Kinds of Insurance Under Motor Vehicle Act, 1988
Before the enforcement of insurance policy under Motor Vehicle Act, 1988 many of us were smashed by motor vehicles and did not get reimbursement because motorist did not not have resources for the fulfillment of damages and none of them were insured . After the analysis of risk of and to protect the strollers the Compulsory insurance policy was introduced under Motor vehicle Act .
About the Motor Vehicle Act ,1988
- The Motor Vehicle Act,1988 came into force from 1 July, 1988.
- It replaced Motor Vehicle Act, 1939 which earlier replaced the first such enactment Motor Vehicle Act, 1914.
- The act is amended by the Motor Vehicles (Amendment)act,2019.
- The Act provides in detail the legislative provisions regarding licensing of drivers/conductors, registration of motor vehicles, control of motor vehicles through permits, special provisions relating to State transport undertakings, traffic regulation, insurance, liability , offenses and penalties ,etc. For exercising the legislative provisions of the act, the Government of India made the central Motor Vehicle Rules 1989.
Definition –
Motor Vehicle Insurance:- Motor vehicle insurance, is a contract of insurance under which the insurer indemnifies the insured who is the owner or an operator of a motor vehicle, against any loss that he may incur due to damage to the property (motor vehicle) or any other person ( third party as a result of an accident).
Objective of Motor Vehicle Insurance
- Just like the other the other policies Motor Vehicle insurance is also same thing .
- But it is mandatory by Government of India .
- Your safety and others safety .
Insurance can be divided into two parts:-
1. First party insurance
2. Second party insurance
As the name suggests, first party insurance provides coverage to the parties insured according to contract by providing them with the assured amount on the happening of the event.
It mainly includes –
- Private car insurance
- Commercial car insurance
A private car insurance is bought by personal car owners using their car for personal there are different types of policies which a car owner can choose.
A commercial car insurance is to be bought by people who own taxis or use their car for commercial purposes.
Third party insurance for motor vehicle is a statutory requirement and benefit the liability of the insured towards the death or disability of third-party. This is to ensure that the insurer is paid his damages irrespective of the solvency capacity of the driver. In this insurance contract the insured is said to be the first party while the second party is the insurance company. Finally the person who claims damages from you is the third party of the contract.
Main provisions of Motor Vehicle Insurance
- Chapter XI of the Motor Vehicle Act,188 Section 146 States the necessity for insurance against third party risk.
- Section 147 deals with the requirements of policies and limits of liability .
- Section 165 of claim tribunals are critical units for Motor Vehicle Act of 1988 in terms of Vehicle insurance norms in India .
- Motor Vehicle Act, 1988 provides for mandatory insurance against third party risk under section 146.
Compulsory Insurance is Third Party Insurance under Motor Vehicle Act, 1988
Third -Party insurance , which is also sometimes referred as ‘act-only’ insurance is a legal requirement for all vehicle owner as per the Motor Vehicle Act. It is a type of insurance cover where the insurer offers protection against damage to the third -Party Vehicle , personal property and physical injury. The policy does not provide any coverage to the insurer .
Importance of Third- Party Insurance
- Third party insurance is a mandatory requirement by law. So, having third party cover allows the policyholder to comply with the legal obligation .
- Although it is a basic coverage option ,it gives the policyholder peace of mind knowing that they have sufficient financial protection against the damage they may cause to other people in an accident.
- Third party motor insurance secure the policyholders finance against accidental risk.
Also it is important to gather information guarding the accident and provided to the insurance with the following details:-
- Description of an accident along with date and time.
- Details of insurance and policy holders present during the accident.
- Describe injuries sustained by driver, passengers and or to the property or vehicle damaged.
- Details of witnesses.
- Weather and visibility condition at the time of the accident
- Photographs of evidence collected from the accident site.
The process to claim third party Insurance:-
To get reimbursement from the insurance company, the policyholder must comply with the claim rules. The process to claim third party Insurance involves the following steps-
- First and foremost the insurance holder must inform the insurance company about the accident within stipulated time as mentioned in the policy document.
- The policyholder must file and FIR and the nearest police station from the spot of the accident and get a copy of the same.
- File for a claim with the lender- fill the form company with necessary documents requirement.
- Following the claim filed the insurance will send the surveyor the damage and verify the estimated cost. Post assessment, the surveyor file surveyor files a report .
- Based on the report, the insurer settles the claim.
Conclusion
Owning a vehicle is no longer a luxury, what is more of a necessity. A vehicle in hands as your mobile ATI and reduces the need to depend on public transportation. However, driving on Indian road comes with its own set of perils. Lack of discipline while driving and bad condition of the roads of an increases the risk of an accident. Such unfortunate event may result in damage to your vehicle and may also cause bodily injuries as well as death.
According to a road accident published by the transport research sector under the ministry of road transport and highways and average of 413 people died on a daily basis as result of 1,317 road accidents every day .
So everyone should get insured themselves under Motor Vehicle Act , 1988 to safeguard them and to get necessary aid , repayment and in order to financially protect themselves after any kind of mishappenings.
Author: Kajal Bind,
Prayag Vidhi Mahavidyalaya (Allahabad State University ) /2nd year
