Sunday, 17 July 2022

Motor vehicle insurance

 Motor vehicle insurance

The motor vehicle in the modern era has become a necessity. In these last few years, India has seen a rise in the cases of motor vehicle accidents. In the 14th century, there was the introduction of insurance as a contract between two parties in which one of the parties is an insurer. The amount is payable when a personal injury is caused to another due to which a legal liability arises. 

In India, there are different types of insurance, but the most common insurance is motor vehicle insurance. Motor Vehicle insurance (also known as, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. A motor insurance policy is generally combined insurance that insures the damage to the motor vehicle and its accessories, liability for property damage, death of, or injury to the assured himself or spouse and it also ensures the motor vehicle against the risk of liability for injury to or the death of third parties caused by the driver's negligence. In some jurisdictions, coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No-Fault Auto Insurance).

In some cases, there is a third party involved. the best example of this would be motor vehicle insurance. according to the motor vehicle act of 1988, it is necessary for every driver on the road to have insurance. The vehicle used can be for social or domestic movement but it has to be insured. 

The motor vehicle act, of 1988, is passed in 1939 and amended in 1988. This act provides, third party insurance or liability coverage is considered to be a statutory requirement. This means there are only two parties are involved in a contract.   In India, this type of insurance can be purchased at the time of purchasing the car but the price of comprehensive cover is multiple times that of a normal insurance cover as it is more frequently claimed than third party claims. 

There are various types of insurance 

3 categories;

Private cars and vehicles 

Commercial vehicles

Miscellaneous and special vehicle

Risk under motor vehicle insurance ;

Towards others

Own life and property 

Basic principles of motor vehicle insurance 

1. All requirements of a valid contract

2. Utmost faith

3. Insurable interest 

4. Indemnity

5. Subrogation and constitution 

6. Proximate cause 

Types of motors insurance policy 

1. Liability only policy –person +3rd person

2. Package policy – above policy +vehicle damage

3. Comprehensive policy –above two categories +fire+theft; when a car is sold and the policy is to be transferred, then the insurance company has to be informed within 15 days of such resale and act to transfer the policy.

Double insurance can be taken in the case of motor vehicle insurance.

4. Claims arise when 

The misused’s vehicle is damaged or any loss has occurred 

Legal liability due to death or injury 

5. Damage to third party’s property 

Claim settlement is done by opting for any of the two 

Replacement or reinstatement of the vehicle

Payment of repair charge

 Case: National Insurance co. ltd  v.  Fakir Chand (AIR1995)

J and K the court held that ‘ third party' also includes a person traveling in another vehicle, one walking on the road, or the passenger in the vehicle itself which is the subject matter of the insurance policy. Although, this term does not include the contracting parties to the insurance policy.

Case; Oriental Insurance  v. Inderjit Kaur ( 1998)

If the insurer has issued a policy to cover the bus without receiving the premium, therefore, he has to indemnify third parties in respect of the liability covered by the policy. He can’t avoid the liability arguing that was entitled to avoid or cancel the contract

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