Motor insurance accounts for a major portion of the miscellaneous premium income of insurers. This is a tariff class of business.
For insurance purposes we can clarified motor vehicles into three board categories
- Private Cars
- Motor cycle and scooters
- Commercial vehicles- 1) Goods carrying vehicle
- Passenger carrying vehicles etc. Motorised Rickshaws, Taxis, Buses.
- Miscellaneous vehicles eg. Ambulance, cinema film recording & publicity van
- Mobile dispensaries & cranes
- Motor trade (vehicle in showroom & Garages)
Two type of loss arises in respect of motor vehicles, loss or damage to the vehicles and third party liability.
25% Discount given for vintage cars, classic car club of india, is given an own damage premium.
- Two important types of cover are granted
- Act only (liability) policy – As per motor vehicles Act it is mandatory for any vehicle playing in public place to insure liabilities towards third parties.
The policy only covers all vehicle owners legal liability to pay compensation for A) Third party bodily injury or death B) Third party property damage.
Liability is covered for an unlimited amount in respect of death and damage.
- Package policy/ Comprehensive Policy (Own policy + Third party liabilities) Additional perils are fire, theft, riot and strike, earthquake, flood, accident etc.
An motor policies important exclusive are wear and tear, breakdowns, consequential loss, loss due to driving with invalid and valid driving license, influence of alcohol, use of vehicle not in accordance with limitations as to use i.e private car being used as a taxi is not covered.
Rating /Premium calculation depends on factors like the insured declared value, cubic capacity, geographical zone, age of vehicle etc.