Third party risk and Motor accident insurance policy
The Indian law requires you to get insurance when you get a vehicle. This is in Chapter 11 of The Motor Vehicles Act 1988 (the Act). It is a basic insurance policy which protects you and others in the event of an accident. The law requires you to get an insurance policy which will protect you and others involved against death/bodily injury and/or third party’s property being damaged. This basic cover compensates just Rs.6000 when it comes to third party’s property being damaged.
Penal liability In Car Insurance
It is a penal offence (Sec.196) to drive/cause/allow to the driving of an uninsured vehicle. Breaking this law, according to the Motor Accident Claims Tribunal (the MACT) can mean imprisonment for three months as well as a motor accident claims. The consequences can be more than the above mentioned, depending on the facts and circumstances of the accident. Additional to the compensation that the owner/driver will have to pay to the injured third party, they could also be liable for criminal prosecution under the Act and others (eg. the Indian Penal Code (IPC) 1860). Such a prosecution could lead to extended imprisonment and/or fines.
Statutory Obligations of The Insurance Company Towards Third Party, on Behalf of The Insured
The insurer has an obligation towards the third party (Sec.149) to satisfy verdicts (according to what the MACT has judged). Apart from that, they must issue a certificate of insurance in favour of the insured. The only exception is discussed below. According to Sec.149(2)(b) discusses this exception where the Insurer does not have to pay the third party/parties. This exception is only possible if there is proof that is gathered by the insured through non-disclosure of material fact or representation of fact false in material particular. This includes particulars and facts that would influence the judgment of an insurer in deciding whether to assume the risk and on what conditions.
Limited Statutory Defenses
Some of the ground rules according to (sec.149(2)(a) of the Act) in order to do away with strict obligations are:
- Hiring and use of the vehicle and reward while the permit does not cover it, and also conflicting to such stated policy situation.
- If the vehicle is not used for the purpose that is against the policy condition.
- If the driver of the vehicle does not have a license or was disqualified from having one etc.
- All You Need To Know Before Insuring Your Car In India
- Looking To Switch Insurance Companies? Read This
- Keep These Points In Mind Before Renewing Your Auto Insurance Policy
- Why Your Car Insurance Claim Was Denied
- Consumables Cover In Car Insurance - Coverage And Claim Process
- The Engine Protect Add-on Cover In Car Insurance Demystified
- Incorporate Changes In Your Car Insurance Policy Through Endorsements
- Why Should You Insure Your Car?
- Saving Money On Car Insurance Is This Easy
- When Should You Get Your Car Inspected?
- How Engine Capacity Of Your Car Is Important In Determining Its Insurance Rate
- When Should You Not Claim Under Your Car Insurance?
- Online Or Offline Purchase Of Motor Insurance - Which One Would You Choose?
- How To Detect Fraudulent Car Insurance Policies
- All You Need To Know While Insuring Your CNG Vehicle
- Points To Note Before Cancelling Your Car Insurance
- What You Should Know About IDV In Car Insurance
- How Insurers Calculate Premiums In India
- Get Adequate Protection Through Car Insurance Add-on Covers
- Bajaj Allianz Car Insurance Customer Care
- Bharti Axa Car Insurance Customer Care
- Chola Ms Car Insurance Customer Care
- Future Generali Car Insurance Customer Care
- HDFC ERGO Car Insurance Customer Care
- IFFCO Tokio Car Insurance Customer Care
- Liberty Videocon Car Insurance Customer Care
- Magma Hdi Car Insurance Customer Care
- National Car Insurance Customer Care
- New India Car Insurance Customer Care
- Oriental Car Insurance Customer Care
- Reliance Car Insurance Customer Care
- Royal Sundaram Car Insurance Customer Care
- SBI Car Insurance Customer Care
- Tata AIG Car Insurance Customer Care
- United India Car Insurance Customer Care
- Universal Sompo Car Insurance Customer Care
GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017