This
is insurance which protects the insured against losses involving
the use of automobiles. Various coverages may be bought
depending on the desires of the insured. Such coverages
include the liability coverages of bodily injury, property
damage, and medical payments, and the physical damage coverages
of collision and comprehensive
Under
the provisions of Motor Vehicles Act all the vehicles which
are plying in public places shall have at insurance policy
at least to cover third party liability as specified under
the Act. There are two types of policies available for motor
vehicles - third party insurance -policy A and comprehensive
insurance policy- policy B.
For
the purpose of insurance, motor vehicles are divided into
three classes:
Private
cars: This category comprises of cars, including station
wagons, used for social, domestic, business or professional
purposes (excluding those used for the carriage of goods
other than samples)
Motor
Cycles: This includes motorcycles with or without sidecars,
pedal cycles, mechanically assisted pedal cycles and motor
scooters with or without sidecars
Commercial
Vehicles: All vehicles excluding private cars, motor
cycles and vehicles running on rails come under this category
Unlike
in western countries where the driver's age and driving
record and the make/feature of the car are the important
factors deciding the premium payable for Auto insurance,
in India the cubic capacity, use of car, normal area of
operation and the value of car proposed for insurance decide
the premium payable and also various extensions opted for.
In
case of an accident, the insurance company pays for cost
of damaged parts which are replace and the labour cost to
repair the vehicle. As per the revised regulations, depreciation
is not deducted from the cost of the parts except for the
tyres and tubes for which 50 percent depreciation is deducted.
