Only, as per the Motor Vehicle Act, all the vehicles plying in the Territorial Limits of India must possess an Act Policy at all times. The violation is punishable with fine etc., as per Motor Vehicle act (as prevalent at the time of detection)
What is covered? Policy (A) covers risks required to be covered under the motor vehicles act. It is mandatory that every car owner be covered against act risks under section 146 of motor vehicles act 1988.
• The scope of cover is to pay compensation for death of or bodily injuries to third parties and damage to the property of third parties. While the insured is treated as the first party and the insurance company second party, all others would be third parties
• As per requirements of the motor vehicles act, while compensation for personal injuries to third parties is unlimited, property damage is limited to rs.6000 only. This limit can be enhanced on payment of additional premium.
Policy (B) (comprehensive)A Comprehensive Insurance Policy, which provides reimbursement of expenses incurred on repairs of accidental damage to the Vehicle due to an accident falling within the scope of policy in addition to the Act Policy (Motor Policy A) as depicted hereunder:
• The perils covered are:
• Policy b can be restricted to loss or damage due to fire or theft or both fire & theft in combination with policy a or without
• The geographical limits for use of the vehicle is India but the limits can be extended to Nepal & Bhutan without extra premium and to Bangladesh by charging an extra premium of Rs.50 for comprehensive policy and Rs.10/ for act policies
• Policies can be issued for periods less than one year. In such cases, short period scales are charged, which are higher than pro-rata rates. Long-term policies can be issued for "act" only risks.
• No claim discount: for every claim free year, the insured is rewarded with discounts in premium up to an extent of 65% (policy b only). In case of adverse claims, premiums are loaded with malus.
Policy A
Premium rating for private cars is based mainly on:
• Power of the engine (by its c.c.): up to 1500 c.c. engine or over 1500 c.c
• Extra benefits on payment of additional premium:
The following benefits can be availed on the payment of an additional premium
• Also, by payment of Rs. 50 per passenger, legal liability to employees while traveling or driving (not as paid driver) is covered
• On payment of Rs. 15, a wider cover than the standard liability available under workmen's compensation act can be availed of.
• Personal accident cover up to Rs. 200,000, while traveling in an insured car, can be obtained on payment of additional premium
• Third party property damage limits can be increased from rs.6000 to unlimited levels on payment of an extra Rs.50
a. Insured can avail discounts if he chooses to exclude the following covers:
b. If the insured is a member of recognized Automobile Association in India, he gets a 5 percent discount to a maximum of Rs. 100
c. Driving safely earns you discounts that could range from 20 - 60 per cent of the premium amount. (No claim discount)
Similarly - filing for claims may result in withdrawal of claim or charging of additional premium to the extent of 10 - 50 per cent of the premium. So, one should avoid filing claims for small damages.
d. Having a car financed or leased reduces the premium by about 5 percent.
e. Cars above engine capacity 1500cc attract a higher premium than the ones below 1500cc
f. Declaring the correct market value is important as the premium charged depends on the market value. Cars manufactured in the same year differ up to a maximum of 5 -10 per cent in their market values.
