The Insurance Regulatory and Development Authority (IRDA) has formulated guidelines that have to be adhered to, by any general insurance company offering motor insurance policies in India
What does Motor Insurance offer?
A Motor Insurance policy offers comprehensive coverage to the policyholder against the following –
- Damages to the insured vehicle,
- Compensation for Third Party Liability against the vehicle owner inclusive of Third Party Property Damage
Types of Motor Insurance policies in India
Insurance companies across the country offer two types of motor insurance covers for vehicle owners –
a) Liability Only Policy – Third Party liability insurance is mandatory for all registered vehicles in India.
If a customer chooses a Liability Only Policy, then vehicle damages will not be covered by the insurer.
b) A Comprehensive Package Policy – Protection against damages to the vehicle plus the Liability Only Policy.
A Package Policy would offer a car owner wider coverage for their insured vehicles.
Coverage under any Motor Insurance policy in India
Damages occurring on any vehicle due to the following natural and man-made perils are covered –
| Natural Disasters/Perils | Other types of perils |
| Fire | Theft / Burglary |
| Lightning | Housebreaking |
| Earthquakes Floods/Cyclones/Storms/Tempests/Hurricanes/ Frost / Hailstorm / Inundation | Explosion |
| Rockslides / Landslides | Self-Ignition |
| Strikes / Riots / Terrorism/Malicious Acts | |
| While the vehicle is in transit through any means of transport | |
| Accidental External Sources |
Exclusions under any Motor Insurance policy in India
A Motor Insurance policy taken from any insurer in India will come with certain exclusions and will not offer coverage for the following –
- Individuals driving without a valid driving license or under the influence of alcohol, drugs and other intoxicating drinks.
- If the accident has taken place outside the geographical area covered under the policy
- Mechanical or Electrical breakdowns in the vehicle and
- If the insured vehicle has been used for any unlawful reason.
Sum Insured for a Motor Insurance Policy
The sum insured is determined for Own Damage coverage as given below –
The insurance company will determine the sum insured according to the current value of the vehicle as per the manufacturer and the depreciation value depending on the age of the vehicle. Here, the sum insured is the value for which the vehicle has been insured and is known as the Insured Declared Value (IDV).
The sum insured is determined for Third Party coverage as given below
For third-party coverage, the sum insured is determined as per the Motor Vehicles Act, 1988 and also includes a mandatory personal accident cover for the car owner. The motor insurance policy can also be taken with inclusions like workmen’s compensation for the driver, personal accident coverage for co-passengers, etc.
Customer Turnaround Times as approved by the IRDA
| Issuance, processing and Cancellation of policies | 15 days |
| Issuance of proposal copy | 30 days |
| Services after issuance of policy/ Refund of proposal deposits/ Non-claim requests | 10 days |
| Submission of survey report | 30 days |
| Addendum Report for the insurer | 15 days |
| Claims – settlement/rejection after the addendum report has been received | 30 days |
| Acknowledgment of a grievance | 3 days |
| Resolution of a grievance | 15 days |
Documents Required to Be Kept in Insured Vehicles
- Certificate of Insurance
- Pollution under Control Certificate
- Driving License – photocopy
- Registration Certificate – photocopy
Documents to Be Submitted While Making Motor Insurance Claims
- Filled-in Claim Form
- RC book of the vehicle
- Estimate of Loss – Original
- Repair Invoice – Original
- Payment Receipt
For cashless settlements – Repair Invoice and FIR (if required)
For theft claims – Non-traceable certificate/ Keys of the stolen vehicle
