Motor Insurance Policy

Motor Insurance Policy is a policy that offers protection to the vehicle owner against:

  • Financial losses that may happen because of accidents or any kind of physical damage to the vehicle
  • Theft of the vehicle
  • Third-party legal liability for bodily injuries and/or property damage. The policy also provides for personal accident cover for the owner/driver/occupants of the vehicle.

Statutory Requirement

As per Motor Vehicle Act 1988, no vehicle should ply in a public place or any other place without a valid certificate of insurance issued by an insurance company. While Third Party insurance in India is compulsory as per MV Act , the own damage insurance is voluntary.

There are 2 Types of Motor Insurance Policies

Package Policy or Comprehensive Policy: Covers damage suffered by the vehicle + Third party legal liability for personal injury, death, property and damage.

Third Party Liability alone: Covers only legal liability as per Motor Vehicle Act 1988 for personal injury, death, and property damage.

Types of Vehicles

  • Private Cars
  • Two-Wheeler – Motor Cycles and Scooters
  • Commercial Passenger Carrying Vehicle
  • Commercial Goods Carrying Vehicle
  • Miscellaneous Vehicles – Agricultural Tractors, Dumpers, Cranes, Ambulances etc

What’s covered

The Motor Vehicle Insurance Policy on the Own Damage section covers loss or damage suffered by the vehicle on account of the following perils:

  • Accidental external means
  • Natural disasters like earthquakes, landslides, cyclones, flood , inundation, rockslide etc.
  • Riots and strikes
  • Fire, Self-ignition, Explosion
  • Acts of Burglary, House breaking, theft
  • Acts of Terrorism
  • Malicious Act

What’s not covered

The insurance policy does not cover loss or damage owing to:

  • Driver was under the influence of drugs or other prohibited substances or abuse at the time of accident.
  • Vehicle – car or two-wheeler or commercial vehicle – is used for illegal activities or for any other purpose other than what is stated in the policy.
  • Loss or damage occurring outside the geographical limit.
  • Loss or damage arising out of nuclear weapons, radioactive materials, nuclear waste etc.
  • Diver not in possession of a valid driving license at the time of accident.
  • Loss or damage, if any, to the insured vehicle, that occurs outside India.
  • Vehicle used for illegal activity prohibited by the law of the land