Third Party Liability insurance is mandatory for all vehicles plying on public roads in India. This covers Liability for injuries and damages to others that you are responsible for. In addition, it is prudent to cover loss or damages to the vehicle itself by way of Comprehensive/Package policy, which covers both “Liability” as well as “Own damage” to the insured vehicle. Liability Only cover is also known as Act Only cover.
Common motor insurance categories include:
- Car Insurance
- Two Wheeler Insurance
- Commercial Vehicle Insurance, Further Classified
- Goods carrying vehicles
- Passenger carrying vehicles
- Motorized rickshaws
- Taxis
- Buses
- Miscellaneous Vehicles
- Hearses (funeral van)
- Ambulances
- Cinema Film Recording & Publicity vans
- Mobile dispensaries etc
Type of Policies:
For all classes of vehicles, there are two types of Policy Forms
Form "A" (To cover Act Liability): Form “A” is called “Standard Form for “A” Policy for Act Liability”. This form applies uniformly to all classes of vehicles, whether Private Cars, Commercial Vehicles, Motor Cycles, Motor Scooters with suitable amendments in “Limitations as to Use”.
Form B (To cover own damage +Act Liability) : This policy provides the so-called ‘comprehensive’ cover and the structure of the policy form is the same for all vehicles, (with some differences which are pointed out, wherever applicable)
Section I : Loss or Damage (or “Own Damage”). The risks covered are:
- Fire, explosion, self-ignition or lightning.
- Burglary, house breaking or theft.
- Riot and strike.
- Earthquake (fire and shock damage)
- Flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost.
- Accidental external means.
- Malicious act.
- Terrorist activity.
- Transit by road, rail, inland waterway, lift, elevator or air.
- Landslide /rockslide.
Exclusions:
- Consequential loss
- Depreciation
- Wear and tear
- Mechanical or electrical breakdowns, failures or breakages
- Damage to tyres unless the vehicle is damaged at the same time. (Then, 50% of cost of replacement payable). For commercial vehicles, see Compulsory Excess Clause dealt with later
- Loss when the vehicle is driven under the influence of intoxicating liquor or drugs
Notes: 1. In the motor cycle and commercial vehicle policy there are additional exclusions :
(1) Loss of or damage to accessories by burglary, housebreaking or theft unless the vehicle is stolen at the same time.
(2) In commercial vehicle policy, there is a further exclusion: Damage caused by overloading or strain of the vehicle