Latest Articles
Back
Motor Vehicle Insurance Law
Motor Vehicle Insurance Law
Insurance law of motor vehicles in India is governed by the MV Act,1988, Insurance Act,1938 and aspects of insurance contracts governed by the Indian Contract Act, 1872, Transfer of Property Act,1882 and some others. motorized vehicle insurance is that the sum of money of motor vehicle of third parties arising out of the utilization of a motorized vehicle and also for covering the danger of injury caused to the vehicle. Taking insurance for coverage of certain risks are made compulsory and coverage for other risks are optional at the instance of the owner. A motor vehicle insurance policies are divided into two. They are compulsory policy (Act policy) and comprehensive policy.
A motorized vehicle during a public place is potentially a dangerous and lethal instrument. Hence, unlike other properties in which the decision of the property getting insured or not is at the selection of the owner, a motor vehicle is to be insured as per the requirement of law in respect of the user's liability for death, bodily injury or damage to property of a 3rd party. These varieties of insurance contracts are supported indemnity and only cover the damage, and so the full insurance amount isn't given whenever .
The Bill instructs the Central Government to make a special motor vehicle Accident Fund that may be designed to supply compulsory vehicle insurance to vehicle owners. insurance and two-wheeler insurance offered by the Govt. has been targeted to ensure:
- Medical treatment for road accident victims under the ‘golden hour’ scheme.
- Monetary compensation to the following of kin of someone who has died during a ‘hit and run’ accident.
- Monetary compensation to the subsequent of kin for someone grievously injured during a ‘hit and run’ accident.
- Monetary compensation for other victims as identified under the new guidelines.
The driver of the vehicle in some situations can be an individual of small means and injured person goes without adequate compensation, insurance of automobile covering the third party risk is created compulsory in India. So the MV Act provides that, vehicle should not be used in public place without having policy covering third party risks. Third party means any individual except the owner or passenger within the private vehicle. So pillion riders of the motorcycle, passengers in private cars, jeeps etc. aren't third parties. However, passengers publicly vehicles like buses. contract carriage vehicle, taxi etc. also are third party and hence covered by third party or statutory policy.
The occupants of private vehicles and pillion riders aren't covered by the Act policy. However, they will be covered by paying an extra premium of insurance. If additional premium isn't paid to cover the danger of occupants of private vehicles and pillion riders, insurance companies won't be vulnerable to compensate such victims. However, the Supreme court held that if the policy could also be a package/comprehensive policy, then the occupants of private vehicles and pillion riders are covered, although the additional premium of coverage of such person isn't paid.
As the users of motor vehicles have increased in India, insurance companies are also increasing. There are only a few players which are identified by the Insurance Regulatory and Development Authority of India.
