The need for motor insurance arises from the need to cover expenses on damage to the vehicle and the risk to human life in the event of an accident. Here, 'motor' refers to all self propelled vehicles, for example, it does not include bicycles which are not self propelled.

Motor insurance is classified into two major categories

• Third party liability insurance
• Comprehensive insurance

Third Party Liability insurance : any liability arising due to your vehicle on the road is covered by 'Third Party Liability' insurance. The liability could be in the form of damage to another vehicle or in the form of risk to someone's life. It is important to remember motor insurance covers the vehicle and not the driver, therefore it is immaterial who is driving given that the driver has a valid license and is fit to drive.

Since Third Party Liability Insurance covers only the risk arising to the third party, it does not cover theft of your vehicle or damage arising to your vehicle. Therefore, if you are involved in an accident where life or property is involved, this insurance covers damages to the underlying property and life but does not cover damages to your vehicle.

Also, the fact that this insurance covers the potential risk to other people or property, the premium you pay does not depend on the type of car you own. In other words, whether you own an imported vehicle or an indigenous one, the premium you pay depends on the value of cover you want to have.

Comprehensive insurance : this insurance covers risk to third party as well as 'own damage' to your vehicle. Therefore, if you are involved an accident this insurance covers damage to your vehicle as well as damage to other life or property in the accident. Therefore, under the comprehensive policy, in the event of an accident, the owner of each vehicle involved claims for damage from his or her insurance company.

It is recommended that you take comprehensive insurance on the depreciated value of the vehicle. In other words the year on year premiums you pay will reduce based on the depreciated value of the vehicle. In this case, if your vehicle is involved in an accident where the vehicle is completely damaged and has to be written off, you can claim only the depreciated value of the vehicle.

Loss or damage to a vehicle is included in the 'Own damage' form of insurance when the contingency is caused by the following perils:

Accident 'external' includes:

• Fire, explosion, self-ignition, lightning, burglary, house breaking or theft or by malicious acts.
• Transit by road, rail, inland waterway, air, lift or elevator.
• Act of terrorism
• Riot and strike, earthquakes, flood & storm.
• Landslide & rockslide.

'Own damage' does not include:

• Wear and tear and depreciation
• Mechanical or electrical breakdowns, failures or breakage
• Theft of accessories if the vehicle itself is not stolen and
• Consequential loss

In this section, additional protection on payment of extra premium is available against:

• Extra fittings like tape recorders, air-conditioners, fans etc.,
• Personal accident benefits of passengers.
• Wider Legal Liability under Common Law for employees engaged in operation of vehicles such as paid driver and cleaner as also six coolies/ bonafide employees carried in/on good trucks.

What should you do if you are involved in an accident?

When your car meets with an accident, take it to a garage, get an estimate from the garage. Inform your insurance company about the damage and while doing so refer to your policy. The company will depute a surveyor who will visit the specified garage where your vehicle is. The surveyor will inspect your vehicle, go through the estimate in consultation with the garage personnel and give his inspection report to the insurance company. This represents the maximum amount that the company will pay. After the repair is carried out, the surveyor will need to be called again and the job done is certified. After this, the claim form duly filled in along with bills should be submitted to the company.

If you follow the above process and provide the company the following documents on time the company will settle your claim in about 2 to 3 weeks. The documents required are the policy number and details, RC book, TC book, driver's license, all the bills and police panchnama (if any).

In short,

1. take the vehicle to the garage'

2. get an estimate of the damage from the garage

3. inform your insurance company of the damage with copy of policy and an estimate of expenses provided by the garage

4. the company will depute a surveyor (usually within 48 hours, in the case of big accidents a spot survey)

5. get vehicle inspected by surveyor (the garage representative can represent you), discuss repairs and replacements

6. get the estimate approved

7. if you agree with the estimate, get the vehicle repaired. The repair should start after the estimation is done, if repair starts before, the surveyor may not be in a position to give the correct estimate. (If you do not agree with th estimate you will have to independently get the opinion of an auto expert)

8. after the completion of repairs, the surveyor comes once again to certify that the job has been done in accordance to the estimate

9. you then need to fill the claim form and provide the relevant bills, and on demand submit RC book, drivers license, police panchnama if any.

In the case of an accident involving two or more vehicles, each party will claim from his/her insurance company in accordance with coverage.

While motor insurance covers the vehicle and/or a third party, safe driving is in the hands of the driver. For not making any cliams on the company, the driver is awarded with a 'no cliams' bonus. A 'no claims' bonus gets the owner a reduction on the premium to be paid. Year on year the 'no claims' bonus accumulates. In other words if you buy a new vehicle the bonus can be transferred to the new vehicle and you will have to pay much lowar premiums. If you sell the car the bouns will not be passed on to the new owner but will be transferred when you buy the next vehicle.

However