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KNOW ABOUT YOUR MOTOR INSURANCE POLICY

( Caution: Policy, Terms, Conditions, Rates, Procedures, Practice differ from Company to Company- Kindly verify the same with your Insurance Company. Contents  over here is only Indicative / Suggestive. Most details can be found in India Motor Tariff in this URL      http://iib.gov.in/IRDA/tac/tariffs/newmotor.pdf )

Questions 1 to 19 relate to Policy

Questions 20 to 36 relate to Claim

Question 37 relate to both Policy & Claims

POLICY:-

1)      What is the difference between Package Policy and Third Party or Act or Liability only Policy?

Ans:  (i)       Package Policy:  This covers  loss or damage to the vehicle insured in addition to (ii) below.

         (ii)     Liability Only Policy:  This covers Third Party Liability  for bodily injury and/ or death and Property Damage. Personal Accident Cover for Owner-Driver is also included.

         Motor vehicle on road must compulsorily have at least a liability only Policy.

2)      Is Sum Insured and  IDV the one and the same thing? What does IDV stand for?

       Ans: Yes. Both are the same thing. IDV stands for Insured’s Declared Value. The following is the depreciation                 percentage to arrive at the value or IDV to be applied on The Basic Manufacturers selling price at the time of                     commencement of Insurance or Renewal but which does not include Road Tax , Registration Charges etc but                 includes VAT, if any, on the Basic value of the Vehicle.

       This Sum Insured or Insured’s Declared Value comes in to play only when there is a Total Loss or CTL                            (Constructive Total Loss). A vehicle will be considered to be a CTL,  where  the  aggregate cost of retrieval  and / or         repair  of the vehicle subject to terms and conditions of the policy exceeds 75% of the IDV.

3)      What is NCB, how much is the percentage allowed in my Policy?

Ans: NCB stands for No Claim Bonus. The percentage allowed as discount is calculated on the O.D (Own Damage) section of the Policy.

The left side of your Policy Schedule where premium is calculated for your vehicle (O.D) is where this discount will be applied. Then the net amount is added to the Third Party section (the right side of the Policy Schedule) leading to the total premium payable under the Policy.

4)      I have sold my vehicle and transferred the Insurance. Now, will the NCB earned by me pass on to the new owner?

Ans: No. The entitlement of NCB shall follow the fortune of the original  insured and not  the vehicle or the policy.  In the event of transfer of interest in the policy from one insured to another, the entitlement of NCB for the new insured will be as per the transferee’s (purchaser or new owner) eligibility following the transfer of interest.

5)      How much percentage of NCB will I be losing in case of a claim?

Ans: The NCB on renewal will start afresh, which means that one goes back to square one. Renewed Policies don't have NCB in case claim has arisen in the preceding Policy. This means that there will be no discount at all. So it makes sense not to make smaller claims as one will be losing all the percentage of NCB earned over years apart from the usual  depreciation, Policy excess etc

6)      Can I use NCB of my existing vehicle, which I sold, to my vehicle I am going to purchase?

Ans: Yes. One is allowed 3 years time to use the NCB on the other vehicle from the date of expiry of your previous Policy. The rate of NCB applicable to the fresh  policy shall be that earned at the expiry of  the last 12 months period of insurance.  Eg. Policy period 1/4/2009 to 31/3/2010. Vehicle sold and Policy transferred say on 1/2/2010 with the Policy having NCB of 50%. Since, the Policy did not complete 12 months period, the NCB allowed to be transferred to another vehicle will be 45%, ie the previous year’s slab. 

7)      I did not renew my Insurance in time, what are the consequences? Will I be losing my NCB?

Ans: You will be required to produce your vehicle for inspection along with relevant papers. The NCB will be lost if the Policy is not renewed within a period of 90 days.

8)      Why do Insurance companies insist upon seeing my Driving Licence ? What is compulsory Personal Accident cover? How much is the cover? What does it cover?

Ans: Compulsory Personal Accident Cover shall be applicable under both Liability Only and Package policies. The owner of insured vehicle holding an ‘effective’ driving license is termed as Owner-Driver. Only such person is eligible for this cover.

Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/ dismounting from or traveling in the insured vehicle  as a co–driver.

For Two Wheelers cover is for 1 lakh                     Premium Rs.50/-

For Private Cars cover is for 2 lakhs                       Premium Rs.100/-

For Commercial Vehicles cover is for 2 lakhs          Premium Rs.100/-

i) 100% of cover for Death,  Loss of Two Limbs or sight of both eyes or one limb and sight of one eye. 

ii) 50% of cover for Loss of one Limb or  sight of one eye.

iii)100% of cover for Permanent Total  Disablement from injuries other than named above.

9) My friend residing at Madurai and myself residing at Chennai have the same brand of vehicle, yet, he pays lesser premium? Why? Does premium vary according to place?

Ans: Yes. Geographical places are divided as Zones. Zone A attracts highest premium rates. Zone represents the place of registration of your vehicle.

(i) Private Cars/ Motorized Two Wheelers / Commercial Vehicles rateable under Section 4.C.1 and C.4.

Zone  A:       Ahmedabad, Bangalore, Chennai,  Hyderabad , Kolkata, Mumbai, New Delhi and Pune.

  Zone B:        Rest of India

(ii)  Commercial  Vehicles excluding vehicles rateable under Section  4. C.1 and  C.4.

 

Zone A          Chennai, Delhi / New Delhi, Kolkata, Mumbai

Zone B           All other State Capitals

Zone C          Rest of India

10)  What are the extra benefits that can be opted for while taking Insurance Policy?

Ans: One may take Personal Accident cover to Named or Unnamed persons. In case of unnamed persons, the no of persons to be insured must represent the total seating capacity of the vehicle as mentioned in the R.C and this includes the driver.

         Paid drivers can be insured for a nominal amount.  This covers any liability of the Owner towards the driver as per Workmen’s Compensation Act.

         One can cover Electrical / Electronic items fitted in the vehicle, which is not part of the Manufacturer’s selling price for extra premium.

11)  What are the discounts allowable and additional premium payable  under the Policy?

Ans: Discounts are available for

Anti-Theft devices, Vehicles used within Insured Premises/Sites, Vehicles specially designed/modified for blind/handicapped & mentally challenged persons, Vehicles laid up in garages and not in use for not less than 2 consecutive months, Vintage cars, Member of Automobile Association, Vehicle with side-car, Opting for Restriction of Third Party Property Damage cover(TPPD), Restricted cover for fire and/theft risk (only for vehicle in garage), Restricted cover for liability only and fire and/theft risk etc.

        Additional premiums payable

CNG/LPG fuel, Vehicles used for driving tuition, Electrical/Electronic fittings (4%), Fibre glass fuel tank, Vehicles imported without customs duty, taking part in raliies, Paid drivers/conductors/coolies under W.C, Personal Accident cover Named/Unnamed, to cover certain inbuilt exclusions for certain commercial vehicles, to cover overturning when using the vehicle as tool of trade for certain commercial vehicles etc.

12)  What are the risks covered under the Policy?

Ans: The Company will indemnify the insured against loss  or damage to the vehicle insured hereunder and/or its accessories whilst thereon:

                i.      by fire explosion self ignition or lightning;

               ii.      by burglary housebreaking or theft;

              iii.      by riot and strike;

              iv.      by earthquake (fire and shock damage);

               v.      by flood typhoon hurricane  storm  tempest  inundation cyclone  hailstorm frost;

              vi.      by accidental external means;

             vii.      by malicious act;

            viii.      by terrorist activity;

              ix.      whilst in transit by road rail inland waterway lift   elevator or air;

               x.      by landslide rockslide.

13)  What are the exclusions under the Policy?

Ans: Policy will not cover

(a) Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown failures or breakages;

(b) Damage to Tyres and Tubes unless the vehicle insured is damaged at the same time in which case the liability of the company shall be limited to 50% of the cost of replacement.

(c) Loss of or damage to accessories by burglary housebreaking or theft unless the vehicle is stolen at the same time ;(Not Applicable to Private Cars) and

(d) Any accidental loss or damage suffered whilst the insured or any person driving the vehicle with the knowledge and consent of the insured is under the influence of intoxicating liquor or drugs.

(e) For damage caused by overloading or strain of the insured vehicle (Applicable only for Commercial Vehicles)

14) My vehicle is financed? Should I insist the same to be mentioned in the Policy?

Ans: Yes. The name of the financiers has to be mentioned in the Policy to protect their interest in the vehicle.

15) Is Motor Insurance business still under Motor Tariff?

Ans: Yes & No. It has already been de-tariffed w.e.f 01/01/2007 but only in respect of rating. Tariff general regulations (other than those relating to rating), terms, conditions, clauses, warranties, policy and endorsement wordings continue. The rates of premium may be varied subject to compliance with the Guidelines on ‘File and Use’ with IRDA. However in respect of third party or liability only part of policy premium, it is still controlled by IRDA.   Many Insurance Companies are giving discounts on OD (Own Damage) part of premium to capture business. They have some internal regulations in place, to stop adverse impact of discounts. One may find no discount / discount / more discounts at different offices of the same company itself!

16) What does TPPD stand for? What is the coverage under my Policy?

Ans: TPPD stands for Third Party Property Damage. The damages caused to property of others by accident are covered under policy. The amount of cover is Rs1 lakh for motorcycle and Rs.7.5 lakh for other vehicles. One is allowed to reduce the inbuilt coverage to statutory amount of Rs.6000/- and avail a small discount on the premium. Smaller claims are settled directly, while others are subject to outcome of litigation.

17) What is Third Party Injury or Death? What is the coverage under my Policy?

Ans: Injury or Death caused by use of Insured vehicle upon third parties. There is no limit specified in respect of compensation for Injuries or death. MACT (Motor Accidents Claims Tribunal) Courts decide the amount case by case.

18) Is the risk of overturning of my vehicle covered?

Ans: Yes and No. Overturning risk is already covered. Except that overturning during operational use as a tool of trade can be covered only upon payment of additional premium.

(a) Mobile Cranes

(b) Mechanical Navies, Shovels, Grabs, Rippers and Excavators

(c) Dragline Excavators,

(d) Mobile Drilling Rigs 

(e) Mobile Plant

Can be covered by additional rate of 0.5% on IDV of the vehicle subject to a minimum additional premium of Rs.100/-.

19) What happens to the policy in case of death of the Insured?

Ans: The policy does not lapse immediately but remain valid for 3 months from date of death or expiry of policy period whichever happens earlier. Within such time legal heir(s) who desire to transfer the policy or get a new one should apply with

a) Death Certificate in respect of the insured 

b) Proof of title to the vehicle 

c) Original  Policy

CLAIMS:-

20) In case of a claim will the amount be paid to me or to my financiers?

Ans: In case of partial losses the amount will be paid to you. But in case of total loss the amount will be paid to the financiers as they are the real owners of the vehicle.

21) Where should I intimate my Claim in case of accident?

Ans: Look for the Policy issuing office address and phone no in the Policy and intimate. The other options are to look for contact number in company’s website, where you can also look for the nearest office of the Insurance Company or your Insurance agent. Intimation done quickly will help the company to arrange for spot survey if necessary. Intimation done by phone has to be followed by a written intimation.  Nowadays, companies operate exclusive claim handling Hubs, usually at Metros. So one should enquire with the Company as to which office will be handling my claim.

22) What is spot survey? Is it necessary?

Ans: Survey done by Surveyor at the spot of the accident is Spot Survey. Companies insist for Spot Survey so that they can have a check over inflated claims / fraudulent claims. Usually spot survey is very much insisted for commercial vehicles. Companies practice differs. Wherever it is not possible to arrange for spot survey,   Insurance Companies may advice the Insured to take a few photographs of the Insured vehicle at the accident site in different angles. The photo charges are paid at the time of claim settlement.

23) Who pays the Survey Fess?

Ans: Survey fees are paid by the Insurance Company directly to the Surveyor. In certain cases like Spot Survey the Insured sometimes pay the fees to the Surveyor and gets the bill reimbursed along with the claim amount from the Insurance Company.

24) Can my repairer dismantle and start the repairs?

Ans: No. Only after the Surveyors consent and presence should the vehicle be dismantled to look for further damages that was not visible superficially. Surveyors discuss with the repairers and give his consent for the parts and labour charges that he feels is reasonable and relevant to the accident.

25) What are the documents that I need to submit?

Ans: Intimation form (some Co’s don’t insist), Claim form duly filled, Policy copy, Estimate from the repairers looking at the superficial damages of the vehicle. Supplementary or additional estimate may be obtained after dismantling the vehicle in Surveyor’s presence.

One should also submit R.C-Registration Certificate, Driving Licence of the person who drove at the time of accident, F.C-Fitness Certificate particulars, Road Tax particulars, Permit particulars, Load Challan in case load was carried at the time of accident , Trip Sheet in case passengers were carried at the time of accident, FIR true copy  etc wherever applicable.

Xerox copies of the same and corresponding Originals for verification and return. The documents submitted should be latest & relevant to the date of accident.

Insurance Companies apart from their officials allow Surveyors, certain dealers etc to verify the Originals.

Original documents may also be verified at any of the Insurance Companies offices.

Claim Bills:-

a) Proper bill giving break up of parts and price, labour charges.

b) Payment receipt in respect of the above bill, as proof of payment made.

c) In case spot survey charges was paid by the Insured to the surveyor, the amount will be reimbursed while making claim payment. The surveyor mentions the same in his survey report. In case receipt was given by the surveyor, the same may be submitted for reimbursement.

d) Towing Bill Receipt with details of towing vehicle no and the towed vehicle no, towed place details from and to.

e) In case payment needs to made in favour of the repairer, a satisfaction voucher signed by the Insured.

f) Original Policy in case of Total Loss.

g) Any other document called for.

For theft claim documents refer question no 36.

26) Should I surrender my Original Policy for making a claim?

Ans: No. Xerox copy or true copy will do. But in cases of Total Loss (Including Theft) / Constructive Total Losses, Policies are required to be surrendered for cancellation.

27) Is FIR must for making a claim?

Ans: No. Usually for smaller claims and one that does not involve third party injury or third party property damage,  FIR is not required.

28) Is the amount incurred for immediate repairs and towing charges to tow the vehicle from accident site to repair garage payable?

Ans: Yes. Immediate repairs and Cost of protection & removal  to nearest repairer and re-delivery is payable as per below schedule.

                                                      Towing            Immediate Repairs

Commercial Vehicle                                            

3 wheeler                                       750                    500

Taxis                                              1500                   500

Other Commercial Vehicles     2500                   500

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2 Wheelers                                      300                  150

Private Cars                                   1500                  500

29) Should I pay the bills in the first place?

Ans: Yes. The bills are required to be submitted after which the Company pays the eligible amount. Some company’s have tie-ups with repair garages whereby cashless services is offered.

30) Can I insist upon the Insurance Company to pay directly in favour of the repairers?

Ans: Yes. The Insured will be required to sign a satisfaction voucher so that payment can be made directly to the repairers. The Insured will be required to pay the remaining amount not payable under the Policy to the repairers.

31) What is re-inspection? Is it necessary?

Ans: Survey/Inspection by Surveyor of the vehicle after the repairs have been carried out is called re-inspection. This is done to make sure that parts are indeed replaced and repairs carried out as per Surveyors approval. Enquire with your company before taking delivery of your vehicle. Insurance Companies have their own yard stick to determine whether re-inspection is needed.  Eg. Spare parts value more than Rs.20,000/- for private cars, irrespective of amount for commercial vehicles and no re-inspection for motorcycles.

32) What happens to the old parts that were replaced?

Ans: Nowadays Insurance companies don’t collect the salvages (old parts) as they will have to find space to store and incur expenses to dispose off the same. Hence, an amount is deducted in the claim amount and the Insured is allowed to retain those old parts. He is now free to dispose the old parts of his vehicles.

33) Why is it that my claim amount is considerably lower than the amount I paid for repairs? What are the deductions made in my claim?

Ans: All motor Policies are subject to compulsory excess in order to avoid smaller claims. Eg Motorcycle Rs.50/- Private Cars not exceeding 1500cc Rs.500 and exceeding 1500 cc Rs1000/-. Apart from the above Companies may have imposed excess on their own, owing to high claim experience or oldage of your vehicle etc. Look for excess amount applicable to your vehicle on the Policy.

 Depreciation on Parts for Partial Loss Claims

The following rates of depreciation shall apply  for replacement of parts for partial loss claims in respect of all categories of vehicles / accessories.

Surveyors allow only damages that are relevant to the accident. Verify whether repairers have carried out repairs not allowed by the Surveyor. Those portions have to be borne by the Insured.

34) Is it True that headlight, bumper, mudguard, tyres, tubes, bonnet side parts, painting are not covered for certain vehicles? If yes, can I insure the same by paying extra premium?

Ans: Yes. It is applicable to Commercial Vehicles excluding taxis and motorized two wheelers carrying passengers for hire or reward.

Yes. It can insured by paying extra premium at the time of taking policy itself. Even then such claims are payable only for 50% on the amount arrived at after the usual depreciation.

35) Theft claim will be paid to me or my financiers?

Ans: By default Theft claim being a total loss claim will be paid only to the financiers. But when the dues are over and the financiers give a NOC to pay to the Insured, payments are made to the Insured. Sometimes, Insurance Company insist that the financiers interest mentioned in the R..C  also be cancelled in case loan dues are over.

36) What are the additional documents I will be required to submit in case of theft of my vehicle?

Ans: In case of theft of vehicle immediately intimate Police authorities, Your Insurance Company, Your RTO where your vehicle was registered.

FIR is a must, so obtain the same without delay. Intimate RTO about the theft with FIR details and insist that they not issue any duplicate R.C without your consent. Get an acknowledgement for your intimation and in case they don’t accept in person sent it by RPAD. Keep the copy of such intimation and acknowledgement card safely, as it will be required to be submitted later on.

In case the vehicle remains untraced police authorities issue NTC- Non Traceable Certificate which is necessary to get an Insurance Claim. Usually police authorities give NTC only after 3 months Some companies also insist for the court order giving consent to the Police to declare the vehicle as untraceable.