Motor Insurance is a contract of indemnity between a owner of the vehicle and an insurance company in which insurer will give a financial protection to the owner of the vehicle against losses due to insured vehicle is stolen or damaged. Two Commonly used motor policy type:
- Comprehensive cover (including third party liability and own damage)
- Third Party Liability only cover
A motor insurance policy is a mandatory policy (Third Party Insurance) under Indian Motor Vehicle Act 1988 in India to drive a vehicle on road which is issued by an insurance company as part of prevention of public liability to protect the public from any accidental financial loss. It covers following risks:
- Damage caused by accidental external means
- Fire, explosion, self-ignition or lightning
- Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone, Hailstorm
- Burglary, housebreaking or theft
- Earthquake, Landslide, Rockslide
- Riot and strike, Malicious Act , Terrorist Activity
- Whilst in transit by Road, Rail, Air, inland waterway, lift, elevator
- Third party legal liability (bodily injuries or property damage to a third party).
- Personal Accident Cover for an owner driver in case of death.
- Personal Accident Cover for a paid driver in case of death.
- Personal Accident Cover for passenger of the same vehicle in case of death.
The Insured's Declared Value (IDV) of the vehicle will be deemed to be the "SUM INSURED‟ for the purpose of insurance and it will be fixed at the commencement of each policy period for each insured vehicle. The IDV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation.
No Claim Bonus(NCB) can be earned only in the Own Damage section of Policies covering all classes of vehicles, An insured becomes entitled to NCB only at the renewal of a policy after the expiry of the full duration of 12 months. Valid for 90 days with same owner and Valid for 3 years if the vehicle is sold & a new vehicle is bought within 3 years.
There is No Tax benefit available on motor insurancce.
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