Motor Vehicle Insurance

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What is motor insurance?

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Motor insurance is a combination of two words i.e. Motor + insurance Motor under the motor vehicle Act is a self-propelled vehicle Insurance we already know is protection against any unforeseen risk The unforeseen risk is an incident, which cant be foreseen i.E. Which may or may not happen

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It may result in to either creation Of liabilities OR

Will result in to financial losses

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Introduction
Globally motor insurance is the biggest and fastest growing General insurance portfolio and India is no exception to it. It accounts for more than 45% of the Total general insurance premium Income in india In the year ending 2009, total nonlife Premium of the industry was About 28,000 crores out of which Motor share was about 13,000 crores 4/23/12

Some of the factors responsible for this growth are: Increase in earning capacity of Individual

Change in priorities of life

Explosive growth of automobile Industry

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Introduction of cheap auto

Why Motor Insurance?

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About 300 persons are being killed on road accidents daily and about 10,00,00 are being injured annually The incidence of road accidents to number of vehicles in India is alarmingly high in comparison to developed countries: The number of road accidents per 10,000 vehicles in India is about 120 as against 10 in the developed countries of the world The number of deaths per 10,000 vehicles in India is 55 as against 2 in the west. 4/23/12

In 1990, traffic accidents were worlds ninth biggest cause of death and it is expected to become the third biggest by 2020. Study undertaken by the world health organization reveals that road accidents are the second and third biggest cause of death in the age group of 5-29 and 30-44 yrs respectively. The Indian situation is amongst the worst in the world ,i.e. ,Share of 4/23/12

REMEDIES
The motor vehicle act has therefore made the third party insurance compulsory It a punishable offence to use the vehicle without insurance Failure to comply the provisions of SEC.146 of the MV act is punishable by an imprisonment of three months or a penalty of Rs. 1000 or both (SEC.196 of the 4/23/12

Types Of Policies
The policy which is mandatory to Be taken in order to meet the Requirement of the motor vehicle Act is, liability only policy, And The second policy is the choice of The owner of the vehicle i.e. He May or may not take this policy, Known as, package policy.

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Liability Only policies

The policy covers the vehicle owner's legal liability to pay compensation for: Death or bodily injury to a third party person. Damage to third party property. Liability is covered for an unlimited amount in respect of death or injury and damage to third party property for Rs.7.5 lacs under Commercial vehicle 4/23/12 and private and Rs. 1 lakh for

Package Policy
In addition to the coverage under liability only, this policy covers loss or damage to the insured vehicle and its accessories due to: Fire, explosion, self-ignition or lightning. Burglary, housebreaking or theft. Riot and Strike. Malicious Act. Terrorist Act. Earthquake (Fire and Shock) Damage. Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone and Hailstorm. Accidental external means. Whilst in transit by road, inland waterway, lift, elevator or air. 4/23/12 By landslide/Rockslide

Coverage
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Bodily Injury Coverage

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Bodily Injury Liability

This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone elses car with their permission.

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Medical Payments or Personal Injury Protection (PIP)

This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. In some cases, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

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Uninsured and Underinsured Motorist Coverage

This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also 4/23/12

Property Damage Coverage

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Property Damage Liability

This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone elses car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other

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Collision
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. Even if you are at fault for the accident, your collision coverage will reimburse you for the 4/23/12 of repairing your costs

Comprehensive Physical Damage

This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.

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Coverage Limit
Your auto insurance coverage limit is the highest dollar amount an insurance company will pay if you make a claim on a covered loss (that's insurance-speak for any losses that fall within the bounds of your policy). The higher your coverage limit, the more the company pays, but the higher your premiums will be to obtain that coverage. Lowering your coverage limit is a good way to bring your premiums down and save money now, even if you may need to pay more out-of4/23/12 pocket later, after an accident.

Deductibles:
Your deductible is the amount of money you agree to pay out-ofpocket (on your own) when you make a claim covered by your policy. This means, for example, that if your repairs cost $1,500 and you've set your deductible at $500, theoretically, you'll pay the first $500, and the company will pay the remaining $1,000 to get your car 4/23/12

The important exclusions under the policies are:

Wear and tear, breakdowns Consequential loss Loss when driving with invalid driving license or under the influence of alcohol. Loss due to war, civil war, etc. Claims arising out of contractual liability. Use of vehicle otherwise than in accordance with `limitations as to use ' (e.g. private car being used as a taxi)
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Premium
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25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records. Gender - Women are statistically safer drivers, but that trend is changing as more female drivers get on the road. young unmarried male drivers have more accidents and expect to pay more premium ( because they have more moving violations and license suspensions). Marital Status - A married person will pay less than a single person with an identical driving record. Geography Also known as Rating 4/23/12 Territory- different locations have

Auto Insurance Premium Factors Age - Statistically, drivers under the age of

Vehicle Type The year, make and model of the vehicle impacts the insurance costs. Expensive replacement parts and body repairs due to the body style may also increase the cost of insurance. Other car models such as Mercedes, Corvette have higher theft rates thus increasing the cost. Accident Claims The number of claims that you file also affects the rate of premiums. Expensive liability settlements and extensive property damage increases the rate of premiums. Driving record - If you have poor driving record, then the insurance company may cancel your policy. You therefore get the assigned risk Pool where you pay several times the regular rate until your 4/23/12 driving record improves.

Driving Violations - The more driving violations you have , the higher the premium you pay. Number of miles driven - Drivers pay more when they put more miles on their car annually because it increases risk. Most auto insurance companies provide discounts for low mileage. Coverage - Auto insurance calculates premiums based on the number of coverage selected by the driver, deductibles, and payment limits. The more coverage, the greater the cost. However, drivers can elect to raise deductibles and lower payment limits which reduces the cost of the auto insurance. Discounts - Auto insurance provides discounts for car safety features including daytime running lights, airbags, and theft 4/23/12 prevention systems. It also provides

Miles driven- Drivers pay more when they put more miles on their car annually because it increases risk. Most auto insurance companies provide discounts for low mileage. Credit Rating- Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. A better credit score will save on insurance premiums.

Occupation - Insurers have statistically found a correlation between your 4/23/12 occupation and risk. For instance, a

Discounts: Discounts for Safe Drivers: Premier Discount: If you've been safe on the road and accident-free for the past three years, and you're also clear of any moving violations, you might qualify for our auto insurance Premier Discount Defensive driver class discount : If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Discounts for Safe Cars: Passive Restraint Systems: If your car came equipped with airbags, or factory-installed motorized seatbelts, you could receive a Passive Restraint Discount on your auto insurance. Auto Safety features: Certain states will give you discounts for anti-lock breaks, alarm systems, fuel shut 4/23/12 off, and second ignition. These reduce the risk of theft,

How do you reduce the Premium

Good Student discount : If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. Multiple vehicles discount- This will only apply if you have two or more drivers. Safe driver's discount - If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver's discount.

Deductibles - Buying a policy with higher

deductibles will save you money. Have a policy with no lapse in it. Renewing 4/23/12 on time and avoiding cancellations, due to

Claims
Type of losses: Total loss (accidental) When insured vehicle is damaged to the extend that repairs is uneconomical to the company or cost of retrieval exceeds the idv. If assessed value of the loss exceeds 75% of Insured declared value (idv). Total loss (theft) When physical presence of vehicle is not there i.e. Vehicle is stolen. Partial loss (accidental) Repairable loss occurring due to an insured peril. Partial loss (theft) Theft of parts/ accessories. Accessories covered only in private cars.
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Claims Procedure
Immediate notice of loss in writing to be given For accidental losses, estimate of repairs and claim form to be submitted For loss due to theft of vehicle, a copy of F.I.R. along with a claim form to be given To appoint a surveyor for assessment of loss/ an 4/23/12

Original R/C, D/L to be produced Repairs can be started in case of partial loss, after initial verification by surveyors Claims are subject to compulsory excesses In case of total loss, limit of liability will be idv Any dispute regarding quantum of claim amount has to be referred to an arbitrator 4/23/12 Time limit for filing a suit after

Insurance fraud
soft auto-insurance fraud: filing more than one claim for a single injury filing claims for injuries not related to an automobile accident misreporting wage losses due to injuries reporting higher costs for car repairs than those that were actually paid Hard auto-insurance fraud: staging automobile collisions filing claims when the claimant was not actually involved in the accident submitting claims for medical treatments that were not received inventing injuries illegally register their car to a location that would net them cheaper insurance rates than where they actually live, sometimes called "rate evasion". "fronting: registering someone other than the real primary driver of a car as the primary driver of the car. 4/23/12 falsely report their vehicle as stolen

Factors To Consider Before Buying Auto Insurance

Personal injury or personal liability -Always put you and your family's safety before anything else. Personal injury or personal liability coverage should be given great importance when putting together an insurance package. During accident situations, health insurance is the first thing requested by any medical facility treating you. If you don't have health insurance, load up this option with hefty coverage that will pay 4/23/12 for any medical expenses

Uninsured drivers -According toan Insurance Research Council (IRC) study, if someone is injured in an auto accident, the chances are about one-inseven that the at-fault driver isuninsured. Don't trust other drivers and don't take for granted that they will have as good of coverage as you do. Though it can be hard to digest that you must pay apremiumand thedeductiblefor someone else's mistake, it's better than forgoing this coverage and risking losing your 4/23/12 vehicle.

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Major accidents -You should never neglect the worst-case scenario when selecting insurance. What if your car is totaled and needs to be replaced? If the accident is not your fault, the other driver's insurance (or your uninsured motorist coverage) will pay for the vehicle. But there are other situations and natural calamities that can also destroy your vehicle, and in those cases, you'll only be able to rely on your own insurance. In case such a situation arises, it is better to have enough coverage to fully repair or replace your vehicle.

Deductible vs. premium -The insurance deductible is inversely proportional to the premium amount. If the deductible goes up, the premium goes down, and vice versa. This relationship reflects whether you prefer to pay more or less from your own pocket before stretching out your hand to the insurer. Whichever option you choose, make sure you can afford it. Some people are better off paying a higher monthly premium in exchange for a lower deductible to avoid any large payments after an accident.
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Quality and age of your vehicle- A new vehicle probably will not break down for at least a year or two, so your towing coverage should be minimal (though flat tires are still a concern). Some dealers even offer free towing for mechanical breakdowns on new cars. However, a new car will also be expensive to fix or replace in the event of an accident, so make sure your choice of coverage reflects this.
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Driving experience -Many insurance companies automatically recommend certain coverage for particular drivers. For example, if you have a teen driver at home, it is better to have good personal liability coverage with a lower deductible because new drivers are prone to making mistakes. On top of that, rates to cover teen drivers will automatically be higher because of their lack of driving experience. Try not to let the higher rates prevent you from getting 4/23/12

Best Auto Insurance Must Have These Qualities

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Provide Multiple Quotes

Due to your cars age you may not need full coverage. Or you may not need theft protection. A good company would base your quote on your needs and not their personal commissions gain.

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Taking Care of Claims In Timely Fashion

This is where the rubber meets the road. Does this company have a good reputation for coming out and assessing claims in a reasonable time. Or will they screw around with your time and money. Ask specific questions on their policy about this.

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Weve all seen the billboards and commercials about these new insurance companies. But you have to know if theyll be around to honor your policy. Or will they be another fly by night company. There are websites that grade insurance companies. It would be a good idea to check them out. Then ask the agent themselves to see if it matches up.

Will This Company Be Around ?

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All of These Questions and More Are Important

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