s car other than paid drivers). ii) 8ersonal 'ccident benefits to the insured and others. iii) 'dditional cover to the luggage trailer. iv) 4over for use of cars for reliability trials and rallies. v) 4over for +xtra fittings $- Th#ee et#a $e!e"its a0aila$le ! pa'&e!t " et#a p#e&iu&8 u!%e# the a$0e Plic') /1# 5eliability $rails and 5allies held in India ) 8olicies may
C) be extended to permit use during a particular reliability trail or rally under the auspices of any recognised motoring organisation on payment of following additional premium: '' &olicies " As. =B for the first day and As. *= for each succeeding day. The cover is subject to an excess of As. =BB for each and every claim under #ection I of the 8olicy. '/' &olicies " As. *B for the first day. As. /B for each succeeding day. /2# Increased $hird *arty *ro'erty 0aage under ,ection II-1/ii# of the *olicy - The %otor &ehicles 'ct, /233 provides for minimum As. 1BBB cover for Third party 8roperty ;amage. It is possible to obtain higher limits of T.8.8.;. cover at following additional premium: 1irst increase of 2s. 33""" (i.e. for total cover of 2s. !"""") " As. /= per vehicle. 1or each additional 2s. !"""" " As. /B per slab of As. =BBBB per vehicle. 1or unlimited liability " As. =B total premium per vehicle. &# "o)er for 3tra ittings 7 +xtra !ittings are to be covered separately. #eparate values are to be given for items intended to be covered. 8remium is charged Q .0BM on the value. +xclusion as to %echanical or +lectrical
C0) Cu$ic Capacit'
$ptol=Bc.c. $pto*=Bc.c. -ver *=B c.c.
O*! Da&a+e
As. 33@" plus /./BM on I+& As. //B@" plus /./BM on I+& As. /*@" plus /. /BM on I+&
In applying the scale of rates, %otor 4ycles @ %otor #cooters exceeding any of the stated cubic capacities are to be rated according to the next higher capacity. b) !or 'uto 4ycles or %echanically 'ssisted 8edal 4ycles " -wn ;amage " As. B@" plus B.0BM on I+& %inimum values for computation of premium shall be as under, irrespective of any lower value proposed for insurance: $pto /=B c.c. As. ,BBB@" $pto *=B c.c. As. 0 , BBB@R -ver *=B c.c. As. =,BBB@" ,ide car " The insured value of any side car is to be stated separately. ' *=M reduction may be allowed where the cover excludes use of a %otor 4ycle @ %otor #cooter without a side" car attached. 0iscounts for deletion of naed 'erils 7 !ollowing discounts may be allowed from -wn ;amage 8remium: i) B./BM on I+& if +arthuake, etc. perils excluded. ii) B. /=M on I+& if !lood, etc. perils excluded. iii) B. /=M on I+& if Aiot, #trike etc. perils excluded. Q. E!u&e#ate the et#a $e!e"its a0aila$le u!%e# &t# C'cle C&p#ehe!si0e Plicies. A!s. Et#a Be!e"its u!%e# &t# C'cle C&p#ehe!si0e Plicies, /1# Loss of Accessories 7 The policy does not cover Eoss of 'ccessories by Theft. This may be covered at an additional premium of M on the value of such accessories, with a minimum premium of As. /= subject to a compulsory excess of As. =B@"
C=) /2# Legal Liability to 'ersons e'loyed in connection with the o'eration and 7 or aintenance " Eegal Eiability to persons employed in connection with the operation and @ or maintenance of the %otor 4ycle under the 9orkmenFs 4ompensation 'ct, /2*, !atal 'ccidents 'ct, /3== and at 4ommon Eaw may be covered at the extra premium of As. /= per person. /&# Liability to 3'loyees of the Insured " Eegal Eiability to +mployees of the Insured, who may be driving@riding the +mployerFs %otor 4ycle may be covered at the extra premium of As.=B@". /4# 5eliability $rials and 5allies " 8olicies may be extended to permit use during particular reliability trial or rally under the auspices of a recognised motoring organisation on payment of specific additional premiums. !or the scope of this extension please refer the description in the 8rivate 4ar Tariff). /9# Increased $hird *arty *ro'erty 0aage 7 The policy may be extended for Increased Third 8arty 8roperty ;amage. 'dditional premium shall be as described in 8rivate 4ar Tariff) Q. 6hat a#e %iscu!ts a0aila$le u!%e# Mt# C'cle Plic'7 A!s. Discu!ts a0aila$le u!%e# Mt# C'cle Plic', 1- Ecess Acci%e!tal Da&a+e : i) Insured bearing first As. /BB@ " /BM ;iscount but not exceeding As. *=@ ii) Insured bearing first As. *BB@" /=M but not exceeding As. =B@ - N Clai& B!us 4- Discu!t "# Me&$e#ship " a! Aut&$ile Assciati! " ;iscount for %embership of an 'utomobile 'ssociation is =M subject to a maximum of As. B@" per motor cycle. #ame rules apply as in 8rivate 4ar Tariff.
C1) C&&e#cial /ehicles Ta#i"" Q. a- Na&e the et#a $e!e"its a0aila$le u!%e# C&&e#cial /ehicle C&p#ehe!si0e Plicies. $- Desc#i$e the scpe " c0e# u!%e# et#a $e!e"it "# Le+al lia$ilit' "# acci%e!ts t !!)"a#e pa'i!+ passe!+e#s. A!s.a- !ollowing are the extra benefits available under 4ommercial &ehicle 4omprehensive 8olicies: i) Eegal Eiabilities to employees of the insured. ii) 8ersonal 'ccident benefits to the insured and others. iii) Eegal Eiability for accidents to passengers fare paying). iv) Eegal Eiability to non"fare paying passengers. v) Increased Third 8arty 8roperty ;amage vi) Eiability for damage to property caused by spark risk in connection with steam driven vehicles. vii) 4over for extra fittings $- Le+al lia$ilit' "# acci%e!ts t !!)"a#e pa'i!+ passe!+e#s) 4ommercial &ehicles 8olicies may be extended to cover Eegal Eiability to non"fare paying passengers.. There are two types of non"fare paying passengers: i) 4on-fare &aying &assengers who are employees of the +nsured but not >9orkmen> under the 9orkmenFs 4ompensation 'ct" !ollowing additional premium is payable: a) &ehicles not designed for carriage of passengers, e.g. 5oods 4arrying &ehicles " As.=B@" per passenger. b) &ehicles designed for carriage of passengers e.g.
CC) A!s. Scale " Discu!t "# Ecess Acci%e!tal Da&a+e "# C&&e#cial /ehicles Ecess
Discu!t st
Insured bearing / As. /BBB =M but not exceeding As.*=B Insured bearing /st As. *=BB /BM but not exceeding As.1*= Insured bearing /st As. =BBB /=M but not exceeding As. /*=B Insured bearing /st As. C=BB *BM but not exceeding As. /3C= Insured bearing /st As./BBBB *=M but not exceeding As.*=BB Q. 6#ite a sh#t !te ! IMT 5 A!s. IMT 5 3 4ommercial &ehicle 8olicy with +ndorsement Ho *1 provides that except in the case of total loss of the vehicle, the Insurer shall not be liable under #ection I of the 8olicy i.e. -wn";amage #ection) for loss of or damage to lamps, tyres, mudguards and@or bonnet side parts, bumpers and@or paintwork. %ajority of +xclusion under I%T *1 can be deleted by paying an additional premium attaching endorsement, I%T C0 which cover losses excluding theft under any circumstances) of items like tyres, mudguards, headlights and painting of damage portion under commercial &ehicle Fown goods> only. /2# Vehicles "arrying *assengers for :ire or 5eward 7 i) Taxis with carrying capacity upto 5 &assengers " The Aate is based on 4ubic 4apacity upto /=BB c.c. and exceeding /=BB c.c.
C3) ii) Three 6heelers with carrying capacity upto 5 &assengers " The Aate is based on 4ubic 4apacity different capacities given under Tariff). iii) 7ther Vehicles with carrying capacity exceeding 5 &assengers 7 The rates are based on Eicensed 8assenger 4arrying 4apacity and /&# $railers % The #ate 0a#ies acc#%i!+ t the class " 0ehicle that *ill t* the t#aile# a!% the !u&$e# " t#aile#s t*e%. /4# Miscellaneous and s'ecial $y'es of Vehicles 3 The #ates 0a#' acc#%i!+ t t'pe " 0ehicle. Q. H* the T#aile#s ca! $e i!su#e% u!%e# Mt# Plicies7 A!s. ' trailer is any truck, cart, carriage or other vehicle without means of self" propulsion including agricultural implements drawn or hauled by any self"propelled vehicle. Trailers can be covered under %otor 8olicies in the following ways: i) 8olicy 4overing the &ehicle which will tow the trailer may be extended to cover the Trailers) or ii) ' separate policy is issued to cover trailers) at the prescribed rates, subject to the Trailer and the Towing &ehicle being insured on identical terms with the same 4ompany. !or the purpose of
9here more than one trailer is owned but not more than one trailer is towed at a time, the basis of rating of such trailer
C2) is the basis of Stowing one trailer only> and this must be applied to all trailers. The premium so calculated must be charged on all trailers owned by and @ or in the possession of the insured. The same principle shall be applied in cases where not more than two trailers are towed at a time. The following clause must appear on all policies covering either the towing vehicle or the trailers >9arranted that not more than trailers shall be towed by the towing vehicle and further warranted that the 4ompany shall not be liable to indemnify the insured in connection with any vehicle or trailer while a greater number of trailers in all is being towed than is permitted by law.> Q. 6hat a#e the Ta#i"" p#0isi!s #e+a#%i!+ p#e&iu& "# Mt# T#a%e I!te#!al Ris@s Plic'. A!s. !or %otor Trade Internal Aisks insurance the rates of premium are based on a) #uperficial area of premises occupied by the insured for %otor trade business b) 9ages paid to employees The first and all renewable premiums are regulated partly on wages, salaries etc. paid by the insured to employees during the period of insurance. The insured has to maintain the record of employees and the insurers have the right to inspect such records.
3B)
CHAPTER
DOCUMENTS OF MOTOR INSURANCE Q. Discuss the i&p#ta!ce " 0a#ius %cu&e!ts use% "# Mt# I!su#a!ce. A!s. &arious documents used for %otor Insurance with their use and importance are enumerated as under: i- P#psal F#& "The 8roposal !orm is compulsory in %otor Insurance. The information@particulars given by the insured in the 8roposal !orm, form the basis for the insurance contract. The ;eclaration 4lause in the form converts the common law duty into a contractual duty of utmost good faith. The effect of this is that the answers given in the proposal become warranties. ii- C0e# Nte " 4over Hote is issued pending issuance of policy. It is unstamped document The cover note is to be issued in the prescribed form and it is valid for a period of /= days and can be extended upto two months. iii- Ce#ti"icate " I!su#a!ce "The 4ertificate of Insurance is an evidence that a motor vehicle is insured against third party liability as reuired by the %otor &ehicles 'ct. The 4ertificate is to be issued as per the form prescribed in the 'ct. i0- The Plic' " The 8olicy is a stamped document evidencing the contract of insurance. It includes the terms and conditions of the insurance cover. 0- /a#ius E!%#se&e!ts" +ndorsements are attached to the policy to incorporate changes in the terms of the 8olicy. It may be attached at the time of issuing the policy to provide additional benefits and cover or to impose restrictions. The wordings of the +ndorsements are provided in the Tariff.
3/) 0i- Re!e*al Ntice " The Aenewal Hotice is reminder to the insured about the expiry of the policy and calling for the renewal for a further period of one year. 0ii-Re!e*al Receipt 7 9hile renewing the insurance some insurers issue the Aenewal Aeceipt in place of the 8olicy. It is worded to the effect that, in consideration of receipt of the renewal premium, the 8olicy is renewed for a further period of /* months. Q. 6hat a#e the ;uesti!s c&&!l' as@e% i! Mt# P#psal "#&7 A!s. P#psal F#& "The 8roposal !orm is compulsory in %otor Insurance. It is designed to elicit information necessary for a proper evaluation of the risk and for rating. The information@particulars given by the insured in the 8roposal !orm, form the basis for the insurance contract. !ollowing are the uestions commonly asked in 8roposal form: /a# *articulars about the 'ro'oser i) &roposer8s name in full. This is reuired to establish the identity of the insured and to make enuiry concerning the moral haGard. ii) /ddress"It is necessary for communications and area of use of the vehicle. iii) 7ccupation" It indicates social status of the proposer and also gives some indication about the extent and purpose the vehicle is likely to be used. iv) &hysical disability and mental infirmity" Though this information is relevant from the point of risk involved, it is difficult to get precise answers as the vehicle may be driven by persons other than the insured. v) &revious convictions" This throw light on driving habits. /b# 0etails of )ehicles to be insured i) 2egistration, ngine and Chassis 4umber and 9a%e of the vehicle "These give identification of the vehicles and are reuired for verification in case of accident. ii) $ear of manufacture "This is necessary to decide the age
3*) of the vehicle particularly for comprehensive cover. iii) Type of body, *eating capacity and Cubic capacity" These are reuired for Aating. iv) 0ate of &urchase 7 This is reuired for applying loading in case of late Aegistration v) +nsured8s estimate of the value of the vehicle" Aeuired for premium calculation and this is also the #um Insured in %otor. /c# 0etails of other )ehicles 7 ;etails of &ehicles owned by the proposer and details of accidents during the past to = years give some idea about the physical and moral haGard. /d# 0etails of insurance history"This is to ascertain whether there were any adverse features, such as declinature, cancellation or imposition of special terms and conditions by previous insurers. /e# ;uestions relating to etra benefits and eligibility for discount 7 Aeuired for additional premium or discount of premium as the case may be. /f# "ertain other 'articulars in case of coercial )ehicles 7 +.g. the type of permit, the total licensed passenger carrying capacity etc. /g# 0eclaration " The answers to the uestions are followed by declaration. The ;eclaration 4lause in the proposal form converts the common law duty into a contractual duty of utmost good faith. The effect of this is that the answers given in the proposal become warranties. Q. Ce#tai! c&&! "eatu#es appea# i! all t'pes " Mt# Ce#ti"icates " I!su#a!ce. 6hat a#e the'7 A!s. In %otor Insurance, in addition to the policy, a 4ertificate of insurance in the prescribed form is issued as reuired by the %otor &ehicles 'ct. There are certain common features which appear in all types of motor certificates of insurance. These are as under: a) 4ertificate number. b) Aegistration mark and number or description of the
3) vehicle insured. c) +ffective date of commencement of insurance for the purpose of the 'ct d) ;ate of expiry of insurance e) 8ersons or classes of 8ersons entitled to drive f) Eimitations as to use The above details are followed by a certificate signed by the 'uthorised Insurer to the effect that the 8olicy and the 4ertificate of Insurance are issued in accordance with the provisions of the 4hapters O D OI of the %otor &ehicles 'ct, /233. 8articularsa) to d) are same in all certificates. ;ifferences in wordings are found in the particulars e) and f). Q. Desc#i$e the *#%i!+s appea#i!+ i! Ce#ti"icate " I!su#a!ce "# P#i0ate Ca# "# the "ll*i!+, i- Pe#s!s # classes " pe#s!s e!title% t %#i0e ii- Li&itati!s as t Use A!s. i- Pe#s!s # classes " pe#s!s e!title% t %#i0e 'ny of the following: a) The Insured. b) 'ny other person who is driving on the InsuredFs order or with his permission " 8rovided that the person driving holds or had held and has not been disualified from holding an effective driving license with all the reuired endorsements thereon as per the %otor &ehicles 'ct and the Aules made there under for the time being in force to drive the category of motor vehicle insured hereunder. ii- Li&itati!s as t Use $se only for social, domestic and pleasure and for the InsuredFs own business. The 8olicy does not cover the use for hire or reward or organised racing, pacemaking, reliability trials, speed testing,
30) the carriage of goods other than samples) in connection with any trade or business or use for any purpose in connection with %otor Trade. Q. Desc#i$e the *#%i!+s "# Li&itati!s as t Use "#, a- (%s Ca##'i!+ /ehicle $- Passe!+e# Ca##'i!+ /ehicle A!s. a- Li&itati!s as t Use "# (%s Ca##'i!+ /ehicle ) *! +%s # +e!e#al ca#ta+e, $se only for carriage of goods within the meaning of the %otor &ehicles 'ct, /233. The 8olicy does not cover /) $se for organised racing, pacemaking, reliability trial or speed testing. *) $se whilst drawing a trailer except the towing other than for reward) of any one disabled mechanically propelled vehicle. ) $se for carrying passengers in the vehicle except employees other than driver) not exceeding six in number coming under the purview of 9orkmenFs 4ompensation 'ct, /2* $- Li&itati! as t Use F# Passe!+e# Ca##'i!+ /ehicle, $se only for carriage of 8assengers in accordance with the permits 4ontract 4arriage or #tage 4arriage) issued within the meaning of the %otor &ehicles 'ct, /233. The 8olicy does not cover " /) $se for organised racing, pacemaking, reliability trial or speed testing. *) $se whilst drawing a trailer except the towing other than for reward) of any one disabled mechanically propelled vehicle. Q. Desc#i$e Mt# C0e# Nte. A!s. %otor 4over Hote is a document issued in advance of
3=) the 4ertificate and the 8olicy. It is valid for a period of /= days from the date of its issue. If for any reason the insurers are not able to issue a policy during that period, the validity of the 4over Hote may be extended for a further period of /= days at a time but in no case the total period of validity of a 4over Hote shall exceed two months. %otor 4over Hote is to be issued in the following form prescribed by the %otor Tariff: >The Insured described in the #chedule below, having proposed for insurance in respect of the %otor &ehicles) described therein and having paid the sum of As.... as premium the risk is hereby held covered under the terms of the 4ompany6s usual form of.... 8olicy applicable thereto subject to any #pecial 4onditions or Aestrictions mentioned overleaf) for the period between the dates specified in the schedule unless the cover be terminated by the 4ompany by notice in writing in which case the insurance will thereupon cease and a proportionate part of the premium otherwise payable for such insurance will be charged for the time the 4ompany had been on risk.> The 4over Hote further contains the following particulars: /) Aegistration mark and number, or description of the &ehicles insured @ 4ubic capacity @ 4arrying capacity@%ake @ Kear of manufacture. *) Hame and 'ddress of the Insured. ) +ffective date and time of commencement of insurance for the purpose of the 'ct.: Time ;ate 0) ;ate of expiry of insurance. =) 8ersons or classes of persons entitled to drive. 1) limitations as to $se C) 'dditional Aisk if any 3) #pecial 4onditions The %otor 4over Hote incorporates a certificate to the effect that it is issued in accordance with the provisions of 4hapters O and OI of the %otor &ehicles 'ct, /233.
31)
CHAPTER :
MOTOR UNDER6RITIN( Q. Discuss the p#i&a#' "act#s i! u!%e#*#iti!+ &t# $usi!ess. A!s. -n the one hand where %otor business forms major part of insurers insurance business, on the other hand it is unprofitable also. In view of this it is necessary to adopt a sound underwriting policy in motor business. The primary factors in underwriting motor business may be grouped under the following headings: i) The vehicle ii) The use of the vehicle iii) The geographical area of operation iv) The 8roposer of the vehicle and v) The claims experience. i- The /ehicle " The underwriting approach depends on the type of vehicle. In this regard following are the considerations: a# $he year of anufacture "The age of the vehicle is important from the underwriting point of view. 's a vehicle becomes older, defects appear more freuently and metal fatigue sets in. -ld vehicles are normally inspected before underwriting and subject to their condition, they are accepted for insurance with or without excess and@or for restricted cover. b# $he 'urchase 'rice or the insured
3C) a# $he 'ur'ose for which the )ehicle is used 7 This has link with exposure of risk. This aspect is taken care of in the rating system adopted by the tariff. 8rivate cars poses a lighter risk than taxis which are subject to much greater utilisation. #imilarly private carriers are better risks than public carriers as the latter are exposed to a greater incidence of accidents and wear and tear. b# !oods carried in case of goods carrying )ehicles " The general nature of the goods carried in respect of a goods vehicle is also an important aspect for underwriting purposes, especially if they are flammable or likely to explode. iii- A#ea " pe#ati!" The exposure to risk depends upon the area in which the vehicle is used. This is a physical haGard. In the rating system for private cars the tariff and has taken care of this aspect wherein the rates differ according to the Gones in which the car is used. Pone ' and Pone <) i0- P#pse# " the 0ehicle 7 These consideration are to take care of %oral (aGard. In comparison to physical haGards like the physical condition of the vehicle or the use to which it is put or the area in which it is used the proposer@owner of the motor vehicle is more responsible for bad claims experience. 9hile considering the acceptance of new proposals, it may not be easy to ascertain all aspects of moral haGards.
33) Q. The D#i0e# " the /ehicle is a! i&p#ta!t u!%e#*#iti!+ c!si%e#ati! i! Mt# I!su#a!ce. Discuss. A!s. This consideration is to take care of %oral or 8ersonal (aGard. In comparison to physical haGards like the physical condition of the vehicle or the use to which it is put or the area in which it is used the driver of the motor vehicle is more responsible for bad claims experience. The physical haGards are taken care of in the rating system but the personal haGard of the driver can not be taken care of in the rating system. It is essentially the driver who is responsible for good or bad claims experience in motor insurance.
32) an individual or his driving habits. This can be ascertained from the claims experience and history of conviction for traffic offences. %inor conviction for speeding or parking may be ignored but a number of such convictions may indicate both recklessness and indifference to the law on the part of the proposer. in such cases, comprehensive cover may not be granted. The risk is closely associated with the occupation of the proposer. 8erson engaged in the entertainment professions represent a haGardous class of risk as they use their cars for long and hurried journeys. 9hile considering the acceptance of new proposals, it may not be easy to ascertain all the above aspects of moral haGards.
2B) excess and restricted cover. +ven after granting cover for older vehicles, good underwriting practice on the part of the insurers reuires strict watch on the claims experience so as to decide the acceptance of such older vehicles for renewal of cover. The underwriting guidelines adopted in regard to the insurance of old vehicles differ from insurer to insurer. 'nother problem is in regard to the acceptance of the insuredFs estimated value declared by the proposer. #ince there is no pro rata condition of average in motor policy, careful attention has to be paid to the insuredFs estimated value in relation to age of the vehicle. This is also essential to avoid dispute in the event of Total Eoss. $- I&p#te% ca#s " %otor insurance underwriting of the imported cars poses several problems to insurers. Imported cars present problems to insurers both at the time of acceptance of business and also at he time of loss There is the problem of obtaining spare parts. The cost of repairs of an imported car is also high because of the cost of the materials and intricate design which reuires more time spent on dismantling or assembling. &aluation of imported cars at the time of insurance would also pose a problem. The policy covering such cars is invariably subject to the +ndorsement to the effect that in the event of loss or damage necessitating the supply of a part not obtainable from stocks held in the country in which the %otor &ehicle is held for repair, the 4ompany shall pay in cash the amount of the loss or damage in respect of any such part plus the reasonable cost of fitting. (owever the liability of the 4ompany for the cost of such part in the country in which the %otor &ehicle is held for repair, shall be limited to i) the price uoted in the latest price list issued by the %anufacturer or his 'gents for the country, or ii)if no such price list exists, the price last obtaining at the %anufacturerFs 9orks plus the reasonable cost of transport otherwise than by air) to the country and the amount of the relative import duty. .
2/) #uch cars not older than /B years are accepted on comprehensive terms subject to an FexcessF. #ome insurers exclude damage to the windscreen. Imported cars over /B years and less than /= years old are accepted on comprehensive terms with a higher excess. #uch cars over /= years old are accepted for Third 8arty risks only. c- Ca#s i&p#te% $' "#ei+! e&$assies 7 %otor Insurance of 4ars imported by foreign embassies pose a special problem. The embassies are exempted from paying customs duty on the imported cars and at much less price than market price. To obviate the difficulties like under"insurance in case of insurance of such cars, the Tariff provides loading the -.;. premium on such cars by /=M. %- Sp#ts Ca#s " Insurance of #ports cars poses following problems: i) #ports cars are considered to be heavier risks than other cars of the normal type. ii) The repair costs are likely to be higher. iii) These cars which are specially designed for high speed are usually driven by young drivers from affluent families. iv) The loss severity will be high because of the high speed. 8roposal for insurance of these cars is to be considered on the individual merits. The acceptance is subject to an excess, exclusion of personal accident benefits and loading of premium. Q. 6hat a#e the &%el +ui%eli!es #e+a#%i!+ a+e c!si%e#ati!s "# "#esh accepta!ce a!% #e!e*als " p#psals #e;ui#i!+ c&p#ehe!si0e c0e# ! "ll*i!+ 0ehicles, a- Tais $- (%s Ca##'i!+ /ehicles. A!s. a- Tais )!ollowing are the model guidelines regarding age considerations for fresh acceptance of proposals reuiring comprehensive cover on Taxis: i) $pto years 7 4omprehensive cover may be granted
2*) without much considerations . ii) $pto = years " #ubject to inspection and satisfactory claims experience. iii) -ver = years but upto C years " #ubject to inspection with a further compulsory excess of As. =BBB. iv) -ver C years " 'ct only cover should be granted. $pto /B years old vehicles renewal may be done on normal terms subject to satisfactory claims experience. -ver /B years renewals should be offered for 'ct only. $- C&&e#cial /ehicles ) !ollowing are the model guidelines regarding age considerations for fresh acceptance of proposals reuiring comprehensive cover on 4ommercial &ehicles: 1# !oods "arrying Vehicles /Own !oods# i) $pto = years " 4omprehensive cover may be granted without much considerations . ii) -ver = to C years " #ubject to inspection and satisfactory claims experience. iii)-ver C years and upto /B years " #ubject to satisfactory inspection and a compulsory excess of As. *,=BB@ " iv) -ver /B years " 'ct only cover should be granted. v);isposal vehicles " -n inspection and subject to further compulsory excess of As. =BB@" $pto a period of /* years Aenewal to be offered with normal terms subject to satisfactory claims experience. -ver /* years 'ct only cover should be granted on renewal. 2# *ublic "arriers i) $pto = years " 4omprehensive cover may be granted without much considerations . ii) -ver = years and upto 1 years " #ubject to inspection and satisfactory claims experience or additional compulsory excess iii)-ver C years 'ct only cover should be granted. $pto a period of /B years Aenewal to be offered with normal terms subject to satisfactory claims experience. -ver /B years 'ct only cover should be granted on renewal.
2) 6hat a#e the c!stitue!ts " statistical st#uctu#e "# &t# i!su#a!ce7 A!s. Aates of premium for any class of insurance are based on past loss experience. #o is the case with %otor Insurance. In vie view of this his it is most ost essen ssenti tiaal to mainta intain in a deta detaiiled led statistical structure for premium and claims cost for %otor insu insura ranc nce. e. !oll !ollow owin ing g are the the cons consti titu tuen ents ts of stat statis isti tica call structure for motor insurance" tariff provide providess classi classific ficat ation ion 1#"ollect 1#"ollection ion of ,tatistics ,tatistics" The tariff and sub"classi sub"classifica fications tions of vehicles vehicles.. #tatistic #tatisticss of premium premium and claims are also be maintained and collated on the same basis. The The seco second nd aspe aspect ct is the the natu nature re of the the cove coverr provi provide ded d as different rates are provided for -wn ;amage, and 'ct only covers. This aspect is also to be incorporated in the statistical structure. 2# "orrectness of ,tatistics 7 Eike any statistics the value and use of motor insurance statistics depends upon the correctness of the figures and the speed with which they can be produced. &#Inter'retation of statistics " Interpretation of statistics is as important as collation. The claims cost reflects not only the paid claims but outstanding claims. Therefore, it is essential that an effective system is adopted for proper estimates of outs outsta tand ndin ing g cla claims ims be devis eviseed. The The resu resullt of pas past loss oss experience have to be interpreted in the light of changing conditions surrounding motor insurance business. 4# Action on statistics " -nce the claims cost is known, it is possible to develop incurred claims to premium ratio over a reas reason onab ably ly long long perio period d in each each clas classi sific ficat atio ion n to cons consid ider er effecting ing approp ropriate underwr rwriting measures res by the 4ompa ompan nies ies and and rate rate revi revisi sion onss by the Tari Tariff ffss 'dvis dviso ory 4ommittee. Q. 6h 6hat at a#e the p# p#i&a i&a#' #' "act# "act#ss #esp! #esp!si$ si$le le "# Ra% Ra% acci%e!ts7 !ollowing are the four primary factors responsible for A!s. 3 !ollowing Aoad accidents :
20) 1#$he dri)er 7 The largest number of accidents is attributable to driv driver er6s 6s faul fault. t. This This is J(um J(uman an 4aus 4ause6 e6 of acci accide dent nts. s. ;runken driving, over"speeding and other violations of traffic law etc, are responsible for road r oad accidents. 2#$h 2#$hee )e )ehi hicl clee 7 This constitutes F8hysical 4auseF for road accidents and can be summarised as bad maintenance. overloading etc. &#$h &#$hee road road 7 This is F+nvironmental 4auseF and consists of bad road conditions, inadeuate lighting, insufficient traffic signs and signals etc. 4# $he $he 'ede 'edest stri rian an 7 Aeckless or indifferent behavior and disregarding road traffic rules by pedestrian cause accidents. Q. Discuss the Rle " I!su#e#s i! p#&ti!+ Ra% Sa"et' A!s. 'lthough the Insurers have no direct way to play any role role in road road safety safety,, indire indirect ctly ly they they play play signif significa icant nt role role in promoting road safety and preventing road accidents. The following activities of 5eneral Insurance Industry throw light on this role: /) The premium rating structure encourages loss prevention on the part of the motoring public as substantial discounts in the premium are offered if the insured establishes an accident free record. 'gain, premium discounts are offered if the insured is willing to bear a certain portion of the loss himself. These incentives not only result in reduced cost of insurance but also encourage careful driving. *) $nderwriting $nderwriting system followed by insurers involves careful careful Frisks selectionF and Frisk improvementF. This makes indirect contribution to road accidents prevention. ) The Eoss 8revention 'ssociation of India established by the 5eneral Insurance Industry is actively engaged, amongst its other activities, in promoting prevention of road accidents. The 'ssociationFs involvement in road"safety programmes has the objective to reduce and contain the rapidly accelerating rate. The intensive programmes of the 'ssociation are aimed at creating creating awareness awareness of road safety measures measures and traffic
2=) rules for pedestrians and include driver education programmes with special emphasis on defensive driving techniues and specially designed programmes for child"safety on the roads. Q. 6hat a#e the #e&e%ial acti!s "# the #e%ucti! " #a% acci%e!ts7 !ollow owin ing g reme remedi dial al actio ctions ns can can be sugg sugges este ted d for for A!s. !oll reduction of road accidents: 7 !or this 1# $he eliination or iniisation of dri)er error 7 purpose driver education assumes crucial importance. The trai traini ning ng impa imparte rted d by the the moto motorr trai traini ning ng scho school olss must must be intensive and adeuate to provide the skills needed in complex traffic situations. The training should aim at developing in the driver a strong sense of personal and social responsibility for safe operation of motor vehicies. It is also essential that testing standards of Aoad Transport 'uthorities must be of a stringent order. " Aeckless or indifferent 2# I'ro)ing 'edestrian beha)iour " behavior and disregarding road traffic rules by pedestrian cause ause accide idents. nts. To ensu nsure Aoad oad #afet afety y beha behav viour iour of pedestrian is to be improved. This is a long term process. It is essentially a matter of self discipline. #afety consciousness and civi ivic sen sense will have have to be fos fostere tered d righ rightt fro from the elementary school level. #econdly, enforcement of traffic laws by the police and the law courts, will bring about more responsible pedestrian behaviour. &# 3liination of *hysical "ause " ;efective vehicle which is the phys physiical cal cause, use, rank rankss sec second ond among mong the caus causees contributing to road accidents. The uestion has following dimensions i) Aegular maintenance of the vehicle by the owner on a voluntary basis, ii) 4ompul 4ompulsor sory y maint maintena enance nce throug through h strict strict enforc enforceme ement nt of rules rules regard regarding ing period periodica icall inspe inspecti ction on of vehic vehicles les by Aoad Aoad Transport 'uthorities iii) Tachograph to provide irrefutable evidence in case of
21) accidents by giving relevant information about the speed, time and place of accident. It promotes good driving habits and this results in saving of fuel and maintenance costs and reduction of road accidents. iv) 8ost accident repair inspection of the vehicle by both the Insurance #urveyors and the road transport authorities in case of major damage. 4# 5oad safety 7 Transport ;evelopment 4ouncil of the ministry of shipping and Transport has made following recommendations having a bearing on road safety: a) strengthening or creating facilities for highway testing, control and research for consideration of #tate 5overnments in whom is vested the bulk of road construction. !or example, a model scheme for organising #tate testing and control laboratories prepared by the 4entral Aoad Aesearch Institute has been circulated to the #tates for their implementation. b) 8lanning, design and construction of road facilities. c) 'deuate, proper and systematic maintenance of the Hational (ighways and other roads in the country, through regular re"surfacing, routine maintenance operations and >#pecial Aepairs> and >!lood ;amage> repairs. d) 4reation of separate Traffic +ngineering cells in the 8ublic 9orks ;epartment to serve as a focal agency to analyse all the traffic and accident data on a continuing basis, enabling identification of the vulnerable accident:" prone spots and the remedial measures to be adopted.
2C)
CHAPTER 9
MOTOR CLAIMS O6N DAMA(E CLAIMS Q. 6hat a#e the %cu&e!ts #e;ui#e% "# p#cessi!+ a &t# *! %a&a+e clai&7 A!s. The documents reuired for processing the claim are: /) 4laim !orm *) #urvey Aeport @ -fficerFs Inspection Aeport ) ;riving Eicence 0) Aegistration 4ertificate
23) iii- Net Lia$ilit' " I!su#e#) Eabour U 8arts less ;epreciation) " +xcess@#alvage As. i0- (e!e#al O$se#0ati! " These would relate to compliance with policy condition, warranties, etc. This would be followed by surveyorFs recommendation regarding the payment of the claim. If adverse features are involved, the surveyor would leave the settlement uestion to the insurers, giving his reasons. Q. Desc#i$e the t'pes " Lsses O*! Da&a+e- u!%e# Mt# Plicies. A!s. " There are three types of losses described as under: i- Ttal Lss ) /) 9henever a surveyor finds that a vehicle is either beyond repairs or the repairs are not in economic proposition, he negotiates with the insured to assess the loss on a Total Eoss basis " for a reasonable sum representing the market value of the vehicle immediately prior to the loss. If the market value is more than the insured value, the settlement will be brought about for the insured value. The Insured will be paid in case and the Insurers will take over the salvage of the damage vehicle which will thereafter be disposed off for their own benefit calling tenders through advertisement in newspapers. *) Total losses can also arise due to the theft of the vehicle and its remaining untraced by the police authorities till the end. !or arriving at the market value of untraced vehicles, Insurer take the opinion of * or automobile surveyors after giving them necessary information such as make, year of manufacture, past claims, improvements carried, if any, etc. If, say, three surveyors indicate three different figures, the average amount is worked out, which will be taken as the market value, and accordingly the claim will be finalised, depending upon the #um Insured being eual to or more than the market value. ii- Cash Lss Settle&e!t " $nder certain circumstances, Ins"
22) "urers are forced to settle Total Eoss 4laims without claiming the salvage or reimburse the Insured with his repairs bill without submission of repairs bill or without even verifying whether the vehicles is or will be repaired or not. These types of settlements are in the nature of compromise mode and are known as F4ash EossF settlements, which are usually resorted to in the case of 4ommercial &ehicle claims payable on repairFs basis. This mode of settlement is adopted in following circumstances. /) 9hen the claim is assessed for Total Eoss but difficulties are encountered in disposing off the salvage or when a reasonable amount is not forthcoming as value of the salvage. In such cases, the value of the salvage is mutually agreed upon, as recommended by the #urveyor, and this is deducted from the amount of Total Eoss as assessed by the Insured. In other words the Insured is reimbursed the net Total Eoss and allowed to retain the salvage. *) 9hen the insured insists on repairs even though Total Eoss settlement adjusting the salvage value available is more economical to the insurer. ) 9hen the Insured purchases spare parts from market without bill and is not in a position to furnish bills these losses are settled F4ash EossF without insisting on bills for an amount, which is suitable, scaled down. The cash loss settlement is generally offered at 1BM to 3BM of insurersF liability for the loss on repair basis. !ollowing example will make this clear: #uppose net liability after adjusting #alvage value) on repair basis is As. 1=BBB and on total loss basis it is As. ==BBB. The suggested cash Eoss #ettlement may be As. 1=BBB less BM As. /2=BB) As. 0==BB since the liability of insurers is the least among all the three modes of settlement. iii- Repai# Basis " The amount of loss in this mode of settlement consists of repairerFs labour plus cost of parts replaced less depreciation. +xcess if any is also deducted. The salvage is collected by insurers.
/BB) CLAIM PROCEDURE ) O6N DAMA(E Q. Desc#i$e i! $#ie" the p#ce%u#e i!0l0e% i! O*! Da&a+e Clai&. A!s. " The procedure involved in -wn ;amage 4laim can be summarised as under: i- P#eli&i!a#' Steps " -n receipt of notice of loss, the policy records are checked to see that the policy is in force and that in covers the vehicle involved. The loss is entered in the 4laim register and a claim form is issued to the insured for completion and return. The Insured is reuired to submit a detailed estimate of repairs from any repairer of his choice. 5enerally, these repairs are acceptable to the insurers but they at times ask the insured to obtain repair estimate from another repairer, if they have reason to believe that the competence, moral haGard or business integrity of the repairer first chosen is not satisfactory. ii- Assess&e!t " Independent automobile surveyors are assigned the task of assessing the cause and extent of loss. They are supplied with a copy of the policy, the claim form and the repairerFs estimate. They inspect the damaged vehicle, discuss the cost of repair or replacement with the repairer and submit their survey report. In respect of minor damage claims, independent surveyors are not always appointed. The insurersF own officials or their own automobile engineers inspect the vehicle and submit a report. In major losses #pot #urvey is also arranged. iii- Settle&e!t " The survey report is examined and settlement is effected in accordance with the recommendations contained therein and keeping in mind the terms, conditions, exclusions etc. of the policy. #ometimes the repairer is paid directly by the insured in which case the latter is reimbursed on submission of a receipted bill from the repairers. In either case, discharge voucher or receipt
/B/) is obtained. The claims Aegister and the policy and renewal records are marked that the claim is paid indicating the amount of claim and the amount of salvage, if any. Q. Desc#i$e the +e!e#al p#ce%u#e "# settli!+ Mt# Ttal Lss The"t- Clai&. A!s. P#ce%u#e "# settle&e!t " &t# ttal lss The"t- clai&s "%otor total loss claims can also arise due to the theft of the vehicle and its remaining untraced by the police authorities till the end. The procedure for settlement of such claims is as under: 1# irst Inforation 5e'ort lodged with the *olice " These losses will have to be supported by a copy of the !irst Information Aeport lodged with the 8olice authorities immediately after the theft has been detected. The police authorities register the complaint allotting it a number of the entry made in the #tation ;iary. This number, which is usually known as #;+ Ho. or 4.A. H-. 4rime Aegister) has to be uoted by the Insured in the claim intimation to the Insurers. 2# 0ocuents " The insured has to submit a claim form giving narration of the incidence of theft. 'fter lodging the !.I.A. the police keep the investigations going until the vehicle is traced and delivered to its owner. (owever, if they do not succeed in recovering the vehicle after a period of, say "0 months, they file away the case certifying that the case is classified as true but undetected. This certificate is essential before the insurers settle a total loss following theft. The Insured has to submit to the Insurer the Aegistration and Taxation books, ignition keys and blank T-. and T.T.-. forms duly signed by the insured, so that the stolen vehicle when recovered and sold can be transferred in the name of the buyer. If the A.4. book and Taxation 4ertificate are also stolen along with the vehicle, it will be necessary for the insured to obtain duplicate ones from the Aegistering 'uthority and thereafter
/B*) deposit them with the Insurers. The insured will address a letter to the A.T.-. informing about the loss of the vehicle due to the theft along with a Hon"user !orm so that he is not made liable to pay the taxes. 4opy of such letter shall be given to the insurer. It is always prudent to inform to concerned Aegistering 'uthority by a Aegistered '@;@ letter that a total loss claim is being processed for payment in respect of the stolen vehicle and to reuest them not to transfer the ownership of the vehicle to any one. This will prevent the thief from disposing off the stolen vehicle. &# Assessent of Loss " !or arriving at the market value of untraced vehicles, Insurers take the opinion of * or automobile surveyors after giving them necessary information such as make, year of manufacture, past claims, improvements carried, if any, etc. If, say, three surveyors indicate three different figures, the average amount is worked out, which will be taken as the market value, and accordingly the claim will be finalised, depending upon the #um Insured being eual to or more than the market value. 4# ,ettleent - The usual procedure of obtaining the discharge, payment to the financier if any etc., as done in case of settlement of any own damage claim is adopted while settling the claim. The ignition keys, A.4. !c@)"#)@!c@ a+#ee&e!t. A!s. >!c@)"#)@!c@ a+#ee&e!t ) Insurers have entered into an agreement called the Fknock for knockF agreement. 'ccording to this agreement when two vehicles insured under < 8olicy) with two different insurers are involved in an accident, each insurer will indemnify his own insured. In other words the -wn ;amage 4laim shall be settled under the respective policy. The insurers covering own damage will not
/B) exercise subrogation rights against the other party involved. This is in order to avoid litigation to decide the uestion of negligence on the part of the vehicles and the conseuent delay and expenses. This agreement is applicable for private cars insured separately with two different insurers for comprehensive risks. The agreement is not applicable to cases where one@or both the vehicles are used for hire or reward. THIRD PART? CLAIMS Q. 6hat a#e the %cu&e!ts #e;ui#e% "# p#cessi!+ &t# clai&s7 A!s. !ollowing are the documents reuired for processing motor claims are: a# or All "lais /(oth own daage and third 'arty#8 i) 4ompleted 4laim !orm. ii) &ehicular documents such as Aegistration 4ertificate, 8ermit and Trip #heet for verification and return. iii) ;riving Eicence of the driver who drove the vehicle at the time of the accident for verification and return. b# Additional 0ocuents re=uired for Own 0aage "lais8 i) +stimate of Aepairs. ii) #urvey Aeport. iii) 8olice Investigation Aeport for major accidents and for theft claims). iv) !inal
/B0) vi) +mployerFs 4ertificate regarding salary and@or loss of pay. vii) 4ertificate of proof of age. viii) In case of property damage claim 8roof of ownership of property, 4ertificate for value of property and +stimate of repairs for rectification of damage to the property. Q. Eplai! $#ie"l' the p#ce%u#e "ll*e% i! ha!%li!+ Thi#% pa#t' Mt# Clai&s. A!s. ) !ollowing is the procedure of handling T.8. 4laims " /) The first step on receipt of notice of claim from the insured or tribunal is to ascertain whether the vehicles insured on the date of accident. The entry is made in the claims register. *) The case is entrusted to a panel advocate immediately so that the insurers are represented at the very first hearing. ) ' letter is addressed to the insured to furnish the information as to -.;. 4laims details if lodged, name of the 8olice #tation where the accident was reported, driverFs name and address, name of the advocate if the insured has appointed one etc. The insured is also sent a claim form for completion and return. 0) Insurers estimate their liability. In case of death claims, status of the deceased, his monthly income, age, contribution to family, relationship with claimant etc. are taken into consideration. In the event of injury claims %edical Aeport, evidence of medical expenditure, age of injured, his occupation and income etc. are taken into consideration. The aspect of contributory negligence, if any, is also taken care of. =) -n the basis of above information, the advocateFs opinion is obtained. . ;efences available to insurer under the %.&.'ct. are examined. The advocate depending upon the facts of the case then files a written statement. 1) If the liability is certain, an attempt is made to compromise the claim. The claim can be compromised in Eok 'dalat. C) The insured and or the driver are reuired to co"operate with the insurers while regular hearing of the case is going on.
/B=) If they do not, they may be called as witness under #ection /12 of the 'ct. 3)-n completion of the hearing, the tribunal decides upon the claims and award is given. The amount awarded is paid to the claimant as directed by the tribunal. 2) If the insurers are aggrieved by on award of a tribunal, they may prefer an appeal to high court within ninety days from the date of the award. Q. 6hat a#e the i!"#&ati!s #e;ui#e% t %ete#&i!e the ;uesti! " thi#% pa#t' lia$ilit' " the i!su#e% a!% the lia$ilit' u!%e# Mt# Plic'7 A!s. !ollowing informations are reuired to determine the uestion and extent of third party liability of the insured and the liability under %otor 8olicy: a# Inforation re=uired for all ty'es of $.*. "lais8 i) #tatements of the driver and witnesses to the accident. ii) ;etails of the driverFs prosecution, charges, depositions during the criminal proceedings and judgement. iii) ;etails of the accident to decide negligence of the parties involved for deciding the aspect of contributory negligence. b# Inforation re=uired for atal "lais8 i) The post mortem report. ii) The age and status of the deceased, his monthly income, his contribution to the family and the status of the claimant and his relationship with the deceased. iii) ;ependency. c# Inforation re=uired for inury clais8 i) The age, occupation and income of the injured. ii) The nature and extent of the injuries and whether the injury has resulted in permanent disability. iii) The period and expenses for medical treatment. c# Inforation re=uired for third 'arty 'ro'erty clais8 i) The estimated cost of repairs. ii) The depreciation in value of the property. iii) The cost of hiring alternate property or alternatively loss
/B1) of house or loss of profit during the period of repairs. In addition to the above the following information is reuired to determine the uestion of the insurersF liability for third party claims under the %otor 8olicy: a) +xistence of valid insurance cover. b) Eimit of liability under the 8olicy. c) ;efences under the %otor &ehicles 'ct, whether available or not Q. De"i!e Ne+li+e!ce. 6hat a#e the c!%iti!s "# sustai!i!+ ci0il acti! "# !e+li+e!ce7 Discuss the ci#cu&sta!ces i! *hich lia$ilit' "# acci%e!ts th#u+h !e+li+e!ce i! the use " &t# 0ehicles usuall' a#ises. A!s. Ne+li+e!ce ) Hegligence means Fabsence of careF. It is defined as the breach of a duty caused by the omission to do something, which a reasonable man, guided by those considerations, which ordinarily regulate the conduct of human affairs, would do, or doing something, which a prudent and reasonable man would not do. In simple words, negligence means Fabsence of careF. ' civil action for negligence can be sustained when the following conditions are satisfied: i) There must exist a duty of care towards the injured party. ii) 'n action for negligence can proceed only if there is a breach of that duty of care. iii) The plaintiff must prove that he has suffered injury or damage as a conseuence of the breach of duty of care. vi) The injury or damage should be a conseuence of the negligent act. There has to be a close causal relationship between the breach of duty and the injury or damage. Lia$ilit' "# acci%e!ts th#u+h !e+li+e!ce " Eiability for accidents through negligence in the use of motor vehicles usually arises in the following circumstances: /) ;angerous and reckless driving without proper regard to the safety of the pedestrians. *) Hon"observance of the traffic rules and regulations.
/BC) ) Eeaving a motor vehicle unattended on the road or highway without taking proper precaution for its safety. 0) ;efective vehicles. (owever, latent defects of which the owner was unaware do not constitute negligence. The onus is on the defendant to prove that the vehicle was defective or unfit. Q. 6#ite a sh#t !te ! C!t#i$ut#' !e+li+e!ce2 A!s. C!t#i$ut#' !e+li+e!ce ) 4ontributory negligence is the existence of negligence on the part of the affected third party in respect of motor vehicle accidents. If the injured person has also contributed to the accident there is contributory negligence on the part of the injured. The damages will be reduced according to the degree of blame attaching to each person. 4ontributory negligence is one of the defences available to the insured except in case of no fault liability in respect of motor accident third party claims. 4ontributory negligence cannot be attributed to any child victim. The result of successfully establishing contributory negligence on the part of the affected third party is the reduction of compensation. Q. 6hat a#e the De"e!ces a+ai!st Ne+li+e!ce7 A!s. !ollowing are the ;efences against Hegligence: a# Volenti on-fit Inuria.- This legal maxim denotes that if a person voluntarily consents to run the risk, the uestion of negligence does not arise. This defence may arise in passenger claims. 9hen a person has of his own willingness and consent decided to become a passenger in it public service vehicle, then he cannot complain of matters ordinarily incidental to traffic in such vehicles. b# Ine)itable Accident " This is an accident which occurs inspite of ordinary care, caution and skill. The burden to prove that accident was inevitable rests upon the driver. (e must establish the cause of the accident and also that the result of that cause was inevitable.
/B3) c# Act of !od ) This has been defined as an event due to Fnatural causes directly and exclusively without human interventionF. +xamples of acts of 5od are storms, earthuake, lightning etc. d# 3ergency) If a person in a moment of imminent danger, acts in a way which causes injury to another, he will not be held liable in negligence if his act was not unreasonable in the difficult situation in which he was placed. #ometimes a pedestrian using a road may unexpectedly cause the driver of oncoming vehicle, to swerve and thereby cause injury to another pedestrian, then the driver would be able to raise the defence of emergency.
Q. Disti!+uish $et*ee! Special Da&a+es a!% (e!e#al Da&a+es. A!s. ;amages are the pecuniary compensation recoverable by civil action for breach of contract or for tort. ;amages for personal injury claims fall into two categories: 1# ,'ecial daages- These are the damages, which can be calculated accurately from records of actual expenses incurred, or financial losses e.g. loss of salary etc.) suffered. - !eneral 0aages % These are the damages, which cannot be calculated from record and therefore estimated by the 4ourts taking into account a number of factors relevant to individual cases. 5eneral ;amages comprise compensation for pain, suffering and distress, loss of enjoyment of life and loss of amenities etc. Q.Desc#i$e the p#i!ciple applica$le i! c&putati! " %a&a+es "# %eath8 pe#s!al i!=u#' a!% p#pe#t' lss %ue t a! acci%e!t. A!s. 1- C&putati! " %a&a+es "# %eath 7 The principles adopted for the assessment of general damages in death cases have been well settled in three decisions of the #upreme 4ourt
/B2) which are based upon famous +nglish decision in ;avis &s., 8owell. 's per these decisions, the following basis is adopted: a) The amount of wages earned by the deceased ascertainment to some extent may depend upon the regularity of his employment). b) The amount that would have been spent by the deceased for his personal and living expenses, had he been alive. c) Humber of years of purchase or multiplier in regard to the remaining life of the decreased had he not died in the accident. d) $ncertainties relating to claims, for instance that the widow might have remarried and thus ceased to be dependent or other like matters of speculation. The balance amount of income after deducting the estimated personal and living expenses for the deceased per year would be turned into a lump sum, multiplying the stun by the number of years of purchase. This lump sum, however, has to be taxed down having due regard to uncertainties as stated against factor d) above. Eord 9rightFs %ethod" This method involves multiplying the dependency amount of what the deceased would have spent on the dependents by the common accepted multiplier of /* to /= which is known as the Kear 8urchase !actors. - C&putati! " %a&a+es "# pe#s!al i!=u#' ) ;amages for personal injury claims fall into two categories: a- ,'ecial daages - #pecial damages comprise the following expenses: actual loss of earnings, suffered as a result of in:ury; medical, nursing or other expenses necessarily incurred as a result of the in:ury and funeral expenses in case of fatal in:ury. The above expenses are computed up to the date of settlement of judgement.
//B) ise $- !eneral 0aages - 5eneral ;amages comprise compensation for the following: i) pain, suffering and distress, ii) los loss of enjoyment of life and loss of amenities, iii) loss of re recreational ab ability and@or iv) loss of of re reduced ex expectation of li life 5eneral damages may also be awarded for i) the on"going ne net lo loss of of ea earnings p prospective lo loss of income) ii) the on on"going me medical nu nursing or or ot other ex expenses likely to be incurred in the future as a result of the injury suffered. future medical expenses. iii) loss of opportunity in the job market iv) loss of matrimonial prospects e.g. a young unmarrie ried woman man suffering ing severe facial disfigurement may lose her matrimonial prospects. The courts suitably adjust the value of future losses, upwards or downwards, to reflect i) Immediate receipt of money with potential for earning investment income. ii) -ther be benefits re received by by th the le legal he heirs thro throu ugh succession to properties or moneys of the deceased. iii) The ch changing ci circumstances of of life life.. !o !or exa example, the widow remarrying or the risk of early death due to other causes. iv) Inflation or or th the fa falling va value of of mo money. 4- P#pe#t' Da&a+e "In respect of damage to property e.g. goods) the measure of damages is the cost of restoration of the property to the original position. The measure of damage takes takes into consideration the depreciation in the value or loss of use or loss of profit or the cost of hiring another property during the repair. In other words, if the property is totally destroyed, the measure of damages is the value of the property.
///) only damaged the measure is the depreciation in its value supplemented by the amount representing the loss of use of the property when it is being repaired or replaced. (owever, in practice, its application may vary according to circumstances of each case. Q. 6hat a#e the lss c!t#l &easu#es a%pte% i! Mt# P#t"li7 A!s.) !ollowing measurers can be suggested to control motor losses 7 a- O.D. Clai&s, i# 3'anelent of ,ur)eyors " #urveyors having automobile back drown should only be impaneled. The panel should be classified into major, medium and minor categories depending upon the experience, uality of work and efficiency of the surveyor. ii# A''ointent of ,ur)eyor " 'ppointment should be done immediately. The same surveyor should not be appointed for successive claims. +stimate tess of profes professio sional nal estim estimat atee makers makers iii# 3stiates 3stiates " +stima should not be entertained. i)# ,ur)ey " !inal survey should be done at the workshop from where the estimate has been obtained. #urveyor should give identification numbers or marks of the radiator, battery and major assemblies like chasis, front axle etc. !or cabin and body the surveyor should mention material costs and labour charges separately. 9here necessary, surprise inspection of vehicles under repair at workshop should be done by the officer of the company. #urveyor should submit his report immediately with photographs initialed and dated. Aeinspec ectio tion n of the vehicl vehiclee after after repair repair )# 5eins'ec 5eins'ection tion - Aeinsp should be done by a surveyor other than the final surveyor who assessed the loss. nsuree the the accu ccurac racy and )i# )i# Ve Veri rifi fica cati tion on of bill billss " To ensur bonafides, bills submitted submitted by the insured should be scrutinised
//*) by the surveyor. )ii# ,al)age " In small losses, fair value of salvage should be deducted from the assessed loss. 9here salvage is collected it should be disposed off immediately. 8erfect record of #alvage should be maintained. )iii# 5e)iew of *ending "lais " 8eriodical review of pending clai laims should be done. If the claims are pending for compliance from insured, noticed should be given to comply within a stipulated time. 5iving second notice the insured should be informed that the claims shall be treated as Ho claim in case of non"compliance of formalities in stipulated time and thereafter the file should be closed. 9hile acce accept ptin ing g moto motorr i# ,trict ,trict underw underwrit riting ing contro control l " 9hile business, strict underwriting underwriting control should be exercised. exercised. $- Lss c!t#l &easu#es "# T.P.Clai&s " #ince in third party claims the tribunal awards the compensation, loss can be mini minimi mise sed d by defe defend ndin ing g the the clai claim m in effe effect ctiv ivee mann manner er.. !ollowing measures may also be taken: officerr assig assigned ned this this functi function on should should i# In)estiga In)estigationtion- 'ny office make Fon the spotF investigati investigation on and obtain information information about the age, occupation, income etc. of the dece deceas ased ed@i @inj njure ured. d. 9here 9hereve verr nece necess ssar ary, y, corre correct ct insur insuran ance ce particulars from the AT- should be obtained and furnished to the advocate for the insurance company. J8repa para rati tion on of of pane panell of ii# ii# *ro' *ro'er er >se >se of Ad)o Ad)oca cate tess" J8re advocates and entrustment of cases to them on a rotation basis, ensuring that no 'dvocate should have more than /B cases at any given time. The advocate appointed to defend on behalf of the company and the insured, should be furnished a certified true copy of the related policy. The annua nnuall perfor rforma manc ncee iii# *erfor forance a''raisal " The appra apprais isal al of the advo advoca cate tess for defe defend ndin ing g the the case casess befo before re %'4T. statutory i)# ,tatutory defences- !urnishing the particulars of statutory defences available to the insurers under #ec. /02*) of %.&.
'ct /233 to the panel advocate and ensuring that the plea in regard to proper defence is taken in the written statement filed on behalf of the insurer, )# "o'roise settleent of the T8 4laims, especially through Eok 'dalats. )i# 3'editious settleent of awards which do not warrant appeal and there by save payment of further interest. In view of the deteriorating experience of the motor insurance portfolio which is causing concern to the industry, it is necessary to adopt effective loss control measures.
//0)
CHAPTER 1
PRACTICAL PROBLEMS Q. Due t su%%e! $#ea@a+e " stee#i!+ #%8 a p#i0ate ca#8 %#i0e! $' a pai% %#i0e#8 +es "" the #a% a!% clli%es *ith the c&pu!% *all a!% +ate " a "act#'. The i!su#e% has su$&itte% a clai& u!%e# a p#i0ate ca# c&p#ehe!si0e plic' i! #espect " the "ll*i!+ , a) Aepair of damage to the radiator and engine. b) Aeplacement of left front tyre totally damaged. c) Aeplacement of steering rod. d) Aeplacement of windscreen, which was smashed to pieces. e) 4laim from the paid driver $nder 9.4. 'ct) for temporary total disablement due to injuries sustained in the accident. Indicate how you would deal with each of the above items of claims from the point of view of: i) Eiability under the policy. ii) 'mount of claim payable. A!s. a- Repai# " %a&a+e t the #a%iat# a!% e!+i!e " Insurers are liable under the policy and actual cost is payable. $- Replace&e!t " le"t "#!t t'#e ttall' %a&a+e% " Insurers are liable under the policy and actual cost is payable. "
//=) date of disablement where such disablement lasts for a period of less than twenty"eight days. -n the ceasing of the disablement before the date of which any half monthly payment falls due, there shall be payable in respect of that half"month a sum proportionate to the duration of the disablement in that half month. The compensation under this clause is payable for maximum = years. Q. Discuss the i!su#e#s lia$ilit' u!%e# Sta!%a#% Mt# Plicies JB "# "ll*i!+ clai&s. a) Eoss of horn by theft from a motor cycle. b) 'ccident damage to an ornamental hub"cap of a private car. c) ;amage to the cabin due to an accident to a public carrier, the estimated repair cost of which is As./0C=@". d) ;eath of an employee of the owner of the goods carrier who was travelling in the lorry at the time of the accident. A!s. a) #tandard %otor 4ycle 8olicy does not cover the loss of or damage to accessories by burglary, house"breaking or theft unless the %otor 4ycle is stolen at the same time. (ence the insurer is not liable, for the loss of the horn, an accessory by theft from a %otor 4ycle. b) +xtra fitting are to be covered specifically. The ornamental hub cap is an extra fitting. Insurer is not liable under the standard %otor 4ar 8olicy < for its loss of or damage unless it is got covered by specifically adding this hub cap as extra fitting. c) The standard %otor 8olicy < covering a public carrier is subject to a compulsory excess of As. /=BB as per the endorsement Ho.*1. #ince the estimated repair cost is less than As. /=BB, there is no liability under the 8olicy. d) $nder the %otor &ehicles 'ct in respect of a lorry goods vehicles) it is reuired to cover employees being carried in the vehicle. (ence the insurer is liable for employee of the owner of the goods carrier who was travelling in the
//1) lorry at the time of the accident. Q. The i!su#e% +i0es the ca# @e's t his *atch&a! e0e#' %a' "# clea!i!+ the ca#. O!e %a' the *atch&a!8 a"te# clea!i!+ the ca#8 %#0e it utsi%e the $uil%i!+ c&pu!% *ithut a 0ali% %#i0i!+ lice!ce a!% &et *ith se#ius acci%e!t8 #esulti!+ i!t %a&a+e t ca# a!% se#ius i!=u#ies t a pe%est#ia!. The i!su#e% is ha0i!+ P#i0ate Ca# Plic' B "# the Ca#. Discuss the I!su#e#s Lia$ilit'. A!s. " !or admission of liability under the policy, the watchman driving the car at the time of accident must hold a valid driving licence entitling him to drive E%&. In the instant case the watchman who drove the car at the time of accident was without a valid driving licence. (ence the insurers are liable neither for damage to car nor for personal injuries to the pedestrian. Q. A Luu#' Tu#ist Bus 19: M%el ca##'i!+ 4 passe!+e#s *as i!0l0e% i! a se#ius acci%e!t ! .G.9 #esulti!+ i! %eath " D#i0e# a!% t* passe!+e#s a!% i!=u#ies t 1 passe!+e#s. Bus *as i!su#e% u!%e# plic' B *ith u!li&ite% lia$ilit' t passe!+e#s. Othe# %etails a#e as u!%e#, a) Insured of As. 0BBBBB b) !atal injuries to paid driver As 3BBBB c) !atal injuries to two passengers As. /=BBB each) d) %inor injuries to /= passengers As. 3BBBB total e) Aepairs As. =BBBB f) Aeplacement of parts As. *=BBB g) #alvage As. BBB i) ;iscuss the insurerFs liability. ii) 9ould the position be different in case the driver was holding E%& driving licence and had applied for (%& licence on /./*.32 to the A.T.-. A!s. ) i- P#esu&i!+ that the %#i0e# *as hl%i!+ 0ali% %#i0i!+ lice!ce 7 with an endorsement to drive transport
//C) vehicle and was also possessing badge, the insurers are liable under the policy to pay the claim as under: a) Ho relevance except in the case of total loss. b), c) and d) payable under #ection II of the policy presuming the amount is awarded by the court or compromised. e, f) and g) " The amount payable will be as under: Aepairs As. =BBBB Aeplacement of 8arts As. *=BBB Eess: depreciation for the age of vehicle being between to 0 years: =BM for rubber, 8lastic 8arts, and battery and *=M for other parts replaced. If the damages include tyres, lamps, mudguards, bonnet side parts, bumpers and paintwork they are excluded under +ndt. Ho. *1. Eess: +xcess as per +ndt. Ho *1 As. /=BB Eess: salvage As. BBB ii- P#esu&i!+ that the %#i0e# applie% "# HM/ lice!ce " The vehicle in uestion is (.%.&. The driver is holding E%& licence. %ere applying for (%& licence does not entitle the person to drive
A!s. a) +ndorsement Ho.*1 does not cover the loss of or damage to tyre. (owever by paying extra premium it can be covered under I%T C0 b) Ho additional cover @extra benefit can be granted under an 'ct 8olicy. 8'. cover to the owner can be granted in
//3) 4onjunction with < 8olicy only. c) It is not permissible as per the %otor Tariff to issue 8olicies in joint names. The financierFs interest can be recorded in the 8olicy be way of endorsement. d) The '.'. %embership discount can not be allowed on vehicles owned by firms or companies as it is available only for vehicles owned by individuals and joint owners. Q. A +%s ca##'i!+ 0ehicle +e!e#al ca#ta+e- is i!su#e% u!%e# C&&e#cial /ehicle B Plic' *ithut et#a $e!e"it. It &et *ith a! acci%e!t i!si%e a "act#' c&pu!%. Fll*i!+ clai&s ha0e $ee! l%+e%, a) ;amage to the mudguard and@or bonnet side parts, head light and bumper the estimated loss of which is As. *BBB@". b) ;eath of a coolie carried in the vehicle. c) ;amage to the car of the owner of the goods carrying vehicle which happened to accompany the lorry inside the private place at the material time of the accident. d) Injury to the driverFs friend travelling in the vehicle. e) ;amage to stereo. (ow will you deal with claimsV A!s. 'lthough the accident occurred inside a factory compound which is not a public place it is covered under the < 8olicy. The claims shall be dealt as under: a) ;amages to the mudguard and@or bonnet side parts, head light and bumper are excluded under I%T Ho.*1. (ence there is no liability under the policy. b) The insurers are liable under #ection II of the policy. c) #ection II of the 8olicy excludes liability in respect of damage to property belonging to the insured. (ence no liability. d) The driverFs friend was travelling in the vehicle as a non" fare paying passenger and not in the course of or arising out of any employment. The insurers are not liable for his injury claim as policy is without extra benefit for legal liability to non"fare paying passengers.
//2) e) +xtra fitting are to be covered specifically. The stereo is an extra fitting. Insurer is not liable under the 8olicy < for its loss of or damage unless it is got covered by specifically adding it as extra fitting. Q. State8 *ith #eas!s8 the ete!t " lia$ilit' " a! i!su#e# u!%e# app#p#iate sta!%a#% "#&s " Mt# Plicies B,) a) Insured was driving his own 5oods 4arrying &ehicle 5eneral 4artage, and suffered personal injury due to accident. (e claimed for 9orkmenFs 4ompensation. b) Theft of a rear left tyre of contract carriage from the parked place. 8olicy is subject to +ndorsement *1. c) Tape Aecorder"cum"Aadio stolen from a 8rivate car at the spot of accident. d) ;amage to a motor cycle whilst the insured was participating in organised racing. e) ;ue to a mechanical defect, the steering rod of a Tourist Taxi, breaks and meets with an accident. Insured claimed damages to steering rod, head lamps, front bumper and right mudguard. f) Eoss of the insuredFs limb due to accident whilst travelling in his car. A!s. a) Though the insured was the driver of the vehicle, he is not employee. #o he can not claim for 9orkmenFs 4ompensation. b) $nder I%T *1 +xcept in case of Total Eoss the insurers are not liable for loss of or damage to lamps, tyres, mudguards and@or paint work. (ence there is no liability for theft of a rear left tyre of contract carriage from the parked place. c) e) +lectronic items and +xtra fitting are to be covered specifically. The Tape Aecorder"cum"Aadio is an extra fitting. Insurer is not liable under the 8olicy < for its loss of or damage unless it is got covered by specifically adding it as extra fitting. d) ;amage to a motor cycle whilst the insured was participating in organised racing is not payable as policy
