car insurance changed

8/2/2019 Car Insurance Changed

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VIVEK COLLEGE OF COMMERCE

CAR INSURANCE Page 1

CHAPTER 1

INTRODUCTION TO INSURANCE

INTRODUCTION

Insurance is a financial topic of paramount importance for every individual.

Insurance is designed to protect the financial well-being of the company and their

dependents in the case of unexpected loss. Some forms of insurance are required

by law, while others are optional. Agreeing to the terms of an insurance policy

creates a contract between the company and the insurance company. In exchange

for payments from they (called premiums) the insurance company agrees to pay

they a sum of money upon the occurrence of a specific event. That event may be as

mundane as a visit to the doctor or as serious as a car crash, depending on the type

of insurance.

After contacting an insurance company about entering into a policy, they will

receive a quote, which is the total amount of money they will need to pay over the

term of the insurance policy in exchange for coverage. When they have agreed to

pay this amount and the insurance company has agreed to insure they, they will

receive a copy of the policy detailing the terms and conditions of their policy. If an

insured incident occurs, they will make a claim for payment from the insurance

company. They will receive the amount they are insured for in the case of the

specific incident minus a deductible that they must pay for each claim. Higher

deductibles are associated with lower premiums and vice versa. Therefore, for


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claims that are likely to be made, it may be in their best interest to pay a higher

premium in exchange for a lower deductible.

Given the importance of insurance, it is essential to make sure that their coverage

is sufficient. Investigate all potential insurance policies carefully in terms of their

own needs at the time of purchase and throughout the term of the policy.

MEANING OF INSURANCE

The meaning of insurance is important to understand for anybody that isconsidering buying an insurance policy or simply understanding the basics of

finance. Insurance is a hedging instrument used as a precautionary measure against

future contingent losses. This instrument is used for managing the possible risk of

the future. Insurance is bought in order to hedge the possible risks of the future

which may or may not take place. This is a mode of financially insuring that if

such a incident happens then the loss does not affect the present well-being of the

person or the property insured. Thus, through insurance, a person buys security and

protection. A simple example will make the meaning of insurance easy to

understand. A biker is always subjected to the risk of head injury. But it is not

certain that the accident causing him the head injury would definitely occur. Still,

people riding bikes cover their heads with helmets. This helmet in such cases acts

as insurance by protecting him/her from any possible danger. The price paid was

the possible inconvenience or act of wearing the helmet; this i.e. equivalent to the

insurance premiums paid.


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NEEDS OF INSURANCE

1. Insurance Benefits encompass the facilities associated with buying of

insurances.

2. Insurance is mainly a instrument used by consumers for hedging the future

contingent risks related with life, health and non-life general issues.

3. Insurance benefits help the policy holder or beneficiary in combating with

the losses or hazards associated with him/her.

4. The policy holder buys the insurance to hedge against the future perceivedlosses by paying a regular amount to he insurance company known as the

Premium.

5. Insurance companies ensure financial reimbursement of the insured losses to

the policy holders or his/her beneficiary . This is the most coveted Insurance

Benefits.

6. But with time, more and more insurance companies have cropped up and

consequently the competition among them has increased.

7. Every company is trying to woo all the customers into its fold and in a way

offering more and more innovative.


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Benefits of Insurance :-

To the consumers :-

Affordability of Insurance:- The foremost insurance benefit in todays

world is the low insurance rate and premium one has to pay. While choosing

a insurance policy, every customer looks at this rate first and then to the

other associated benefits. The lesser the insurance rate, the more affordable

the insurance becomes. Thus, among all the insurance benefits, low

insurance rate and premium is the most coveted one.

Accessibility Of Insurance:- The easy accessibility of a insurance is the

next most coveted Insurance Benefits that the customers look for. The online

access to insurance companies and their policies has made them more

lucrative to the customers. Now-a-days, customers can search, compare and

select their insurance coverage through the click of a mouse from their own

residence. This has been observed that through online services, the insurance

companies have been able to reach more number of customers and

consequently their customer base has also mopped up significantly.

Some others benefits are:-

o Basic benefits of the insurance policy :- The person enrolling for the

policy is entitled to receive the financial compensation in case of

actual occurrence of the loss/hazard/damage.o Optional Insurance Benefits:- These benefit are also given by the

companies to their policy holders in order to entice them to access

their insurance package. These optional benefits include


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Health and dental insurance of the family, life insurance of the

spouse and the child,

Accidental death policy for the policy holder in addition to the

actual insurance for which he/she has enrolled for,

Long term and short term insurance plans against disability of

the policy holder

Unit linked insurance schemes meant for appreciation of the

accumulated capital during the life span of the same, managed

by an experienced and well-learned fund manager

o Pre-tax insurance benefits:- These benefits are an added advantage

to the insurance holders because they help them in saving a large

portion of their tax payment. When the tax-payment gets curtailed

then consequently their disposable income increases leading to more

enjoyment out of a secured life.


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CHAPTER 2

Insurance Regulatory and Development Authority (IRDA)

The Insurance Regulatory and Development Authority (IRDA) is a national agency

of the Government of India, based in Hyderabad. It was formed by an act of Indian

Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate

some emerging requirements. Mission of IRDA as stated in the act is "to protect

the interests of the Policyholders, to regulate, promote and ensure orderly growth

of the Insurance industry and for matters connected therewith or incidental

thereto."

In 2010, the Government of India ruled that the Unit Linked Insurance

Plans (ULIPs) will be governed by IRDA, and not the market regulator Securities

and Exchange Board of India.

Duties, Powers and Functions of IRDASection 14 of IRDA Act, 1999 lays down the duties, powers and functions of

IRDA:

1. Subject to the provisions of this Act and any other law for the time being in

force, the Authority shall have the duty to regulate, promote and ensure

orderly growth of the insurance business and re-insurance business.

2. Without prejudice to the generality of the provisions contained in sub-

section , the powers and functions of the Authority shall include, issue to the

applicant a certificate of registration, renew, modify, withdraw, suspend or

cancel such registration;
http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Hyderabad_(India)http://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Policyholderhttp://en.wikipedia.org/wiki/Insurance_industryhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Unit_Linked_Insurance_Planhttp://en.wikipedia.org/wiki/Unit_Linked_Insurance_Planhttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Unit_Linked_Insurance_Planhttp://en.wikipedia.org/wiki/Unit_Linked_Insurance_Planhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Insurance_industryhttp://en.wikipedia.org/wiki/Policyholderhttp://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Hyderabad_(India)http://en.wikipedia.org/wiki/Government_of_India


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3. Protection of the interests of the policy holders in matters concerning

assigning of policy, nomination by policy holders, insurable interest,

settlement of Insurance claim , surrender value of policy and other terms

and conditions of contracts of insurance;

a. specifying requisite qualifications, code of conduct and practical

training for intermediary or insurance intermediaries and agents;

b. specifying the code of conduct for surveyors and loss assessors;

c. promoting efficiency in the conduct of insurance business;

d. promoting and regulating professional organizations connected with

the insurance and re-insurance business;

e. levying fees and other charges for carrying out the purposes of this

Act;

f. calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers,

intermediaries, insurance intermediaries and other organizationsconnected with the insurance business;

g. control and regulation of the rates, advantages, terms and conditions

that may be offered by insurers in respect of general insurance

business not so controlled and regulated by the Tariff Advisory

Committee under section 64U of the Insurance Act, 1938 (4 of 1938);

h.

specifying the form and manner in which books of account shall bemaintained and statement of accounts shall be rendered by insurers

and other insurance intermediaries;

i. regulating investment of funds by insurance companies;

j. regulating maintenance of margin of solvency;
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k. adjudication of disputes between insurers and intermediaries or

insurance intermediaries;

l. supervising the functioning of the Tariff Advisory Committee;

m. specifying the percentage of premium income of the insurer to

finance schemes for promoting and regulating professional

organizations referred to in clause (f);

n. specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or

social sector; and

o. exercising such other powers as may be prescribed from time to time,


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CHAPTER 3

MOTOR INSURANCE

Meaning

Motor Vehicle Insurance had its beginning in the United Kingdom. Motor

Insurance belongs to miscellaneous class of insurance. Motor Insurance got great

importance recently. Motor insurance accounts for a major portion of the

miscellaneous premium income of insurance companies. I the older times, personswho were injured or killed through the negligence of the Motorists could not get

any compensation from the Motorists. Because they did not have the financial

resources to pay the compensation. And also there were no insurance schemes

resent at that time. In order to safeguard the financial hardship caused to the

persons, the Motor Vehicles Act 1939 introduced Compulsory Motor Vehicle

Insurance.

The Motor Vehicles Act 1939 was amended in 1988.as per the provision of this

Act it was made compulsory for the motorists to insure against the risk of liability

to third parties. In other words the insurance of motor vehicles against risk is not

made compulsory, but the insurance of third party liability arising out of the use of

motor vehicles in public places is made compulsory.

The rate of premium under Motor Vehicle Insurance is standardized because the

business is tariff, no insurer can charge lower rates than the tariff rates and noinsurer can grant benefits exceeding than those prescribed by the tariff.


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Types of Motor Insurance:

The word Motor broadly covers a lot of classes of vehicles plying on the roads.

These may be two-wheelers like scooters and motorbikes, three-wheelers or four

wheelers like private cars, jeeps, buses, trucks, commercial taxis and other

vehicles.

Car Insurance

This is the fastest growing segment in the insurance sector as car insurance ismandatory while buying a new car. Major car manufacturers are tying up with

leading insurance companies to provide quick insurance to its customers. Car

insurance covers loss or damage by accident, fire, lightning, riots, earth quake,

hurricane, terrorist attacks, explosion, theft, third partys claims and damages (like

liability for third party injury or death, third party property and liability to paid

driver). On payment of appropriate additional premium it covers loss or damage to

electrical or electronic accessories and other significant items.

Car insurance (also known as auto or motor insurance) is done to protect share

holder vehicle from unforeseen risks. It basically provides protection against the

losses incurred as a result of unavoidable instances. It helps cover against theft,

financial loss caused by accidents and any subsequent liabilities. The cover level of

Car insurance can be the insured party, the insured vehicle and third parties (carand people). The premium of the insurance is dependent on certain parameters like

value of the car, type of coverage, vehicle classification; voluntary excess etc
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All the states in India require a minimum amount of insurance. Car insurance can

help offset the loss of huge sum in the following manner:

Provides benefits to survivors when an accident results in death. It covers lawsuits, including legal fees brought against share holder as

the result of an accident.

Covers the bills of vehicle repairs due to damage caused in an

accident.

Covers damage caused by other than an accident for example, theft,fire, etc.

Additional discounts: Car insurance policies allow premium

discounts for theft or for owning more than one policy with the same

insurer. It also provides added advantage to extend coverage to others

driving share holder car with share holder permission.

No Claim Bonus: If share holder do not make a claim during the

policy period, a No Claim Bonus is offered on renewals provided

share holder fulfill certain terms and condition

CAR INSURANCE GLOSSARY

Like all other industries, insurance industry also use specific terms that is oftendifficult for a layman to understand the meaning. In the following we have tried to

simplify the terms as much as possible.


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Representative

An insurance sales person; Independent representative who works for or on behalf of an insurance company; Broker is an insurance sales person who deals with

agents and companies to find the right insurance policy for the customer.

Claim - An insurance owner requests the insurer to pay the loss covered under a

policy. Share holder claims to share holder company are "first-party claims. When

a person claims against the other person's insurance company it is called "third-

party claims."

Collision Coverage

Optional insurance covers the damage to share holder car caused by collision with

another car or object. Is frequently required if share holder have a car loan.

Comprehensive physical damage coverage

Optional insurance covering damage to share holder car caused by something other

than a collision or the car rolling over, such as fire, theft, vandalism, flood or hail.

Is frequently required if share holder have a car loan.

Conditions

These are part of an insurance policy that states the obligations of the insuranceowner and those of the insurance company in order for the policy to be in effect.


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Insured Declared Value (IDV)

The premium is calculated on the basis of the IDV of the vehicle, which isbasically the depreciated value of the vehicle agreed upon by the insurer and the

policyholder. The IDV of a vehicle reduces with age.

Liability coverage

Offers share holder and any other party involved in an accident a significant sum

to cover mainly the medical expenses. Normally these figures are divided into

three parts, first one represents the maximum share holder insurance will pay an

individual, second represents a cover to all individuals and third one covers

damage to another car or property at the time of collision.

No Claim Bonus (NCB)

If share holder does not make a claim during the policy period, a No Claim Bonus

is offered on renewals. Insurers reward policyholders by giving them substantial

discounts on the Own Damage Premium. However the NCB is applicable only if

the policy is renewed within 90 days of the expiry date of the previous policy.

Own Damage Premium (OD)

Payment of OD premium entitles share holder to claim compensation in case of

theft or damage of share holder vehicle due to fire, earthquake, etc.

Personal Accident Cover

It covers share holder not only against Accidental Death and Permanent Total

Disablement (PTD), but also against terrorism and acts of terrorism.


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Policy Period -It is the period when the policy is in force.

Policy Holder Owner of the policy.

Premium - The amount a policy holder agrees to pay the insurer for covering the

risk.

Proof of loss

Documents share holder provide to the insurer to support share holder request for

payment of losses. The company uses these documents to determine whether and

how much it will pay. For example written repair estimates from auto body shops,

police reports, etc.

Uninsured motorist coverage Uninsured motorist coverage can pay for the

injuries caused to share holder and damage to share holder.

Tips for buying car Insurance

Motor Insurance can be confusing for many people as there is plethora of Motor

policies and is an arduous task to choose a Motor policy which share holder should

really carry to protect share holder self compared to various coverages available.

1. Depending on the vehicle share holder have

2. Claim settlement

3. Customer service


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4. Discount & Deductable %

5. IDV (Insured Declared value)

Two Wheelers Insurance

Two wheeler insurance is another type of popular auto insurance in India. It is

governed by the Indian Motor Tariff. This insurance provides protection against

natural and man made calamities like: fire, rockslide, landslide, storm, hurricane,

flood, earthquake, burglary, theft, riots or any damage caused to the vehicle in

transit by road, air, inland waterway or rail. Two wheeler insurance providesmandatory personal accident cover of Rs. 1 lakh to the insurer. This accident cover

can also be opted for passengers. It also protects against legal liabilities arising due

to third parties injury/death or damage caused to its property there are two types of

motor insurance

1. Third Party Insurance

This insurance is mandatory by law. It protects a policy holder against losses

which arise due to bodily injury/death to a third party or any damage to

property. Here third party includes people travelling with share holder or

whom the insured person injures and claims damages at the time of accident.

But this insurance does not protect share holder, share holder vehicle and co-

passengers against losses which arise due to bodily injury/death.


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2. Comprehensive Insurance

In addition to third party coverage, this policy covers share holder, share

holder car and co-passengers against damages /losses arising from

unforeseen calamities, hence it is prudent to purchase this policy.

Commercial Vehicle Insurance

This type of insurance covers all those vehicles which are not used for personal

purpose. Trucks, buses, heavy commercial vehicles, light commercial vehicles,

multi utility vehicles, agricultural vehicles, ambulances etc are covered under this

insurance. The premium is calculated on the basis of the make and model of the

commercial vehicle, place of registration, year of manufacture, current showroom

price and whether the insurer is individual or corporate. Insurance Companies in

collaboration with the automobile manufacturing companies chalk out different

kind of easy and less complicated plans for safe and easy insurance policy.

Benefits of Car Insurance

All the states in India require a minimum amount of insurance. Car insurance can

help offset the loss of huge sum in the following manner:

Provides benefits to survivors when an accident results in death. It covers lawsuits, including legal fees brought against share holder as

the result of an accident.

Covers the bills of vehicle repairs due to damage caused in an

accident.


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Covers damage caused by other than an accident for example, theft,

fire, etc.

Additional discounts: Car insurance policies allow premium

discounts for theft or for owning more than one policy with the same

insurer. It also provides added advantage to extend coverage to others

driving share holder car with share holder permission.

No Claim Bonus: If share holder do not make a claim during the

policy period, a No Claim Bonus is offered on renewals provided

share holder fulfill certain terms and conditions

Classification of Motor Vehicles

For purpose of insurance, Motor Vehicles are classified into three board

categories-

(a) Private Cars (not used for commercial purposes)

(b) Motor Cycles and Motor Scooters

(c) Commercial Vehicles.

Commercial Vehicles can further be classified into-

(1) Goods Carrying Vehicles

(2) Passenger Carrying Vehicles (e.g.) (motorised rickshaws, taxis, buses

etc)

(3) Miscellaneous Vehicles (e.g.) (hearses, ambulances, cinema film

recording and publicity vans, mobile dispensaries etc.)


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Kinds of policies

To cover the losses arising in respect of car vehicles, the following various kinds of

policies are granted under car vehicle insurance

1) Act liability: this policy is designed to meet the requirements of motor

vehicle act 1988, which provides for compulsory insurance in regard to

liabilities arising out of the use of motor vehicle in a public place this policy is

also called as form A policy. This policy applies uniformly to all classes of

vehicles, whether private cars, commercial vehicles, motor cycles or motor

scooters.

2) Third party policy:

This policy under takes the liabilities of the third parties who suffered loss in

connection with the damage of property and personal injury or death

This policy may be extended to include

a. Fire

b. Theft risk

c. Legal liability to persons employed in connection with the operation and or

maintenance and or loading or unloading of car vehicle

The private car policy extend to indemnify the insured against legal liabilities

incurred by him subject to limitations of indemnity while personally driving a

private motor car


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3) Comprehensive policy:

This policy covers own damage, losses and act liability. The policy may extend

to cover additional liabilities as provided in the tariff. This policy is called as

Form B policy. This policy has 3 sections, they are:

(1) First Section covering damage to the vehicles

(2) Second Section covering the insured liability to third parties

(3) Third Section which differs according to the class of the vehicles.

The comprehensive policy covers the following risks:

(a) Loss or damage (Own damage)

(b) Third party liabilities

(c) Repair charges, medical expenses

(d) Remover charges of repairer (e) Damage to car parts or body.

(f)

4) Garage Insurance Policy:

Under this policy, such motor vehicles risks are covered which are related to

the motor vehicles standing in the motor garages or service stations. As such,

all the risks which can affect the vehicles kept in the garage or at servicestations and any loss caused to the motor vehicle is agreed to the indemnified

by the insurance company.


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5) Collision Insurance Policy:

This policy is designed to meet the losses caused due to any collision or

accident between two or more vehicles indemnified by the insurance

company.


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CHAPTER 3

PROCEDURE FOR CAR INSURANCE

The following are the procedure for taking car insurance, they are as follows

1. Proposal FormsIn Motor Insurance Contract the Proposal Form is used, as a rule they

constitute the means of communicating the offer to the insurers or for

making proposal for motor insurance. It is also customary to indicate on the

form a brief statement of the cover which is provided by the appropriate

policy, or the terms and conditions which relates to motor insurance of:

a) Identification of Vehicles (register number, horse power, shape, size

etc.)

b) Risk identification

c) Declaration etc.

2. Rating of Insurance

After selecting an appropriate policy, the proposal form elicits all

information necessary to determine the amount of premium and

underwriting. Some examples of rating are given below:

(a) Private Cars: Rates are determined on the basis of the cubic capacity(Power of the engine) as given by manufacturer, Insured Estimated value

and the Zone of operation.


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(b) Goods Carrying Vehicles: the rate or amount of premium is determined

on the basis of gross vehicle weight i.e., the total weight of the vehicle

and load certified by the registering authority

3. Tariff Rules

Some important tariff rules prescribed by the tariff are as follows:

(1) Agreed value policies are not allowed except for vintage cars.

(2) Policies have to be issued in the name of the registered owner only.

(3) The prescribed cover note should be used when full details are not

available. The cover note incorporate certificate if insurance.(4) The tariff prescribes the procedure for issue of a duplicate certificate when

the original is lost, torn, defaced etc.

(5) The Tariff provides concessions e.g. return of premium, restricted cover

etc. When the vehicle is laid up in a garage and not in use for a period of

two consecutive years or more.

4. Policy Form

As soon as the proposal form is accepted Cover Note is issued Policy forms,

like proposal forms, vary within wide limits as between the different classes

of insurance, but they have certain features in common. The policy is not the

contract itself, but the evidence of the contract. As soon as the policy is

issued, the cover note is cancelled.

5. Term of Insurance

The Motor Insurance Policy is issued generally for one year. However, the

policy can be issued for less than one year but the premium rate will be


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higher e.g. the premium rate is three fourths of annual premium of the policy

issued for six months.

6. Extra Benefits

During the currency of policy, after payment of extra premium, additional

benefits can be added to the original policy. Thus, additional risks can be

included to the original policy.

7. Change of VehicleThe insured vehicles can be disposed of along with policy. The term of

policy will remain the same. The policy will continue up to the unexpired

period with the purchaser of the car. Similarly, the insured can replace

another car under the same policy.


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CHAPTER 4

SETTLEMENT OF CLAIMS UNDER

CAR INSURANCE

For settlement of insurance claim under car Insurance, the following claims usually

occur in the following ways:

(a) Claims for own damage

(b) Claims for theft

(c) Claims for third party.

1. Claims for Own Damage

On receipt of notice of loss, the policy records are checked to see that the policy is

in force and that it covers the vehicle involved. The loss is entered in the claim

register and a claim form is issued to the insured for completion and return. The

insured is also requested to submit a detailed estimate of repair charges.

Assessment or Survey Report:

Independent Automobile Surveyors are assigned the task of assessing the cause

and extent of loss. They inspect the damaged vehicle, and submit their survey

report along with the copy of the policy, Claim form and estimate cost of repairs.


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Claim Documents:

Apart from claim form and survey report the other documents required for

processing the claim are:

(1) Driving Licence

(2) Registration Certificate Book

(3) Fitness Certificate

(4) Permit

(5) Police Report

(6) Financial Bill from repairs(7) Satisfaction Note from the insured

(8) Receipted Bill from the repair if paid by insured.

Settlement of Claim: On the basis of survey report and claim documents the

insurance company determines the extent of its liability and the loss is indemnified.

The usual practice in the case of damage of motor vehicle, the insurance company

may get the vehicle repaired instead of making cash payment to the insured.

2. Claims for Theft or Total Loss Claims

Total Losses can also arise due to the theft of the vehicle and its remaining

untraced by the policy authorities till the end. These losses will have to be

supported by a copy of the First Information Report lodged with police

authorities immediately after the theft has been detected. If the policeauthorities do not succeeded in recovering the vehicle for theft claims, the

insurer is requested to submit the certificates of SIDE No. or CR No.,


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certification of true and undetected, R.C. Books and Taxation certification

by vehicle etc. Along with documents related to vehicles and insurers. On

the basis of investigation or inspection with valid documents the insurancecompany determines the total loss or theft is indemnified.

3. Claims for Third Party

Section 165 of the Motor Vehicle Act 1988 empowers the State Government

to set up Motor Accident Claims Tribunals, for adjusting upon third party

claims.On the receipt of notice of claim from the insured, or the third party or

from the Motor Accident Claims Tribunals, the matter is entrusted to an

advocate. The insured is requested to submit full information relating to

accident along with the following documents:

(1) Driving Licence

(2) Police Report

(3) Details of drivers pro secution

(4) Death Certificate

(5) Coroners Report

(6) Medical Certificate

(7) Details of age, income, no. of dependents etc.

On the basis of the written statements the matter is then filed with Motor

Accident Claims Tribunals by the Advocate, the MACT determines the

amount of claims to the third party.


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Car Insurance Cover

Car insurance or Motor Insurance is mandatory by law. It is a legal requirement to

have a minimal level of insurance before driving a car in India. Coverage would

differ by product; however following is a list of possible coverages:

1. Bodily injury liability- It covers bodily injury claims of people who get injured

in an accident.

2. Property damage liability- It covers property damages to third partiessuch asanother person's car.

3. Medical payments- This payment is done to the policy owner and other

pas sengers in the policy owners car.

4. Uninsured and underinsured motorist coverage. This coverage protects share

holder when the negligent driver has no insurance or insufficient insurance. Inmost states, this covers only bodily injury losses, though some states do include

property damage losses.

5. Physical damage covers damage to share holder car in the following instances:

a. Covers losses to share holder car involved in a collision.

b. Covers non-collision physical damage if share holder car is damaged in storm

or windshield breaks etc.

Car insurance is packaged into different coverage types and is broadly divided into

two as discussed below:


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1. Comprehensive car insurance policy

It protects against any loss or damage caused to the vehicle and its insured

accessories as a result of natural and man-made calamities. These calamities

can be broadly classified as Natural Calamities and Man Made

Calamities. Natural calamities include: fire, explosion, lightning, flood,

typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost,

landslide, rockslide, fire and shock damage due to earthquake. Man-made

calamities include: burglary, housebreaking, theft, riot or strike, accident byexternal means, malicious act, terrorist activity and damage during travel by

road, rail, inland-waterway, or air. This policy also includes personal

accident cover, which provides accident cover for the driver of the vehicle

while driving. The owner can avail personal accident cover for passengers in

the vehicle. Another mandatory feature is the third party legal liability cover.

It protects the owner against legal liability arising from an accident causing

any permanent injury or death as well as any damage to the property. It also

covers for fire and theft provided the vehicles are laid up in a garage and not

in active use.

2. Third Party car insurance policy -

An insurance policy is between two parties, the insurer and the insured.

Therefore, a third party is any person who is neither the insured nor the

insurer. Third parties are mainly pedestrians, fare-paying and non fare

paying passengers in a vehicle. People in the vehicles like the driver, owner

or passengers are also third parties. Fare paying passengers are the people


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who travel in public transport such as taxis, auto rickshaws and buses. Non-

Fare Paying Passengers are the people who are allowed to travel in a vehicle

for free. The Third Party car insurance policy covers share holder legal

liability for any compensation to be paid arising from accident caused by

share holder vehicle. It includes liability for death or injury to third parties

like pedestrians, occupant of other vehicles, and outsiders other than

passengers. Passengers of private vehicles and pillion riders are also

considered to be covered. As an owner of the vehicle share holder are

insured against death or injury caused to passengers carried in the vehicle for

hire. The liability covered is unlimited in case of death or injury. Damage to

third partys property is usually covered by the insurance policy.


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CAR INSURANCE CLAIM PROCESS

In case of car insurance claim, share holder can avail cashless facility for the

repair of share holder vehicle in any of our cashless garage network. However, If

the vehicle is serviced in a garage outside the purview of our network, then share

holder can claim reimbursement for the same.


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In Case of an Accident

Note the number of the other vehicle involved in the accident, if any.

Note down the names and contact details of witnesses, if any.

Contact our toll free number 1-800-209-8888 and get share holder claim

number / reference number.

The Call Centre Representative will provide share holder with the details of

the documents required for claim processing and also details of our preferred

cashless garage.

File an FIR at the nearest police station in case of property damage, bodily

injury, theft and major damages.

After Registering the Claim

Our Customer Service Manager (CSM) will contact share holder within 24

hours of registering the claim. Submit all the required documents to the dealer / CSM and get them verified

with the originals.

Our CSM will get the estimate for the repairs of share holder vehicle and

give spot approval after assessment.

Payments that need to borne by us at our preferred garage will be made

directly to the garage on completion of the repairs. The balance amount will have to be paid by the insured as per the terms and

conditions of the policy, which will be informed by the CSM.


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Documents Required

For Accident Claims

Claim form duly signed*

RC copy of the vehicle

Driving License copy

Policy copy (First two pages)

FIR on a case-to-case basis Original Estimate

Original Repair Invoice and Payment Receipt (for cashless garage, only

repair invoice)

For Theft Claims


RC copy of the vehicle with all original keys


Policy copy

Original FIR copy

RTO Transfer Papers duly signed along with Form 28, 29, 30 and Form 35

(if hypothecated)

Final report A no trace report from the police saying that the vehicle

cannot be located.
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For Third Party Claims


Police FIR copy


Policy copy

RC copy of the vehicle
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CHAPTER 5

CAR INSURANCE ONLINE POLICY

Features and Benefits of Automobile Insurance Online Policy India

Car Insurance Online/Auto Insurance governed by the India Motor Tariff Act. The

key features are:

o Protection from loss of car or damage to share holder car with Auto Car

Insurance plan

o Indemnity for third party property damage up to a limit of Rs. 7.5 lakhs

Speedy authorisation of repairs to get share holder car back on the road

o Personal Accident Cover for share holder, share holder paid driver and the

occupants in the car

Customer Helpline to give share holder support and guidance when share

holder need it

Efficient and worry free claims service to give share holder peace of mind

only with Auto Car Insurance plan from Royal Sundaram

o First Information Report is not required (Unless legally mandatory)


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Extra Benefits of Car Insurance Policy Online

- Special Model Wise Discounts on Own Damage Premium for share holder car

only with Auto Car Insurance plan

- Discount in premium up to 5% on the Own Damage Premium (or) Max of

Rs.200/

- for a valid Member of Automobile Association of India

- Discount in premium up to 2.5% on the Own Damage Premium (or) Max of Rs.

500/- on Installation of Anti-Theft Device in share holder car

- Discount of Rs. 100/- in Third Party Basic Premium on reduction in Limits of

Liability for Third Party Property Damage with Auto Car Insurance plan

- Discount of 35% on Own Damage Premium subject to a maximum of Rs. 2,500/-

on opting maximum voluntary deductible of Rs. 15,000/-

- Transfer of No Claim Bonus (NCB) from other insurance company on renewal

with Royal Sundarams Car Insurance Policy Online


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Car Insurance Online Policy Coverages

a) Loss or damage to share holder car: This Auto Car Insurance policycover share holder against any loss or damage caused to the vehicle

due to the following natural and man made calamities

What is covered in Auto Car Insurance

Policy

What is not covered in Auto Car Insurance

Policy

- Accidental & External Damage - Wear and tear, Depreciation or any consequential

loss

- Fire & Explosion - Mechanical/ electrical breakdown

- Riot & Strike - Damage caused by a person driving the car

without a valid license

- Malicious Act - Damage caused by a person driving the car under

the influence of alcohol or drugs

- Burglary, housebreaking/ Theft - Other exclusions as per the policy terms and

conditions

- Landslide

- Transit

- Earthquake- Storm and Flood

- Terrorism


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b) Liability to Third Parties (Additional Auto Insurance Policy Covers)

What is covered in Auto Car Insurance

Policy

What is not covered in Auto Car Insurance

Policy

- Legal protection for death or injury

claims

from third parties

- Damage to share holder personal

property

- Legal protection for damage to third party

property

- Costs and expenses incurred

without our prior written

consent

- Legal costs and expenses - Other exclusions as per the

policy terms and conditions

C) Personal Accident Cover to Owner/ Driver: This insurance policy

provides compulsory Personal Accident Cover to the owner/ driver whilst

driving the vehicle including mounting into/ dismounting from or traveling in

the insured vehicle as a co driver for Rs. 2 lakhs.


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Extra Covers offered under Car Insurance Online Policy

- Personal Accident Cover to Unnamed Passengers and paid driver for a maximum

of Rs. 2 lakhs per person

- Personal Accident Benefits for share holder, share holder paid driver and

occupants of share holder car

- Legal liability to paid driver employed in connection with the operation of insured private car

- Legal Liability to the Employees of the Insured other than paid driver who may

be driving or travelling in the car

- Comprehensive cover for Electrical/ Electronic/ Non-Electrical Fittings in the car

- Cover for CNG Kit and Bi-Fuel System which are endorsed in the RC book

Damage to share holder car

This Car Auto Insurance Policy provides protection for share holder car from loss

or damage caused by misfortunes such as impact, fire, theft, riot, strike, storm,

flood, landslide, malicious act and earthquake.

Legal Liability to Third Parties

This policy provides for the customers legal protection against death or injury

claims from third parties and for damage to third party property up to the limit of


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Rs. 7.5lakhs. Car Insurance Online also includes cover for share holder legal costs

and expenses agreed by Royal Sundaram.

Personal Accident

Under this Online Car Auto Insurance we provide the Owner Driver a Capital Sum

Insured of Rs. 2 lakhs for death or permanent total disability. We also provide an

option to insure other named and unnamed occupants of the car for Personal

Accident benefits for death and serious injuries.

Wider Legal Liability for share holder Paid Driver

Auto Insurance/Car Insurance Online also gives share holder the option to provide

for a wider cover of share holder legal liability to share holder Paid Driver, over

and above what is offered as per the Workmens Compensation Act.

Deductible

Car Auto Insurance Online includes a deductible of Rs.500 for cars not exceeding

1,500cc and Rs.1,000 for cars exceeding 1,500cc. This means that share holder pay

the first amount of each claim for loss or damage to share holder car. This policy

gives share holder the opportunity to get a discount on the premium if share holder

choose to increase this deductible. The discount is allowed from the Loss or

Damage Section premium.


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CONCLUSION

Car insurance gives confidence to drive peacefully. In emergencies it acts like a

boon to the insurance holder. With so many car insurance companies vying for

customer base in the market, it is quite difficult to make a decision like choosing

the right policy and insurer. Figuring out the right insurance policy, fulfilling the

requirement and being cost effective can be time consuming. Many a times car

insurance may seem complex but having it saves share holder spending a fortune

later. At policy bazaar share holder can compare car insurance quotes online and

save up to 40% on share holder premium. Motor insurance protects share holder

vehicle against losses arising from unforeseen risks. It basically covers financial

losses arising from accidents, theft and other natural calamities. Motor insurance is

a contract for an automobile in which the insurance company agrees to pay for

share holder financial loss resulting from a said specified event.
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