Car Insurance

 

Car Insurance

Car insurance is a scheme offered to escort the safety of consumers against loss due to any kind of accident. An agreement or a policy is defined when the insurance company and the consumer constitute specific protective covering necessitating vehicle ownership. The contract comes into act when an insurance company accords to render benefits against any unfortunate happening from an accident affecting a vehicle. The inclusion of damages varies according to a company’s policy. Some of the common damages admit property, medical treatments, physical injury or death etc

In India, a valid insurance is necessary for all the motor vehicles on road. It is obligatory for each individual possessing a vehicle to get it insured. The two types of vehicle insurance are:

1. Motor policy A (act policy)

2. Motor policy B (comprehensive policy)

Motor policy A

This policy covers third party risk involving a vehicle under Motor Vehicle Act. Under the section 146 of Vehicles Act 1988,it is compulsory for every car owner to get their vehicle insured against risk act policy.

The policy ensures to pay the recompense in case of injuries or death to third parties and also for the impairment caused to the property of third party. Third party includes all others except the Insured and the insurance company who are treated as the first and second part respectively.

For the private vehicles,’ Act Only Policy’ addresses damages of third party property only up to Rs. 6000. Paying extra premium can include theft and fire risks.

Motor policy B

The policy is also known as comprehensive insurance policy. The policy insures the following features:

1. Damage or loss caused due to fire, theft or an accident.

2. Third party coverage

3. Risks against riots, strikes, flood and earthquake.

4. Damage or loss during transit by rail, road, elevator, air, water etc.

5. Accessories like stereo, music systems, air conditioner, etc. can also be comprehended by paying extra premium.

 

Validity of insurance

 The insurance policy remains valid for a year. It comes into existence when the company receives the premium payment and lasts for one year from that date.

 Renewal of insurance

One must get the insurance policy renewed within the existing validity period. If the renewal time expires, then the policy is rendered invalid and no benefits can be availed under the policy. Besides, it is also a legal offence to drive with the expired insurance policy.

Transfer of policy

If a person purchases a second-hand or a used car, the existing policy can be transferred to buyer’s name by giving necessary information to the insurance company within the time period of 14 days from the date of purchase of the car.