WRITE UP ON MOTOR INSURANCE FOR P.E.

2020

COMPILED BY VISHNU AGGARWAL, ORGANISING SECRETARY, OICOA

DRIVING LICENCE - Licence should satisfy two requirements of being effective and being qualified. The
effectiveness is both for duration and type where as the qualifications are the pre requisites a person should
have to possess a particular class of licence. The table below states the parameters of effective and qualified
licence of different category:
Effectiveness Qualification
Sec. 10 Type Duration Min. Others
Age
a) M/Cycle not If the age of Driver is <30 years on the date of 16 yrs. No
exceeding 50 CC issuance of DL - date on which the driver attains
b) M/Cycle with the age of 40 yrs.; 18 yrs.
gear If age of Driver is > 30 yrs. but < 50 years – 10 yrs.;
c) Invalid carriage If age of Driver is > 50 yrs. but < 55 years – date on
d) LMV (with GVW which the driver attains the age of 60 yrs.;
upto 7500 Kgs.) If age of Driver is > 55 yrs. – 5 years
e) Transport 5 years 20 yrs. No Learner Licence
Vehicle issued. One year
after issuance of
LMV Licence.
f) Road Roller 3 years 20 yrs. Medical Required
Learners Licence 6 months Depends on Vehicle
Expired Licence If the application for renewal of the licence is NA All licences except
made either one year prior to date of its expiry or Learner’s Licence
within one year after the date of expiry - Renewal
of Licence w.e.f. the date of its renewal.
Endorsement to carry 3 years and renewal thereof shall be subject to 20 yrs. Medical/ Transport
goods of dangerous or such conditions as the Central Govt. may Veh. Licence/English
Hazardous nature prescribe. and one language
from schedule VII
Amendment 1994 in MV Act 1988 (effective from 14-11-1994)
 The word “Without Gear has been replaced with upto 50 CC”
 Medium Goods Vehicle/Medium Passenger Vehicle and Heavy Goods Vehicle/Heavy Passenger Vehicle have
been replaced by a single entry “Transport Vehicle”.

Registration Certificate
 Sec. 39 states that No person shall drive or permit any motor vehicle to be driven in any public place or in
any other place unless the vehicle is registered in accordance with the Motor Vehicle Act, 1988.
 Valid throughout India.
 Valid upto 15 years from the date of issue for vehicles other than transport vehicle, Renewal for 5 years.
 Validity for Transport Vehicle depends on Fitness i.e. RC valid only when vehicle carrying Certificate of
Fitness.
 Temporary Registration valid for 1 month
 In case of transfer/Sale of vehicle
 Seller to report the sale within 14 days for transfer in the same state or 45 days in case vehicle is
registered outside the state.
 Owner to apply for transfer within 30 days from the date of sale.
 In case of Total Loss, Owner to send RC to concerned RTO within 14 days for its cancellation. To be
ensured by insurer before releasing the claim payment.

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FITNESS:
 Section 56 of the 1988 Act states that in case Fitness has expired on the date of loss, the vehicle shall not be
deemed to be registered under Sec. 39 of the Motor Vehicle Act 1988 (Central Motor Vehicle Rules 52 for
renewal of certificate of registration and Rule 62 for the validity of the Certificate of Fitness).
 For Transport Vehicle – Valid for 2 years for brand new vehicle and 1 year for further renewals

PERMIT:
Sec. 66(1) of the Act 88 - Necessity for permit—No owner of a motor vehicle shall use or permit the use of the
vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers
or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State
Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the
manner in which the vehicle is being used.
However, transport vehicles belonging to Central or State Govt., Police, Local body, Fire Brigade, Ambulance,
vehicles used solely for conveyance of corpses and mourners accompanying the corpses, Cranes, Temp. regd.
Vehicles being taken for the purpose of registration, route diversion due to flood, natural calamity, obstruction
of road, unforeseen circumstances, vehicle being taken under possession by the financier till its destination and
Goods vehicle having vehicle weight not exceeding 3000 Kgs. are exempted from the necessity of permit.

Validity for 5 years (except for Temporary or special permits). Renewal takes place with effect from the date of
expiry even in case of gap in renewal.

In case of death of permit holder, next person possessing the vehicle shall be eligible for use of permit for 3
months provided RTO is informed within 30 days of his death.

History of Motor Insurance

 The origin of Motor Insurance lies in U.K. First Motor Policy introduced in England in 1895 to cover Third
Party Liability. Comprehensive policy covering own damage was introduced in 1899. Compulsory third party
insurance introduced through passing Road Traffic Acts 1930 and 1934.
 In India, Motor Vehicle Act was passed in 1939 introducing the Law for compulsory Third Party Motor Ins.
 New Motor Vehicle Act 1988 replaced the 1939 Act and became effective from 01.07.1989.
 In India, we generally follow the practice of Motor Insurance as followed in the UK Market.
 New Motor Tariff came into existence w.e.f. 1st July, 2002 having 49 General Regulations which is still being
followed.
 In India motor was a tariff business till 31st of December 2006, from 1st of Jan. 2007 it has been withdrawn.
However, the Premium rates for Liability Only Section are still regulated by the regulator i.e. IRDAI.
 Detariffing is only for rates and discounts. Basic structure of terms, conditions and wording continues as
contained in the said tariff
 Any add on cover can be given under the IRDA provisions of file and use.
 The basic Principles of Insurance are also applicable to the contracts of Motor Insurance -
 Insurable Interest-Insured–Owner/Dealer/Hire Purchase/Hypothecation
 Indemnity-Insured is placed after the loss in the same position as he was immediately before the loss- No
Profit/No Loss. Total loss/CTL/Repair Claims
 Utmost Good Faith (Uberrimae Fides) – Legal obligation on the proposer to disclose all material facts to
insurer. Proposal Form Mandatory, declaration clause modifies the Common Law duty into Contractual
duty of utmost good faith. Answers given in proposal form become warranties.
 Subrogation–T/f of rights from insured to insurer to recover for loss/damage due to negligence of
another person. Modified in Knock to knock agreement.
 Contribution–In case of Double Insurance–Loss to be shared on prorata basis
 Proximate Cause-Claim payable only if caused by insured peril

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Motor insurances business in India was governed by Tariff since 1970 till Dec. 2006. Tariff discontinued w.e.f.
01.01.2007 but policy wordings are required to be continued. The existing policies are termed as standard
policies with insurers free to provide add-on covers as approved by IRDA under File & Use Guidelines.

Types of motor vehicle for the purpose of Insurance

A. Private Car
B. Motor Cycle/ Scooter
C. Commercial vehicle – GCCV, PCCV and Miscellaneous Type Vehicles

Type of Policies – I) Liability only policy : Minimum cover required under MV Act to cover Act liability.
II) Package policy : To cover own damage losses & Act liability.

Difference between the Liability Only Cover and Liability Cover under Package Policy –
The Liability cover under Package Policy is wider than the cover available under Liability only Policy. In case of
Pvt. Car and Two Wheeler Package Policy, the Liability Section covers death of or bodily injury to any person
including passengers/pillion rider provided such occupants are not carried for hire or reward.
And in case of Commercial Vehicles Package Policy, the Liability Section covers death of or bodily injury to any
person (including owner of goods or his representative travelling in the vehicle) caused by or arising out of the
use (including the loading and/or unloading) of the vehicle.
This provision is not available in Liability Only Policies
Also, the Exclusion of coverage for any accidental loss or damage suffered whilst the insured or any person
driving the vehicle with the knowledge and consent of the insured is under the influence of intoxicating liquor
or drugs, is not available in the Liability Only Policies.

MOTOR TARIFF CONTAINS 8 SECTIONS :

1. General Regulations
2. Tariff for Private Car
3. Tariff for Motorised Two Wheelers
4. Tariff for Commercial Vehicles.
5. Proposal forms.
6. Standard wordings in respect of Policy, Certificate of insurance, covernote.
7. India Motor Tariff (IMT) Endorsements.
8. Statistical codes.

For the purpose of rating, the Tariff for Commercial Vehicles is further divided as under:-

A. Tariff for Goods Carrying Vehicles –

4.A.1 Public Carriers - other than 3 wheelers
4.A.2 Private Carriers - other than 3 wheelers
4.A.3 Public Carriers - 3 Wheeler & Motorised Pedal Cycles
4.A.4 Private Carriers - 3 Wheeler & Motorised Pedal Cycles
B. Tariff for Trailers.
C. Tariff for Vehicles used for Carrying Passengers for Hire or Reward
4.C.1 - 3 / 4 wheeler Vehicles - not exceeding 6 passenger
4.C.2 - 4 (or more) wheeled PCV with > 6 passengers and 3 wheeled PCV >17 passengers
4.C.3 - Motorized 3 wheeled PCV > 6 passengers but not exceeding 17 passengers
4.C.4 - two wheelers PCVs
D. Tariff for Miscellaneous and Special Type of Vehicles.
E. Tariff for Motor Trade – Road Transit Risks only – For transport risk during the period of transit from one
place to another and limited to the risk during transit naming the points of departure and arrival.

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F. Tariff for motor Trade – Road Risks only – On the basis of Trade Certificates, Named Drivers. Cover upto
Rs.25,000/- which can be extended on payment of additional premium.
G. Tariff for Motor Trade – Internal Risks only – Risks of Motor Manufacturers and Motor Assembly Factories
and risks comprising solely Motor Body Builders. Petrol Filling stations are out of the scope. Where
premises are occupied as Showrooms only 50% of the above rates are to be charged.

Package policy - Risk covered Section – loss or damage (or own damage) risk covered – Loss by

a) Fire, Explosion, self ignition or lightning

b) Burglary, house breaking or theft
c) Riot & strike
d) Earthquake (Fire & shock)
e) Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone, hailstorm
f) Accidental external means
g) Malicious Act
h) Terrorist activity
i) Transit by road, rail, inland water way, lift, elevator or air.
j) Land slide & rock slide

EXCLUSIONS (RISKS NOT COVERED OR EXCLUDED) :

a) Consequential loss, Depreciation, Wear & tear & Mechanical & electrical breakdown, failures or breakages
b) Damage to tyres/tubes unless the vehicle is damaged at the same time (50% of cost of replacement is
payable)
c) Any accidental loss/damage suffered whilst the insured or any person driving with the knowledge and
consent of the insured is under the influence of liquor or drugs
d) Loss when the vehicle is used in breach of ‘Limitations as to Use’
e) Loss when the vehicle is used in contravention of ‘Drivers Clause’
f) Losses arising directly or indirectly out of war & war like perils & from nuclear weapon material.
g) Loss or damage to accessories unless the same are on the vehicle.
h) In case of motor Cycle, Loss or damage to accessories by burglary, house breaking or theft unless the vehicle
is stolen at the same time.
i) Loss when the vehicle is used Outside geographical area
j) Contractual Liability Claims

In motor Cycle and Commercial vehicle there are additional exclusions:

a) Loss or damage to accessories by burglary, house breaking or theft unless the vehicle is stolen at the same
time.
b) In commercial Vehicle –
Damage caused by overloading or strain of the vehicle.
Loss/damage to tyres, tubes, mudguards, lamps, bonnet side parts, painting of damaged portion (IMT-21).
(This exclusion can be covered under IMT 23 after payment of requisite premium. Only 50% is payable)

Conditions of the Policy –

 Notice of loss – Immediate written Notice to Insurance co. immediately on the occurrence of a claim.
 No admission, offer, promise or payment – Insured can not commit to any admission or settlement
without prior written consent from Ins. Co.
 Maintenance of Vehicle – Insured should take all steps to maintain vehicle in effective condition and
take proper safeguards of vehicle in case of accident.
 Cancellation of policy – In case the insured cancels his policy, premium refunded after retaining
premium on short period basis, when insurers cancel the policy premium refunded on pro-rata basis
after giving 7 day’s notice.

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  Contribution – In case of more than one insurance policy for the same liability, the insurer will
contribute a ratable proportion of any compensation, cost or expenses.
 Arbitration – In case of dispute on the quantum of claim and not on dispute of liability.
 Insurer has the option to repair or replace or pay in cash after an accident – but the loss amount cannot
exceed the I.D.V.
 In case of death of insured, the policy remains valid for 3 months from the death or until expiry of
policy, whichever happens earlier. Legal heirs to get policy t/f in their name or take a fresh policy within
this period.

GENERAL EXCLUSIONS (Applicable to all Sections)

a) any accidental loss/damage/liability caused sustained or incurred outside the geographical area
b) any claim arising out of any contractual liability
c) Use of vehicle in breach of ‘Limitation as to use’
d) In contravention of Drivers clause
e) Any Consequential Loss
f) Loss/Liability arising directly or indirectly out of War & Nuclear risk

SCOPE OF COVER FOR PRIVATE CAR INS. AND MOTORIZED TWO WHEELER INSURANCE

Private Car Type Vehicles/Motorized Two Wheelers (with or without side car) used for social, domestic &
pleasure purposes and also for professional purposes (excluding the carriage of goods other than samples) of
the insured or used by the insured's employees for such purposes but excluding use for hire or reward, racing,
pace making, reliability trial, speed testing and use for any purpose in connection with the Motor Trade.

LIMITATIONS AS TO USE - Use only for social, domestic and pleasure purposes and for the insured’s business or
profession. The Policy covers use of the vehicle for any purpose other than
a) Hire or Reward
b) Carriage of goods (other than samples or personal luggage) in connection with any trade or business
c) Organized racing
d) Pace making
e) Speed testing
f) Reliability Trials
g) Use in connection with Motor Trade

In case of vehicles used for Driving Tuition add the words “other than for the purpose of driving tuition” after
the words ‘hire or reward’.

DRIVER CLAUSE –

 Any person including the insured

 Provided that a person driving holds an effective driving license at the time of the accident and is not
disqualified from holding or obtaining such a license.
 Provided also that the person holding an effective Learner’s license may also drive the vehicle and that such
a person satisfies the requirements of Rule 3 of the Central Motor Vehicles Rules, 1989.

SCOPE OF COVER – COMMERCIAL VEHICLES

All vehicles plying for hire or reward are termed as Commercial Vehicles. The Commercial Vehicles Tariff is
applicable to all vehicles not provided for under any other section of this Tariff, excluding vehicles running on
rails.

Commercial vehicle’s Coverage – Perils, General Exceptions & Conditions are also similar to Private Car Package
Policy.

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TOWING CHARGES - If there is loss or damage covered by the policy, the insurer bears reasonable cost of
protecting the car and removing it to the nearest repairers and redelivery.

For motor cycle, scooters – Upto ` 300/-

For 3 Wheelers – Upto ` 750/-
For Private Car – Upto ` 1,500/-
For commercial vehicle – Upto ` 2,500/-

SPOT REPAIRS - Ordinary repairs arising out of loss or damage caused by insured peril can be carried out by the
insured provided the estimated cost of such repair does not exceed ` 500/- (` 150/- for Motor Cycles)

Section III: TOWING OF DISABLED VEHICLE

This is available to commercial vehicle only. This provides coverage of Section II for the mechanically disabled
Vehicle. Provided
a) Such towed vehicle should not be towed for hire or reward
b) No own damage cover is available for towed vehicle or property carried by it.

Rating factors for O.D. Premium - Private Car & Motorised 2- wheelers
a) Insured’s Declared Value
b) Cubic capacity
c) Geographical Zones
d) Age of vehicle

For Commercial Vehicles, the Rating factors are the same except that we take Gross vehicle weight (GVW) in
case of goods carrying vehicle and licensed carrying capacity in case of Passenger carrying vehicles, in place of
Cubic Capacity.

ADD ON COVERS

 In addition to standard motor policies, Add On covers provide enhanced coverage to the existing Motor
products for better protection.
 Add On covers reduce the out of pocket expenses of the Insured.
 The scope of the cover gets broaden by inclusion of these Add on covers as an endorsement to these
standard policies.
 The Add On covers are given at the request of the insured, on payment of extra premium.

Some of the Add On Covers available in the market –

NIL DEPRECIATION COVER - To cover the amount of depreciation in case of replacement of parts and painting
for a partial loss claim. This Add-on Cover is generally available for New vehicles only, at the request of the
insured.

ALTERNATE CAR BENEFIT COVER - Generally for Private Car Package Policy only as Add on cover for the
specified period opted by the insured at the time of insurance. No documentary evidence of expenses incurred
by the insured towards this benefit. The amount payable under this benefit - in addition to the OD Claim.
Benefit payable only if there is valid claim under the policy. The period for the benefit will commence after
shifting of the damaged vehicle to garage/workshop for repairs or from date of intimation to Insurer, whichever
is later and for Theft cases the benefit will be reckoned from the date of intimation to Insurer or date of FIR,
whichever is later.

RETURN TO INVOICE COVER – Cover is generally available for NEW Vehicles only. In case of Total loss, the
insurer shall pay the current invoice price of the insured vehicle. Cover is applicable only if the vehicle is
registered and is owned by the original buyer/insured of the vehicle.

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KEY COVER - Cover is generally available for NEW Vehicles only. Coverage for the loss or damage to the Keys of
the vehicle as per S.I. Mentioned in the policy

NCB PROTECTION COVER - On renewal of the Policy, the percentage of No Claims Bonus (NCB) accrued, shall be
maintained(protected) even in case of OD claim/s are made under the policy for loss or damage to the vehicle
(generally small claims), i.e. NCB is allowed at the time of renewal despite payment of claim under the policy

ENGINE SEIZURE/PROTECT COVER - Cover is generally available for High End Vehicles excluding obsolete and
imported vehicles. If the vehicle is stopped in flooded/inundated area and there is inadvertent attempt to
continue driving/starting the vehicle, there is every possibility of water ingress to internal engine parts and
consequent engine seizure. Such damages are not payable under an ordinary policy as this would be considered
as aggravation of loss. This cover will pay for the above losses (i.e. Hydrostatic Losses etc.)

Long Term Motor Insurance Policy (for Pvt. Car and Two Wheelers only) – Upto 3 years after taking approval
from IRDA

Following Class D – Misc Class of Vehicles had been reclassified and to be rated as GCCV–Goods Carrying
Commercial Vehicles (we.f. 30.03.2012) under Section 4A

• Non Agricutural Tractors used as GCCV

• Dumpers
• Milk Vans
• Oil and Petroleum Transport Vehicles.
• Refrigeration / Pre cooling Units.
• Tankers.
• Tippers
• Electric Trolleys or Tractors
• Traction Engine Tractors
• Trolleys and Goods Carrying Tractors.

Class D – Misc Class of Vehicles - Non Motor Policies

Whilst legal liability in respect of use on a road cannot be insured otherwise than under a Motor Policy
issued under this tariff, it is permissible, in the case of the following types of vehicles, to give any other
cover by means of a Non- Motor Policy.

(a) Mobile Cranes

(b) Mechanical Navies, Shovels, Grabs, Rippers and Excavators
(c) Fork lift trucks,
(d) Bull Dozers, Bull Graders,
(e) Dragline Excavators,
(f) Drilling Rigs
(g) Dumpers and Tippers
(h) Mobile Plant
(i) Site Clearing and Leveling Plant (other than vehicles designed or adapted for the carriage of goods or
materials, or Road or Footpath Rollers).
(j) Any vehicle which is used only on sites on which the Insured is carrying out work under a Building or
Civil Engineering Contract.

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Class D – Mobile Units - Risk of Overturning - IMT 47 is to be used in respect of the following mobile units :
• Mobile Cranes
• Mechanical Navies, Shovels, Grabs, Rippers and Excavators
• Dragline Excavators
• Mobile Drilling Rigs
• Mobile Plant

Package policies for above units can be extended to cover damage to the unit by overturning during operational
use as a tool of trade at an additional premium of 0.5% of IDV.

MOTOR TRADE POLICES - TAKEN BY THE MOTOR DEALERS/DISTRIBUTORS

There are 3 types of Motor Trade Policies

1. MOTOR TRADE TRANSIT RISK (CLASS E)

• Covers the risk while the vehicle is in transit from the Manufacturer’s warehouse to the Dealer’s Show
Room. This risk is for the vehicle running with their own power.
• Premium is chargeable on the basis of distance to be covered.
• In Motor policies damage to Tyres is payable for 50% only as these are items of limited life as per usage.
But in case of Motor Trade Policies since the vehicles are new and all the tyres are new, the cover can
be extended to pay 100% claim on Tyres & Tubes by payment Additional premium for deletion of 50%
Limitation Clause in respect of damage to tyres.

2. MOTOR TRADE ROAD RISK (CLASS F)

• This policy is issued to Motor Dealers on following basis
– Named Driver basis
– Trade Certificate basis
• Risk covered is identical as in Com. Vehicle Package Policy, while vehicle is in the public place or
temporarily garaged during the course of a journey elsewhere than in or on any premises owned by or
in the occupation of the insured. This policy can be extended by payment of additional premium to
cover the risk while the vehicle is being used for the purpose of demonstration or tuition by other
person provided he is driving with the insured’s permission and is accompanied by a Driver as named
above.
• Towing Charges – Rs. 150/- any one accident
• Premium is charged on the basis of number of Drivers or Number of Trade Certificates.

3. MOTOR TRADE - INTERNAL RISKS ONLY(CLASS G)

• This policy covers the risk of loss or damage or liability arising out of accidental external and visible
means, while the vehicles are kept in or on premises of the insured (Motor Dealer) or in his occupation.
• Insurer’s Liability – Max. 50,000/-any one accident.
• Excess – Rs.50/- for two wheelers and Rs.500/- for others
• Premium rates are chargeable on the basis of area occupied by Dealer and a percentage premium on
the wages paid to the employees.

Motor Insurance accounts for a major portion of the Misc. Premium income of Insurance Companies.

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In all there are 49 General Regulations. These contain guidelines on underwriting etc of motor insurance.
GR NO. DESCRIPTION SEC/IMT
1. Insurance not Motor Insurance in India cannot be transacted outside the purview of the India
provided for Motor Tariff
2. Proposal Written Proposal form to be submitted by the insured for new insurance & at Sec. 5
Forms renewal in case of material alteration except in change in IDV at renewals.
Fresh proposal from insured required for change in insurer. Written proposal
is also a must as per ‘Protection of Policyholders’ Interests Regulation of IRDA.
3. Policy Forms Policies to be issued only as per Standard Forms given in Tariff. Sec. 6
3A. Types of Two types of policies:-
Policies i. LIABILITY ONLY POLICY (T.P. POLICY)
Compulsory Cover for all classes of vehicles to cover third party liability for
bodily injury and/or death and property damage.
PA cover for owner/driver is also included and made compulsory.
ii. PACKAGE POLICY (COMPREHENSIVE)
Provides wider cover ‘Own damage’ and Act Liability. This covers
loss/damage (O.D.) to the vehicle in addition to (i) above
Imp.: Restricting the scope of cover for loss/damage to vehicle under Package
Policy-without any reduction in Tariff rates is permitted. No other alteration,
change, extension allowed without TAC approval.
3B. Rating Rates are minimum.
LOADING: For adverse claims experience of the vehicle & individual risk
perception: loading by 100%. Further loading of 100% also permitted if
experience still adverse. (Maximum loading allowed: 100%+100%)
4. Extension of Geographical area is India, but can be extended by charging extra premium to IMT 1
Geographical include Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka and Maldives at flat
Area. rate-
~ Package Policy…..` 500 per vehicle irrespective of class of vehicle.
~ Other Policies…….` 100 per vehicle irrespective of class of vehicle.
Exclusions: Cover for damage to vehicle/injury to its occupants/TP liability for
vehicle during air passage/sea voyage for the purpose of ferrying vehicle to
extended geographical area.
5. Vintage Cars Cars manufactured prior to 31.12.1940 and duly certified by the Vintage and IMT 2
Classic Car Club of India - 25% Discount on OD Premium and 50% Discount on
TP Premium
6.Classic Cars Manufactured after 31.12.1940 but before 31.12.1970 is considered as a
Classic Car Club of India. No special rating or cover available.
7.Valued Not permitted in motor insurance except for Vintage Car as per GR 5. IMT 2
Policies
8.Insured’s IDV of the vehicle deemed to be ‘SUM INSURED’ and fixed on manufacturer’s
Declared Value listed selling price of the brand and model of vehicle at commencement at
(IDV) each policy period for each insured vehicle and adjusted for depreciation (as
per schedule specified below). The IDV of accessories also to be fixed.
SCHEDULE OF DEPRECIATION(other than for Motor Trade Policies) given in a
separate table
IMPORTANT NOTES: 1. For vehicles beyond 5 years & obsolete models: IDV to
be determined on the basis of an understanding between insurer & insured.
2. IDV applicable for Total Loss (TL)/Constructive Total Loss (CTL) claims only.
3. CTL if aggregate cost of retrieval &/or repair exceeds 75 % of IDV.
4. IDV will not change during policy period for TL/CTL claim settlement.
Insurer’s liability in any case not to exceed IDV less value of wreck in “as is
where is” condition.
No depreciation on brand new vehicles covered under Motor Trade Policies.

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9. Dep. on Parts For all categories of vehicles & accessories given in a separate table
for Partial Loss
10. Rating-depends upon the location of office of registration of vehicle:-
Geographical (i) Pvt. cars/Motorised Two Wheelers/Commercial vehicles ratable under
Zones Section 4.C.1 & C.4.-
Zone A: Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai,
New Delhi, Pune.
Zone B: Rest of India.
(ii) Commercial vehicles excluding vehicles ratable under Section 4.C.1 & 4.C.-
Zone A: Chennai, Delhi/New Delhi, Kolkata, Mumbai.
Zone B: All other State capitals.
Zone C: Rest of India.
11. Period of Twelve months. No policy for more than 12 months. For shorter duration for
Insurance arriving at a particular renewal date/other convenient reason on pro rata basis-
subject to certain conditions & with a warranty.
12. Premium Short period cover/renewal for less than 12 months on following rates: 20% of
Rates for Short annual premium upto 1 month & finally full premium above 8 months. (Table
Period Cover not reproduced here).
NOTES: 1. Extensions only by charging premium on short period rates.
2. Short period covers/renewals not permissible for Liability Only Policies.
13. Display of Package Policy: OD & Liability components to be displayed separately in policy
Premium schedule. Loadings/Discounts: To be displayed separately. Rounding Off: OD
& Liability premiums to be rounded off to nearest rupee, separately.
14.Computation Premium, discounts, loadings etc to be calculated as per Tariff.
of Premium
15. Payment of Full premium to be collected before commencement of cover. Installments not
Premium permitted
16. Minimum ` 25 per vehicle: For vehicles specifically designed/modified for use of blind,
Premium handicapped, mentally challenged people.
` 100 per vehicle: all other vehicles.
17. Transfers  On transfer of ownership, the Liability Only cover, either under a Liability IMT 3
Only policy or under a Package policy is deemed to have been transferred in
favour of transferee with effect from the date of transfer.
 The transferee shall apply within fourteen days from the date of transfer in
writing under recorded delivery to the insurer, with details of vehicle,
transfer date, previous owner of the vehicle and the number and date of the
insurance policy to enable the insurer to make necessary changes & issue
fresh Certificate of Insurance.
 Transfer of “Own Damage” section of the policy in favour of the transferee,
to be made only on receipt of a specific request from the transferee along
with consent of the transferor.
 Recovery of NCB from transferee to be made as per transferee’s entitlement
before effecting the transfer.
 Fresh Proposal Form duly completed to be obtained from the transferee in
respect of both Liability Only and Package Policies
 Transfer of Package Policy in the name of the transferee can be done only
on getting acceptable evidence of sale and a fresh proposal form duly filled
and signed. The old Certificate of Insurance for the vehicle, is required to be
surrendered and a fee of ` 50/- is to be collected for issue of fresh
Certificate in the name of the transferee.
18. Change of Vehicle insured under a policy can be substituted by another vehicle of the IMT 4
Vehicle same class for the balance period of policy subject to adjustment of premium,
if any, on pro-rata basis from the date of substitution

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19,20,21. Policies & Certificates to be issued in the name of:-
Vehicles Subject 1. Hire purchase agreement: Hirer only-Owner’s interest can be protected by IMT 5
to Hire endorsement.
Purchase/ 2. Lease agreement: Lessee only-Lessor’s interest can be protected by endtt. IMT 6
Lease/ 3. Hypothecation agreement: Registered owner only-Pledgee’s interest can be
Hypothecation protected by endorsement. IMT 7
Agreements For PA to cover in all above cases: owner-driver will continue to be deemed as
owner-driver.
22. Cover Note To be issued only in Form 52 of Rule 142(1) of Central Motor Vehicle Rules SEC. 6
1989. As per Rule 142(1) covernote valid for 60 days & insurer shall issue a
policy before expiry date.
23. Certificate To be issued only in Form 51 of Rule 141 of Central Motor Vehicles Rules 1989. SEC. 6
of Insurance
24.Cancellation  Cancellation of Policy by sending 7 days notice of cancellation by recorded
of Insurance & delivery to the insured’s last known address and refund of pro-rata
Double premium for balance policy period.
Insurance  Cancellation of Policy at the request of the insured after retention of
premium on short period scale of rates, for period for which cover was in
existence. Refund of premium subject to there being no claim under the
policy and retention of minimum premium as specified in the Tariff.
 Cancellation of Policy only after ensuring insurance of vehicle elsewhere, at
least for Liability Only cover and after surrender of the original Certificate of
Insurance for cancellation. Regional Transport Authority (RTA) concerned
to be informed by recorded delivery about such cancellation of insurance
 Double Insurance – In case of two policies on the same vehicle with
identical cover, Policy commencing later is to be cancelled. In case of
double insurance with same insurer, 100% refund of premium. In case of
double insurance by two different insurers, the policy commencing later to
be cancelled on pro-rata refund of premium.
 If however, due to requirements of Banks/Financial Institutions, intimated
to the insurer in writing, the earlier dated policy is required to be cancelled,
then refund of premium is to be allowed after retaining premium at short
period scale for the period the policy was in force prior to cancellation.
 In either case, no refund of premium can be allowed for such cancellation if
any claim has arisen on either of the policies during the period when both
policies were in operation, but prior to cancellation of one of the policies.
In all cases: Minimum premium as per Tariff to be retained
25. Cancellation For any changes in policy during its currency: certificate of insurance to be
and issuance of surrendered.
Fresh Certificate Information about change in engine/chassis nos. to be intimated to insurer
of Insurance immediately with RTO’s endorsement.
` 50 for each issuance of fresh Certificate of Insurance.
26. Certificate Fresh certificate/covernote to be issued where Insured-declares with full
or covernote particulars of circumstances for loss/destruction & efforts made to find; or
destroyed, torn, returns such torn, soiled, mutilated or defaced certificate or covernote.
soiled, defaced To be marked duplicate. Original to be returned to insurer if found later by
or mutilated insured.
27. No Claim  NCB only on OD section except on - Trade Policies, Road Transit Risks, Road
Bonus Risks, Internal Risks, Only Fire &/or Theft Risks
 For Liability + Fire &/or Theft Risks: only on Fire &/or Theft portions.
 Entitlement only after expiry of full duration of 12 months.
 Discount on premium, uniform for all types of vehicles, ranges from
minimum 20% to maximum 50%, corresponding with 1 to 5 consecutive
claim free years.

11
  Sunset Clause: NCB earned 30th June 2003 protected for all subsequent
renewals till a claim arises under the policy, in which case the NCB will
revert to ‘Nil’. Subsequent NCB as per above table.
 NCB to compute on OD premium after deducting rebate for Vehicle Laid Up.
 Entitlement of NCB to the original insured and not the vehicle or the policy.
NCB applicable for the substituted vehicle subject to that the substituted
vehicle on which the entitled NCB is to be applied is of the same class.
 NCB earned on vehicle owned by an institution, allotted to and used by an
employee is passed on to the employee if ownership of the vehicle is
transferred in the name of the employee on submission of a suitable letter
from the employer confirming that prior to transfer of ownership of the
vehicle to the employee, it was allotted to and exclusively operated by the
employee during the period in which the NCB was earned.
 In case of transfer of insurance from one insurer to another insurer, the
transferee insurer may allow the eligible NCB on submission of Evidence
NCB entitlement- renewal notice or letter confirming the NCB entitlement
from the previous insurer.
 In case of absence of such evidence of NCB entitlement, the claimed NCB
permitted after obtaining from the insured a suitable declaration as per the
following wording:
“I / We declare that the rate of NCB claimed by me/us is correct and that no claim
as arisen in the expiring policy period (copy of the policy enclosed). I/We further
undertake that if this declaration is found to be incorrect, all benefits under the
policy in respect of Section I of the Policy will stand forfeited.”
 On receipt of declaration, Insurer obliged to write to policy issuing office of
previous insurer within 21 days by recorded delivery calling for confirmation
of entitlement and the previous insurer is obliged to provide the
information sought within 30 days of receipt of the letter of enquiry failing
which the matter will be treated as a breach of Tariff on the part of the
previous insurer. Failure of the insurer granting the NCB to write within 21
days after granting the cover will also constitute a breach of the Tariff.
 In case of sale of insured vehicle not replaced immediately, NCB certificate
valid for 3 years
 No NCB can be allowed when a policy is not renewed within 90 days of its
expiry. For military/para military personnel in forward areas, renewal upto
365 days-on individual basis-with a declaration in writing that the vehicle
was not in use during the interim period.
 In case of death of an individual insured, NCB entitlement of the original
insured will pass on to such person/s to whom the custody and use of the
vehicle pass.
 NOT ON MOTOR TRADE POLICIES.
 NCB earned abroad: can be allowed within 3 years.
 NCB only if vehicle insured continuously for 12 months without break.
28. Automobile 5% of OD premium on new insurance/renewal of Package Policy only. IMT 8
Association Maximum ` 200 for car & ` 50 for two wheeler. Discount only on Package
Membership Policy to individuals, joint owners of companies who are members. Hire
Discount purchaser etc. also eligible. If membership obtained during policy currency:
allow pro-rata discount. Similarly if membership cancelled during policy
currency-recover pro-rata discount.
29. Discount for 25% on OD premium and 50% on TP Premium. Pro-rata for mid-term IMT 9
Vintage Cars certification.
30. Discount for 2.5% on OD premium (maximum ` 500). Anti-theft devices approved by IMT 10
Anti-Theft Automobile Research Association of India (ARAI), Pune & installation in vehicle
Devices certified by any Automobile Association. On pro-rata basis for mid-term basis.

12
31. Concession Vehicles laid-up in garage & not in use for not less than 2 consecutive months:- IMT 11
for Laid-up I. Liability Only Policy: at insured’s option-(a) pro-rata return on net
Vehicles premium-to be adjusted at renewal. No cash refund; or (b) policy period
extension at renewal.
II. Package Policy: Liability restricted to Fire &/or Theft. At insured’s option:
(a) return pro-rata premium & charge pro-rata premium for Fire/Theft
risk/s. Calculation on net premium. To be adjusted at renewal. No cash
refund; or (b) policy period extension at renewal.
I & II subject to: (i) vehicle not under repairs as a result of claim under policy;
(ii) previous written notice from insured; (iii) certificate of insurance returned
to insurer; (iv) period not to extend beyond 12 months from the policy expiry
date. Rs.15 to be charged as admn. Charges.
No premium return for lay-up of trailers, vehicles used for hire & reward or for
Motor Trade purpose.
32. Prohibition Not permitted more than once during currency of a policy.
of Mid term
inclusion/
cancellation of
extra benefits.
33. Concession In case of vehicles specially designed/modified for use of blind, handicapped IMT 12
for specially and mentally challenged persons, a discount of 50% may be allowed on the OD
designed/ premium in respect of both privately owned vehicles and vehicles owned and
modified used by institutions engaged exclusively in the services of the blind,
vehicles for handicapped and mentally challenged persons. The discount is to be allowed
blind, only for vehicles suitably endorsed in RC by the RTA concerned.
handicapped &
mentally
challenged
persons.
34. Registration, It is not permissible to insure any vehicle in the name of an insured not
use & Insurance conforming to the name recorded as owner of the vehicle in the vehicle
registration document, excepting
i) in case of temporary substitution,
ii) in respect of Motor Trade Risk, or
iii) as provided in General Regulation 19, 20 and 21
It is not permissible to insure any vehicle for use for a purpose other than that
permitted by the RTA concerned
GR.35. Use of (i) Use confined to own premises (applicable to all classes except as otherwise
Vehicles within provided in the Tariff) - Where a vehicle is to be used in the insured's own
Insured’s premises to which the public have no general right of access and provided
Premises/Sites the vehicle is not licensed by the authorities concerned for general road
use, a policy may be issued at the applicable Tariff rate with a discount of
33 1/3%.
No Certificate of Insurance or Cover Note which includes a Certification is IMT 13
permitted to be issued in such cases.
(ii) Use confined to Sites (Applicable to Goods Carrying Vehicles) - Where a
vehicle is to be used only on a site or sites to which the public has no
general right of access and the vehicle is not required to be registered
under the Motor Vehicles Act, a policy may be issued at the applicable
Tariff rate with a discount of 33 1/3%.
No Certificate of Insurance or Cover Note which includes a Certification is
IMT 14
permitted to be issued in such cases.

13
36. Personal Compulsory Personal Accident Cover for Owner-Driver – S.I. – Rs. 15 Lacs
Accident (PA)
 Applicable under both Liability Only and Package policies.
Cover under
Motor Policy  The registered owner of individual insured vehicle holding an ‘effective’
driving license is termed as Owner-Driver for the purposes of this section.
 Coverage to the Owner-Driver whilst driving the vehicle including mounting
into/dismounting from or traveling in insured vehicle as a co-driver.
 PA cover cannot be granted where a vehicle is owned by a company, a
partnership firm or a similar body corporate or where the owner-driver
does not hold an effective driving license.
 Where the owner does not have an effective D/L. Premium not to be
charged & delete provision.
 Not mandatory to buy PA cover bundled with Motor Cover w.e.f. 01.01.19
 If insured has more than one vehicle-Insured can take a Standalone CPA
cover of S.I.-Rs. 15 Lacs, valid for all the vehicles.
 If Insured has a PA Policy covering Death & Permanent Disability with S.I. of
at least Rs.15 Lakh, they need not take separate CPA cover, neither with
Motor Policy nor as standalone.
Optional Personal Accident Cover for persons other than Owner-Driver
 Limited to maximum Capital Sum Insured (CSI) of Rs. 2 lacs. per person.
 Cover is available only in respect of the following persons:-
o Private Cars and motorized two wheelers with or without side car (not
for hire or reward): For insured or any named person other than the
paid driver and cleaner.
o Private Cars, three wheelers rated as Private cars and Motorized Two
Wheelers (not used for hire or reward) with or without side car: For
unnamed passengers limited to the registered carrying capacity of the
vehicle other than the insured, his paid driver and cleaner.
o Motorized Two Wheelers with or without side car (used for hire or
reward): For unnamed hirer/ driver.
o All classes of vehicles: Paid driver, cleaner & conductor
37. Cover for Vehicles of embassies, consulates etc. where import duty element is not IMT 19
vehicles included in IDV: Load OD premium by 30%.
imported
without
customs duty.
38. Vehicles Automatically held covered during requisition period without any additional
requisitioned by premium. Loss/ claim payable by insurer in excess of amount paid by
Government government.
39. Third Party A. Limits for TPPD for other than goods carried in insured vehicle : IMT 20
Property ` 1 lakh for private & commercial 2 wheelers;
Damage Cover ` 7.50 lakhs for all other commercial vehicles, 3 wheelers, taxis, private cars
B. However, the insured can at the inception of the policy, opt to restrict to the
TPPD cover to the statutory limit as provided in the M. V. Act.
Mid-term term change of TPPD not permitted.
40. Compulsory Deductible from claims under OD section provided for all classes of vehicles,
Deductibles viz. 2 wheelers, 3 wheelers, Pvt. cars, taxis, commercial vehicles of all classes.
Also applicable where restricted covers as per GR 45 A/B granted {Fire &/or
Theft Risks}. Further loss/ damage to lamp, tyre, mudguards & /or bonnet side
parts, bumpers and / or paintwork is not payable in case of commercial
vehicles, except in case of total loss.

14
41. Electrical/ Fitted but not included in manufacturer’s selling price: Premium @ 4 % of IMT 24
Electronic value of such fittings; specifically to be declared by insured; for OD section.
Fittings
42. Use of CNG/  In case of vehicles fitted with bi-fuel system such as Petrol/Diesel and CNG IMT 25
LPG fuel /LPG, permitted by the concerned RTA, the CNG/LPG kit fitted to the vehicle
is to be insured separately at an additional premium @ 4% on the value of
such kit to be specifically declared by the insured in the proposal form
and/or in a letter forming part of the proposal form. Kit fitted during the
currency of policy, charge pro-rata premium
 Where the vehicle is fitted with only CNG/ LPG engine or where the vehicle
is fitted with bi-fuel system referred above as approved by RTA but the
value of CNG / LPG kit is not separately available-5% extra on OD premium.
 An additional premium of Rs. 60/- per vehicle to be charged towards
Liability Only cover on account of CNG/ LPG system.
43. Fibre glass ` 100 extra for OD section for Class D commercial vehicles;
fuel tanks ` 50 extra for all other vehicles.
44. Vehicles Vehicles used by Driving Schools recognised by RTA for giving tuition, with
used for Driving double clutches & brakes, with professional tutor: OD premium+ 60% extra; TP
Tuitions premium as per Tariff.
For 3 wheelers & 2 wheelers: 60% extra on both OD & TP premium.
45A. Restricted Only when vehicle in garage & not in use: Written declaration from insured.
Cover for Fire Cover for Fire &/or Theft- without Liability Only cover: Fire or Theft only: 0.50%
&/ or Theft of IDV; Fire+Theft: 0.75% of IDV.
Risks NOTES: Prohibited for all vehicles under Class D (Misc & Spl. Type);
Class E,F & G(Motor Trade Risks).
45B. Restricted Restricted Liability Only + Fire &/or Theft Risks, subject to minimum premium IMT 27
Cover for Liabi- as per GR 16.
lity Only & Fire NOTES: Prohibited for Class D(Misc & Spl. Type) vehicles.
&/or Theft Risks
46. Vehicles Pvt. cars, taxis & 2 wheelers running on battery, as approved by RTA-
driven by non- Pvt. Cars/Taxis: Rate as Pvt. Cars/Taxis upto 1000cc (Refer to respective tariff);
conventional Motorised 2 wheelers: Rate as motorised 2 wheelers with capacity exceeding
source of power 150cc but not exceeding 350cc (refer to respective tariff).
For vehicles driven solely by any other non-conventional source of power
approved by RTA-refer to TAC.
47. Towing In addition to limit already provided under the standard Package policies,
charges for higher towing charges can be opted, subject to charging extra premium, e.g.
vehicles which
have met with Pvt. Car – Upto ` 1500/- Prem. @ 5% of Amount Opted
an accident 2 Wheeler - Upto ` 300/- Prem. @ 5% of Amount Opted
48. Submission Extensive codes provided in Section 8 of Tariff. Imperative upon insurers to
of Statistics submit data to TAC as per Section 64 UE of Insurance Act.
49. Interpre- TAC’s clarifications & interpretations are final & binding.
tation of India
Motor tariff
Certificate of insurance - It is needed to comply with compulsory Third Party Insurance. It is issued by
authorized insurer only.

15
Dep. on Parts for Partial Loss Claim Compulsory Deductibles

Rubber nylon/plastic 50% TYPE OF VEHICLES Comp.

parts, tyres/ tubes, Excess
batteries and air bags, AMT.
Painting Material
Fabre glass components 30% Goods carrying Passenger carry `
Glass Parts Nil Commercial Vehicles < 7500 Kg.GVW < 17 passengers 500/-
(other than vehicles > 7500 Kg.GVW & > 17< 36 1000/-
rateable under Class-D,E,F < 16500 Kg. GVW passengers
Other parts incldg. Wooden
and G of CVT)
parts, Metal Parts etc. > 16500 Kg. GVW > 36 passengers 1500/-
AGE OF THE VEHICLE DEP. Vehicles rateable under Class D of the 0.5% of IDV of Vehicle,
Commercial Vehicles Tariff (CVT) Subject to Min. ` 2000/-
< 6 months Nil Vehicles rateable under Class E, F and G of the ` 100/- for two-wheelers &
Commercial Vehicles Tariff (CVT) ` 500/- for other vehicles
> 6 months but < 1 year 5% Taxis and 3 Wheelers rated as Commercial Vehicles (< 1500cc) 500/-
> 1 year but < 2 years 10% Taxis and 3 Wheelers rated as Commercial Vehicles (> 1500 cc) 1000/-
> 2 years but < 3 years 15% Private Cars incldg. 3 wheelers rated as Private Cars(<1500cc) 1000/-
> 3 years but < 4 years 25% Private Cars incldg. 3 wheelers rated as Private Cars (> 1500 cc) 2000/-
> 4 years but < 5 years 35% Motorized Two Wheelers. 100/-
> 5 years but < 10 years 40%
> 10 years 50% PREMIUM FOR LIABILITY ONLY COVER AMOUNT IN (`)-w.e.f. 16.06.2019
4 Wheeler
Cubic Capacity of vehicle Premium TP Rates for Min.
DEP. FOR ARRIVING AT IDV 3 Yrs Long Term Value
Other than for Motor Trade Policies Not exceeding 1000 cc 2072 5286 15000
AGE OF THE VEHICLE DEP. > 1000cc but < 1500 cc 3221 9534 20000
< 6 months 5% Exceeding 1500 cc 7890 24305 30000
> 6 months but < 1 year 15% 2 Wheeler 5 Yrs Long Term
> 1 year but < 2 years 20% < 75 cc 482 1045 5000
> 2 years but < 3 years 30% > 75 cc < 150 cc 752 3285 5000
> 3 years but < 4 years 40% >150 cc < 350 cc 1193 5453 6000
> 4 years but < 5 years 50% > 350 cc 2323 13034 7000

No Claim Bonus PREMIUM RATE

All types of Vehicles NCB Risk Covered Premium
After one complete year 20% Liability Only with Fire Liability Only Premium + 25% of OD Premium
After 2 completed years 25% Liability Only & Theft Liability Only Premium + 30% of OD Premium
After 3 completed years 35% Liability & Fire & Theft Liability Only Premium + 50% of OD Premium
After 4 completed years 45%
After 5 completed years 50% SCHEDULE OF SURVEY FEES - AMOUNT IN (`)
ESTIMATE OF REPAIRS REVISED FEES
OUTSTATION SURVEY (SPOT/FINAL/ UPTO RS. 20,000/- 850/-
RE-INSPECTION) INVOLVING 20000/- TO 50,000/- 1200/-
OVERNIGHT STAY AWAY FROM THE 50000/- TO 100000/- 1500/-
NORMAL PLACE OF WORK
Fees calculated at 150% of amt. 100000/- TO 200000/- 2300/-
determined as per scale given above 200000/- AND ABOVE 2300 + 0.7% on Bal. above Rs. 200000/-
will be payable. subject to Maximum Fee 12000/- in all
INVESTIGATION FOR OD CLAIMS Photographs @ ` 10/- each, subject to Maximum of ` 200/-
` 2000/- + Conveyance/TA/DA etc. DAILY HALTING ALLOWANCE FEE FOR VALUATION OF VEHICLES
CLASS OF CITY REVISED FEES 2 / 3 Wheeler 750/-
RE-INSPECTION/SPOT SURVEY FEES A CLASS CITIES 600/- Pvt. Car/Taxies 1000/-
UPTO 80 KMS. 850/- B CLASS CITIES 500/- Others 1500/-
ABOVE 80 KMS. 1200/- C CLASS CITIES 400/-

16
Basis of Settlement –

 Repair of Vehicle – Where the insured has to incur the expenditure in order to repair the parts of the
vehicle damaged in an accident, the insurance company pays for such expenses plus towing charges for
the damaged vehicle, subject to maximum of IDV of the vehicle. The insured has to bear a portion of
the repair cost for depreciation which is based on the age of the vehicle.

 Total Loss - Where the vehicle is totally damaged or when the net cost of repairs is almost close to IDV,
the claim can be considered to be a total loss. In total loss, in case the vehicle is Total Loss then the
insured is paid the full IDV less applicable deductibles as per the Policy and he has to get the vehicle
salvage/wreck shifted to the insurer’s desired premises and has to transfer the ownership rights in
favour of the insurers or has to get the registration of the vehicle cancelled from the registration
authority ( RTO) as directed by the insurers.

 Constructive Total Loss - When the cost of retrieval is very high – 75% or more – but is not a
total loss otherwise, it’s termed as Constructive Total Loss, as it is practically not feasible/
advisable to go for retrieval. Constructive Total Loss mode is generally adopted when the IDV of
the vehicle is less than its market value and liability of insurers on total loss basis is in interest of
insurers. In such cases, if IDV less salvage value is lower than the repair liability such mode may
be adopted.

 Cash Loss - Net of Salvage - In this case in event of major loss the settlement is made on total
loss basis and salvage is also retained by the insured. Thereby the insurers pay the customer the
IDV value less salvage value of the vehicle and any other additional deductions as per the policy.
Thereafter, the insured is free to either repair or dispose of the vehicle and does not have to
submit the bills of repairs or transfer the ownership rights to the insurers. In this mode the
settlement is done prior to vehicle being repaired and the insured after settlement may get the
same repaired in any manner and at any workshop and does not have to prove that that the
vehicle is repaired and does not have to submit the bills of repairs. Such mode is opted mostly in
case where insured claims as per authorised workshop estimates and after settlement on cash
loss basis may get the repairs carried out at some local workshops with used parts and depends
on the financial status of the insured.

 Total Loss due to Theft - Unless the claims settling authority is fully satisfied investigation of the
theft is to be arranged by an investigator who may be appointed with specific terms of
reference.

 Partial Loss due to Theft – Theft of parts/accessories from a vehicle should be reported to the
police immediately by the insured. If parts are found missing or changed after recovery of stolen
vehicle this be recorded in panchnama/recovery memo. Final police Investigation report will also
be required. However, if the competent authority is satisfied about the genuieness of the loss,
final investigation report may be waived provided the insured sends a registered A/D letter to
the SP/ACP requesting that the Insurer should be informed of any recovery.

Knock to Knock Agreement – Each insurer to pay for damages to its own Policy Holder vehicle, if such damages
are insured, irrespective of responsibility. Avoids Litigation.

Claim documents for Accidental claim ( All type of vehicles ) -

1. Claim Intimation Letter and Claim Form
2. Copy of Repair Estimate
3. Registration Certificate of the Vehicle
4. Driving Licence of the driver on the wheels at the time of accident
5. Surveyor’s Assessment Report

17
 6. Repair Bills and Payment Receipts
7. Discharge Voucher
Additional documents for Commercial Vehicles –
8. Fitness Certificate
9. Permit and Authorisation
10. Taxation Book
11. Load Challan / Trip Sheet
12. Spot Survey Report
Claim documents for Vehicle Theft claim (All type of vehicles ) -
1. Claim Intimation Letter and Claim Form
2. F.I.R.
3. Final Report (Court Accepted copy)
4. Investigator’s Report
5. Letter of Subrogation
6. Transfer of Registration Certificate of the Vehicle in the name of the co.

IRDA Regulations on Claims Settlement:

 Surveyor deputation within 72 hours. Insured to be informed about the details of surveyor appointed.
 Insurer/Surveyor to write to claimant for documents in support of the claim within 7 days of claim
intimation. Documents available on Public Domain have to be collected from there.
 Surveyor to start the survey immediately, not later than 48 hours. He has to submit his Interim report
within 15 days of his first visit which has to be shared with the claimant, if he so desires.
 In case of non cooperation or non submission of required documents
 Survey report within 30 days, to be shared with the claimant, if he so desires.
 In case commercial vehicle and large risks claims, the surveyor shall submit the final report within 90
days of his appointment.
 In special circumstances, the surveyor shall seek an extension from insurer for submission of his report
and in such an event, the insurer shall give the status to the insured/claimant fortnightly wherever
warranted.
 Insurer to seek clarification within 15 days and only once
 Additional report within 3 weeks
 Claim to be settled/rejected within 30 days
 Information to insured about the basis of settlement in case the amount admitted is less than the
amount claimed or rejection quoting the specific terms and conditions of the policyn case
 Delayed payments attract interest @ 2% above bank rates from the date of receipt of last relevant and
necessary document from the insured/claimant by insurer till the date of actual payment.
 It is the duty of the insurer to furnish to the insured, free of charge, within 30 days of the acceptance of
a proposal, a copy of the proposal submitted by the Insured.

18
MOTOR THIRD PARTY

In India Motor vehicle Act was first enacted in 1939 effective from 01.07.1939, making Third Party insurance
compulsory. It also provided for licensing of drivers of motor vehicle, regulation of vehicles, control of traffic
etc. As per the recommendations of a committee of experts appointed in 1985 by GIC, the Motor Vehicle Act
was amended in 1988 which came into force w.e.f. 01.07.1989. The Act was again amended in 1994 to
cover/protect the losses due to Hazardous goods and Sec. 163A & 163B were added for Structured Formula
Compensation, and last amendment made in 2001. The Act has again been amended in 2019 which came into
force w.e.f. 09.08.2019. It has jurisdiction of All Over India. The Motor Vehicle Act consists of fourteen
chapters. However, Chapter XI - Sections 145 to 164 (TP Ins.) and Chapter XII - Sections 165 to 176 (Claims
Tribunal) deal with Mandatory third party insurance of motor vehicles.

Sec. 2 Definition of various types of vehicles

Sec. 3 Necessity for D.L. - No person shall be allowed to drive a vehicle without valid driving licence.
Sec. 4 Age limit for holding D.L.
Sec. 5 Responsibility of owner for contravention of Sec. 3 & 4
Sec. 6 Restriction on holding of more than one DL
Sec. 7 Learner Licence – Transport Vehicle unless has DL for LMV for one year and age of 18 years. A person
below 18 will not be granted learner's licence unless consented by the guardian
Sec. 8 Apply to RTO where the person resides
Sec. 9 RTO under whose jurisdiction person stays
Sec.11 Addition of other classes of vehicles
Sec.13 Jurisdiction of learner license throughout country
Sec.14 Currency of license
Sec.15 Grace Period – 1 year
Sec.16 RTO can revoke DL on medical/disease grounds
Sec.17 Orders refusing for revoking driving licenses and appeals within 30 days
Sec.18 Driving licenses to drive motor vehicles, belonging to the Central Government.
Sec.19 Power of licensing authority to disqualify from holding a driving licence or revoke such licence –
Where a licence is sent to the licensing authority under sub section (4) of Section 206, The authority
after satisfying itself, can make an order disqualifying such person from holding or obtaining any licence
to drive all or any class or description of vehicles specified in the licence –
(a) For a first offence, for a period of 3 months.
(b) For a second or subsequent offence, with revocation of the driving licence of such person
Sec.20 Power of court to disqualify. (Where a person is convicted of an offence under this Act)
Sec.21 Suspension of driving licence in certain cases like u/s sec. 184 dangerous driving
Sec. 22 Suspension or cancellation of driving licence on conviction
Sec. 27 Power of Central Government to make rules
Sec. 28 Power of State Government to make rules

CHAPTER-III LICENSING OF CONDUCTORS OF STAGE CARRIERS

Sec.29 Necessity for conductor’s licence
Sec.30 Grant of conductor’s licence-18 yrs, 8th pass, medically fit
Sec.31 Disqualifications for the grant of conductor’s licence

CHAPTER-IV REGISTRATION OF MOTOR VEHCILES

Sec.39 Necessity for registration before bringing the vehicle to any public place
Sec.40 Registration, where to be made
Sec.42 Special provision for registration of motor vehicles of diplomatic officers
Sec.43 Temporary registration – Upon receipt of application from the owner of a motor vehicle, the State
Govt. may register such vehicle to ply temporarily within the State and issue a Certificate of Registration
and registration mark for a period of one month.
Sec.44 Production of vehicle at the time of registration – A Motor vehicle sold by an authorized dealer shall
not require production before a registering authority for the purposes of registration for the first time.
The registered owner of the vehicle need not require to produce the vehicle before a RTO.
19
Sec.47 Assignment of new registration mark on removal to another State - When a motor vehicle registered
in one State has been kept in another State, for a period exceeding twelve months
Sec.50 Transfer of ownership – The transferor shall report the fact of transfer to RTO within 14 Days for
vehicle registered within the same State and 45 days if outside the State. The transferee shall report
the transfer to the concerned RTO within 30 Days and get the ownership transferred in his/her name.
(2) Where— (a) the person in whose name a motor vehicle stands registered dies, or (b) a motor vehicle
has been purchased or acquired at a public auction conducted by, or on behalf of, Government. the
person succeeding to the possession of the vehicle or, as the case may be, who has purchased or
acquired the motor vehicle, shall make an application for the purpose of transferring the ownership of
the vehicle in his name, to the registering authority in whose jurisdiction he has the residence or place
of business where the vehicle is normally kept, as the case may be, in such manner, accompanied with
such fee, and within such period as may be prescribed by the Central Government.
Sec.52 Alteration in motor vehicle—No owner shall so alter the vehicle that the particulars contained in the
certificate of registration are at variance with those originally specified by the manufacturer. In case
the owner makes some modifications, e.g. change of fuel etc. as per the prescribed guidelines of Central
Govt., the warranty granted by the manufacturer shall not be considered as void.
On receiving the directions of Central Govt. a manufacturer shall alter or retrofit equipment as specified
by the Central Govt.
Sec.53 Suspension of registration— if not road worthy
Sec.54 Cancellation of registration suspended under Section 53—When the suspension of registration of a
vehicle under Section 53 has continued without interruption for a period of not less than six months,
Sec.55 Cancellation of registration—If a motor vehicle has been destroyed or has been rendered permanently
incapable of use, the owner shall, within fourteen days, report the fact to the concerned RTO alongwith
the RC of the vehicle which shall cancel the Certificate of Registration (RC).
The Registering Authority shall cancel the RC if it is satisfied that the vehicle has been permanently
removed out of India or the registration of the vehicle has been obtained on the basis of
misrepresentation of material facts and shall communicate about cancellation of the RC to the owner of
the vehicle and the owner shall submit the RC to the authority.
If the vehicle is found to be used in the commission of an offence punishable under Sec. 199A, the
authority may cancel the RC of the vehicle for a period of one year.
Sec.56 Certificate of transport vehicles—not deemed to have valid registration if not having a fitness
certificate. No certificate of fitness shall be granted to a vehicle after such date as may be notified by
the Central Govt., unless such vehicle has been tested at an automated testing station.
No such cancellation shall be made by the prescribed authority unless it holds the requisite technical
qualification as prescribed by Central Govt. and the reasons recorded in writing cancelling a certificate
of fitness are confirmed by an authorized testing station chosen by the owner of such vehicle.
All transport vehicles with a valid Certificate of fitness shall display the same on their body.
The provisions of this section may be extended to non-transport vehicles also.
Sec.62 Information regarding stolen and recovered motor vehicles to be furnished by the police to the State
Transport Authority – The State Govt. may direction the police authorities to submit the details of
Stolen and recovered vehicles in prescribed format and the given time deadline.
62(A) No authority shall register any motor vehicle and no certificate of fitness shall be issued to any
motor vehicle that contravenes any rule made under Section 110.
62(B) The Central Govt. shall maintain a National Register of Motor Vehicles and all State Registers of
Motor Vehicles shall be subsumed under this National Register. No RC shall be issued/renewed
unless it has been issued a unique Registration Number under the National Register of Motor
Vehicles. State Govt. shall be able to access this Register and update the records.

CHAPTER-V CONTROL OF TRANSPORT VEHICLES

Sec.66 Necessity of Permits
Sec.72 Grant of Stage Carriage Permit
Sec.74 Grant of Contract Carriage Permit
Sec 76 Application for private service vehicle Permit
Sec.77 Application for goods carriage Permit
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Sec.78 Consideration of application for goods carriage Permit
Sec.79 Grant of goods carriage permit
Sec.81 Duration and renewal of permits—(1) a permit other than a temporary permit from the date of
issuance or renewal thereof for a period of five years.
(2) A permit may be renewed on an application made not less than 15 days before the date of its expiry.
Sec.82 Transfer of Permit
Sec.83 Replacement of vehicles—The holder of a permit may, with the permission of the RTO replace the
vehicle on the same permit

CHAPTER-VIII CONTROL OF TRAFFIC Sec.112 to 138

Sec.112 Limits of speed—No person shall drive a motor vehicle or cause or allow any person to drive at more
than stipulated speed.
Sec.113 Limits of weight and limitations on use—The State Government may prescribe the conditions for the
issue of permits for (transport vehicles) by the State or Regional Transport Authorities and may
prohibit or restrict the use of such vehicles in any area or route.
Sec.123 Riding on running board, etc.—No person driving or in charge of a motor shall allow anybody to ride
on running board.
Sec.128 Safety measures for drivers and pillion riders—(1) No driver of a two-wheeled motor cycle shall carry
more than one person in addition to himself on the motor cycle and no such person shall be carried
otherwise than sitting on a proper seat securely fixed to the motor cycle behind the driver’s seat with
appropriate safety measures.
(2) In addition to the safety measures mentioned in sub-section (1) the Central Government may,
prescribe other safety measures for the drivers of 2 wh. motor cycles and pillion riders thereon.
Sec.129 Wearing of protective headgear—Every person, above four years of age, driving or riding or being
carried on a motorcycle of any class or description shall, while in a public place, wear protective
headgear conforming to the standards as may be prescribed by the Central Govt. Provided that the
provisions of this sections shall not apply to a person who is a Sikh, if he is, while driving or riding on
the motor cycle, in a public place, wearing a turban.
Sec.130 Duty to produce licence and certificate of registration—The driver of a motor vehicle in any public
place shall, on demand by any police officer in uniform, produce his licence for examination
Sec.133 Duty of owner of motor vehicle to give all information—The owner of a motor vehicle, the driver or
conductor of which is accused of any offence under this Act shall, on the demand of any police officer
authorised in this behalf by the State Government, give all information regarding the name and
address of, and the licence held by, the driver or conductor which is in his possession or could by
reasonable diligence be ascertained by him.
Sec.134 Duty of driver in case of accident and injury to a person—When any person is injured or any
property of a third party is damaged, as a result of an accident in which a motor vehicle is involved,
the driver of the vehicle or other person in charge of the vehicle shall—take the injured to the nearest
hospital, will inform about the incident to the nearest police station at the earliest but within 24
hours, will inform the insurer about the incident mentioning insurance details and driver/owner’s
particulars.
Sec. 134A. A Good Samaritan (a person who in good faith, voluntarily and without expectation of any
reward or compensation renders emergency medical or non-medical care or assistance at the scene
of an accident to the victim or transports such victim to the hospital) shall not be liable for any civil or
criminal action for any injury/death of the victim of motor vehicle accident which has resulted during
rendering emergency medical or non-medical care or assistance to the victim.

CHAPTER-X - LIABILITY WITHOUT FAULT IN CERTAIN CASES (NFL) – Stands Omitted.

CHAPTER-XI INSURANCE FOR THIRD PARTY (TP RISKS)

Sec.145 Definitions—of authorised insurer, certificate of insurance, grievous hurt, hit and run motor
accident, Insurance Regulatory and Development Authority, policy of insurance, property,
reciprocating countries and Third Party.
Third party includes the Government, the driver and any other co-worker on a transport vehicle.
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Sec.146 Necessity for insurance against third party risk before bringing the vehicle to a Public Place. And for
Vehicles carrying dangerous or hazardous goods, a policy of insurance under the Public Liability
Insurance is also mandatory. Central/State Govt., State Transport Undertakings are exempt provided
a fund is established and maintained.
Sec.147 Requirements of policies and limits of liability – (1)It is mandatory for all Motor Vehicle to have a
policy issued by an authorized insurer covering against any liability for death of or bodily injury to
any person including the owner of goods or his representative carried in in the motor vehicle or
damage to any property of a third party and death of or bodily injury to any passengers of a transport
Vehicle (except gratuitous passengers of GCCV, caused by or arising out of use of the motor vehicle in
a public place.
(2) Central Govt. shall prescribe a base premium and the liability of an insurer shall be fixed in
relation to such premium in consultation with IRDA.
(4) Policies issued before the commencement of the Motor Vehicle (Amendment) Act, 2019 shall
continue on the existing terms (under MV Act 1988) under the Contract i.e. unlimited for
death/bodily injury and Rs. 6000/- for Third party property damage.
Sec.148 Validity of policies of insurance issued in reciprocating countries
Sec.149 Settlement by insurance company and procedure thereof (New Section)
149(1) Upon receiving information of the accident, the insurance company shall designate an officer
to settle the claims relating to such accident
149(2) Such designated officer may make an offer to the claimant for settlement before the Claims
Tribunal giving such details within 30 days and following the required procedure.
149(3) If the claimant, to whom the offer is made, accepts such offer, the Claims Tribunal shall record
such settlement and such claim shall be deemed to be settled by consent and payment shall be made
by the insurance company within a maximum period of 30 days from the date of receipt of such
record of settlement.
If the claimant rejects such offer, a a date of hearing shall be fixed by the Claims Tribunal to
adjudicate such claim on merits.

Sec.150 Duty of insurers to satisfy judgments & awards against persons insured in respect of TP risks
150(1) After issuance of a certificate of insurance, the insurer is liable to satisfy the judgements and
awards (not exceeding the sum assured payable) including cost and interest as passed against the
insured nothwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or
cancelled the policy.
150(2) (a) Defense available to the Insurer that there has been a breach of a specified condition of the
policy, being one of the following conditions, namely:—
i) a condition excluding the use of the vehicle—
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle
not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the
vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
ii) a condition excluding driving by a named person or persons or by any person who is not duly
licensed, or by any person who has been disqualified for holding or obtaining a driving
licence during the period of disqualification or driving under the influence of alcohol or drugs
as laid down in Sec. 185; or
iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil
war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the nondisclosure of a material
fact or by a representation of fact which was false in some material particular.
(c) that there is non-receipt of premium as required under Sec. 64VB of the Insurance Act, 1938
150(6) If the claimant is not aware of the Insurance Co., it will be the duty of the owner of the vehicle
to furnish to the Tribunal or Court the information as to whether the vehicle has been insured on the
date of accident and, if so, the name of the insurance company with which it is insured.

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 Definition of Award, Claims Tribunal, Liability covered by the terms of the Policy, Material Fact and
Material Particular.
Sec.151 On the insolvency of the insured or winding up the insured co., Third party has full rights against
the insurer and the insurer has to pay the claim..
Sec.152 Duty to give information as to insurance.—The insured is under obligation to disclose the insurance
particulars in the event of any claim preferred.
Sec.153 (1) Settlement between insurers and insured persons. No settlement is valid without the consent
of the concerned third party and if the concerned third party (victim) is not made a party to it.
(2) The Claims Tribunal shall ensure that the settlement is bodafide and was not made under undue
influence and the compensation is made in accordance with the payment schedule of Sec. 164.
Sec.155 Effect of death on certain causes of action—Death of insured after happening of an event which has
given rise to a claim under the policy, will not affect the rights of third party and liability of insurer.
Sec.156 Certificate of insurance to be treated as Full Policy
Sec.157 Deemed Transfer of Liability Portion of insurance policy in case of change of ownership of the
vehicle, from transfer date. New Owner shall apply within 14 days from the date of transfer to the
insurer for transfer of insurance in his favour.
Sec.158 (1)Production of Vehicular documents (Ins. Policy, RC, Pollution Certificate, permit, fitness etc.),
Driving licence and any certificate or authorization of exemption that has been granted under the
Act, to a police officer in uniform authorised in this behalf by the State Government.
(2) If the driver fails to produce the vehicular documents to the police officer, he or the owner shall
produce the said documents at the police station at which the driver makes the report required under
Sec. 134.
Sec.159 The Police Officer shall, during the investigation, prepare an accident information report to facilitate
the settlement of claim, within 3 months and containing such particulars and submit the same to the
Claims Tribunal or any other agency as may be prescribed.
Sec.160 Duty to furnish particulars of vehicle involved in accident by the Registration Authority and Police
to the person who needs it to file a petition for compensation and/or to the insurer.
Sec.161 (1) Special provisions as to compensation in case of Hit and Run motor accident - The Central Govt.
shall provide for paying in accordance with provisions of this Act and the scheme made under sub-
section (3), compensation in respect of the death of or grievous hurt to persons resulting from hit
and run motor accidents.
(2) Compensation for Death - Rs.2,00,000/- and Compensation for Grievous Injury Rs.50,000/- or
such higher amount as may be prescribed by the Central Govt.
(3) The Central Govt. may make a scheme specifying the manner in which the scheme shall be
administered by it of GI Coucil, the form, manner and the time which which applications for
compensation may be made, specifying the procedure of the administration of the scheme and
payment of the compensation under this section.
(4) A scheme made under sub-section(3) may provide that
(a) Payment as prescribed by Central Govt. as interim relief to the claimant
(b) a contravention of any provision thereof shall be punishable with imprisonment upto 2 years,
or with fine of not less than Rs. 25000 and upto Rs. 5 lacs, or with both
(c) The powers, functions or duties can be delegated to any other officer or authority.
Sec.162 Scheme for Golden Hour – The insurers shall provide for treatment of road accident victim including
during the golden hour. The Central Govt. shall make a scheme for the cashless treatment of victims
of the accident during the golden hour.
Sec.163 Payment made under Sec. 161 will be adjusted from any other award or compensation made by
MACT in other sections.
Sec.164 Earlier known as Sec.163A. Payment of compensation in case of death or grevious hurt etc. -
Compensation for Death - Rs.5,00,000/- and Compensation for Grievous Injury Rs.2,50,000/-.
Claimant is not required to establish the fault or negligence of the owner of the vehicle. If any
compensation has been paid under any other law for such accident, such amount shll be reduced
from the compensation payable under this Section.
164A. Central Govt. may make schemes for provision of interim relief to the claimants and also to
provide the procedure to recover funds disbursed under such scheme from the owner of the motor
vehicle.
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 164B. The Central Govt. shall constitute a Fund to be called the Motor Vehicle Accident Fund (to be
credited by payment, grant or loan or any other source of income as prescribed by the Central Govt.
& the balance of Fund created under Sec.163 prior to the commencement of Amendment Act, 2019)
for providing the insurance cover to all road users all across India.
The fund shall be utilized for treatment of road accident victims U/s 162, compensation for death and
grievous injury victims U/s 161.
The funds shall be managed by such authority or agency as prescribed by the Central Govt. The
accounts of the Fund shall be audited by CAG.
Any scheme framed under sub section (3) of Sec. 161 of earlier Act shall be discontinued all rights and
liabilities accruing thereunder shall be met out of the Fund under this Amendment Act, 2019.
164C. Power of Central Government to make rules and regulations for Chapter XI.
164D. Power of State Government to make rules, other than the matters specified under Sec. 164C.

CHAPTER-XII CLAIMS TRIBUNALS

Sec.165 Claims Tribunals—(1) A State Government may, by notification in the Official Gazette, constitute one
or more Motor Accidents Claims Tribunals (hereafter referred to as Claims Tribunal) for such area as
may be specified in the notification for the purpose of adjudicating upon claims for compensation in
respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor
vehicles, or damages to any property of a third party so arising, or both.
Explanation.—For the removal of doubts, it is hereby declared that the expression “claims for
compensation in respect of accidents involving the death of or bodily injury to persons arising out of
the use of motor vehicles” includes claims for compensation under Section 164.
(2) A Claims Tribunal shall consist of such number of members as the State Government may think fit
to appoint and where it consists of two or more members, one of them shall be appointed as the
Chairman thereof.
(3) A person shall not be qualified for appointment as a member of a Claims Tribunal unless he—
(a) is, or has been, a Judge of a High Court, or
(b) is, or has been a District Judge, or
(c) is qualified for appointment as a High Court Judge[or as a District Judge].
(4) Where two or more Claims Tribunals are constituted for any area, the State Government, may by
general or special order, regulate the distribution of business among them.
Sec.166 Application for compensation under Fault Liability—An application for compensation arising out of
an accident of the nature specified in sub-section (1) of Section 165 may be made—
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the legal representatives of the
deceased; or
(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the
deceased.
Provided that where all the legal representatives of the deceased have not jointed in any such
application for compensation, the application shall be mde on behalf of or for the benefit of all the
legal representatives and the legal representatives who have not so jointed shall be impleaded as
respondents of the application.
Provided further that where a person accepts compensation under Section 164 in accordance with
the procedure provided under Sec. 149, his claims petition under Sec. 166 before the Claim Tribunal
shall lapse.
No application for compensation shall be entertained unless it is made within 6 months of the
occurrence of the accident.
Report under Sec. 159 shall also be treated as application for compensation under this Act.
The right to claim compensation for injury, upon the death of injured person, shall survive to his legal
representatives, irrespective of whether the cause of death if related to such injury or not.
Issues to be proved u/s 166 : Factum of Accident, Factum of Negligence, Factum of Insurance,
Factum of Income, Factum of Age, Factum of dependency

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Sec.167 Option regarding claims for compensation in certain cases—In case the death of, or bodily injury to,
any person gives rise to a claim for compensation under this Act and also under the Workmen’s
Compensation Act, 1923, the person entitled to compensation may without prejudice to the
provisions of Chapter X claim such compensation under either of those Acts but not under both.
Sec.168 Award of the Claims Tribunal –
a) Upon receipt of application for compensation made under Section 166, the Claim Tribunal shall
hear both the parties, hold an enquiry into the claim and subject to the provisions of Sec. 163
will pass an award for compensation specifying the amount payable, the beneficiaries and the
payees.
b) Copy of award shall be given within 15 days.
c) Award to be satisfied within 30 days from the date of award.
Sec.169 Procedure and powers of Claims Tribunals—(1) In holding any inquiry under Section 168, the Claims
Tribunal may, subject to any rules that may be made in this behalf, follow such summary procedure as
it thinks fit. (2) The Claims Tribunal shall have all the powers of a Civil Court for the purpose of taking
evidence on oath and shall be deemed to be a Civil Court for all the purposes of Sec. 195. (3) The
Claims Tribunal may take the assistance of any person in holding the inquiry. (4) The Claims Tribunal
shall have all the powers of a Civil Court in the execution of a decree under Code of Civil Procedure
1908, as if the award were a decree for the payment of money passed by such court in a civil suit.
Sec.170 Impleading insurer in certain cases—Where in the course of any inquiry, the Claims Tribunal is
satisfied that—
(a) there is collusion between the person making the claim and the person against whom the claim is
made, or (b) the person against whom the claim is made has failed to contest the claim, it may, for
reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim,
shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have,
without prejudice to the provisions contained in sub-section (2) of Section 150, the right to contest
the claim on all or any of the grounds that are available to the person against whom the claim has
been made.
Sec.171 Award of interest where any claim is allowed—Where any Claims Tribunal allows a claim for
compensation made under this Act, such Tribunal MAY direct that in addition to the amount of
compensation simple interest shall also be paid at such rate and from such date not earlier than the
date of making the claim as it may specify in this behalf.
Sec.172 Claim Tribunal can file a cost to any party –Claimant/insured/insurer, for misrepresentation/void
policy/wrong defense. The parties are not liable for criminal proceedings also.
Sec.173 Appeals.—(1) Subject to the provisions of sub-section (2) any person aggrieved by an award of a
Claims Tribunal may, within 90 days from the date of the award, prefer an appeal to the High Court:
Provided that no appeal by the person who is required to pay any amount in terms of such award
shall be entertained by the High Court unless he has deposited with it Rs.25,000/- or 50%, of the
amount so awarded, whichever is less, in the manner directed by the High Court.
Provided further that the High Court may entertain the appeal after the expiry of the said period of
ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the
appeal in time.
(2) No appeal shall lie against any award of a Claims Tribunal if the amount in dispute in the appeal is
less than Rs.1,00,000/-.
Sec.174 Recovery of money from insurer as arrear of land revenue.—Where any amount is due from any
person under an award, the Claims Tribunal may, on an application made to it by the person entitled
to the amount, issue a certificate for the amount to the Collector and the Collector shall proceed to
recover the same in the same manner as an arrear of land revenue.
Sec.175 Bar on jurisdiction of Civil Courts.—Where any Claims Tribunal has been constituted for any area, no
Civil Court shall have jurisdiction to entertain any question relating to any claim for compensation
which may be adjudicated upon by the Claims Tribunal for that area, and no injunction in respect of
any action taken or to be taken by or before the Claims Tribunal in respect of the claim for
compensation shall be granted by the Civil Court.
Sec.176 Power of State Government to make rules and regulations regarding procedure for holding enquiry
for Tribunal/Appeal Procedure/Powers of Tribunal.

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HANDLING OF MACT CASES –

STEPS TO BE TAKEN BY CONTESTING OFFICE:

1. To depute immediately a Competent Advocate from Co.’s Panel, Register the claim.
2. In case of multiple claims arising out of same accident, same advocate to handle all cases.
3. Send a copy of Petition with name & Contact no. of dealing Advocate for their registering the case at their
end, to provide outstanding provision, asking them for a Certified copy of Policy with 64 VB Compliance on
Company’s format, duly signed and sealed.
4. If the policy particulars not disclosed in petition, a letter under Regd. AD to the owner to furnish all
documents related to the vehicle along with the DL of the person driving the vehicle at the time of
accident.
5. Ask the advocate to move application before the court for disclosure of policy particulars.
6. Depute a competent investigator to bring out the facts of the case relating to deaths/Injuries, their income
proof etc alongwith required documents.
7. Ensure all defense as available u/s 149 (2) are incorporated in the Written Statement it should not be
merely on denial basis instead the facts if known should be accepted. Ensure all defenses are proved in the
court.
8. Framing of all important and relevant issues be ensured. Regular follow-up with advocate is desired and
official of the Company should attend the important dates in the court.
9. If Owner/driver Ex-party-arrange issuance of summons through Tribunal to them.
10. If there is absolute liability of Company and no defence u/s 150 MV Act is available, endeavor can be made
to compromise the case as per Co.’s guidelines.
11. On passing of award, the advocate should immediately supply the CTC of award along with his opinion to
satisfy the award or assail it in to appeal.
12. The opinion of the advocate should be examined with prudence and then appropriate decision should be
taken as Co. is not bound to comply with his opinion.
13. The award if to be satisfied be done without
14. Loss of time in order to save the interest component.

LOK ADALAT

 LOK ADALAT for Motor TP Claims since APRIL- 1985

 This forum was initiated by Sh. P.N.Bhagwati, former C.J.I..
 Organised by State/Distt. Legal Aid Committee
 Permanent Lok Adalat being held now-a-days on monthly basis.
 Have the same powers as vested in Civil Courts
 The tribunals and Insurers can also pass on matured cases to be put up in LOK ADALAT.
 MEGA LOK ADALAT on All INDIA basis are also organized.
 The cases are compromised between the insurer and the claimants which saves not only the liability
amount but also interest components
 THE CASES TO BE PUT BEFORE LOK-ADALAT
a) The one which are free from any encumbrance i.e. all required papers viz Insurance, DL, RC, Permit,
fitness, income proof PMR etc are in order
b) Where Co. does not have any defence u/s 150(2) and it has absolute liability.
 There should not be made any conditional compromise.
 Having reached to the Compromise, a consent Order specifying the period within which the compromised
amount is to be is issued by the tribunal.
 Such amount should be deposited immediately preferably beyond which interest may be levied which will
defeat the very purpose of Compromise.

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JALD RAHAT YOJNA (JRY)

JRY Scheme came into force on 14.03. 1992 as a pre- litigation scheme to speed up settlement. The JRY covered
only Non fatal inury cases covering fault and no fault cases but not HIT AND RUN CASES. Claimants age should
be more than 18 years.

The Panel of JRY consist of: 1.RETIRED JUDGE, 2.MEDICAL PRACTITIONER, 3.RETIRED EXECUTIVE OF INS. CO.
THE DOCUMENTS REQUIRED :
 COPY OF FIR
 THE RC AND INSURANCE PARTICULARS OF OFFENDING VEHICLE
 MEDICAL CERTIFICATE
 MEDICAL RECORD & BILLS
 PROOF OF INCOME & AGE
 TWO PASSPORT PHOTOS &
 PRESCRIBED CONSENT FORM.

SOME IMPORTANT TERMINOLOGY

Absolute Liability: Where the insurer is liable to compensate and has no defence whatsoever

Contributory negligence: In case of collision of vehicles, where both the vehicles are negligent in causing the
accident

Res ipsa Loquiter: Things speak for itself

Volunti Non Fit Injuria: A person voluntarily is running the risk for his life. Here, the driver of the vehicle is not
the negligent party

Inevitable accident: Accident takes place despite taking all precautions. Onus on the driver to prove it.

Act of God (Vis Major): Natural causes without human intervention

Emergency: A person causing injury to another by acting in a way on account of imminent danger

THE CONSUMER PROTECTION ACT-1986.

District Consumer Redressal Forum – Cases involving Amount upto Rs. 20 Lakhs.

State Consumer Redressal Forum – Applete Authority for District Consumer Redressal Forum and Fresh cases
involving Amount More Than Rs. 20 Lakhs but Less Than Rs. 1 Crore.

National Consumer Dispute Redressal Commission – Applete Authority for State Consumer Redressal Forum
& Fressh Cases involving Amount More Than Rs. 1 Crore.

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OMBUDSMAN

The Institution Of Insurance Ombudsman was created by a Government of India Notification dated 11th
November, 1998 for quick disposal of the grievance of the insured customers and to mitigate their problems
involved in redressal of those grievances.

Insurance ombudsman is appointed by General Insurance Council Of India for 3 years or upto the age of 65
years whichever is earlier. Reappointment not allowed. As on date, there are 17 ombudsmans.

POWER OF OMBUDSMAN – The area of complaint may relate to

(1) any partial or total repudiation of claims by Insurance Companies
(2) dispute with regard to premium paid or payable in terms of the policy
(3) dispute on the legal construction of the policy wordings in case such dispute relates to claims
(4) delay in settlement of claims and
(5) non-issuance of any insurance documents to customers after receipt of premium.

FINANCIAL POWER - Matters referred not exceeding Rs. 30 Lacs involving Dispute in Quantum.

PROCEDURE OF LODGING COMPLAINT – The complainant should lodge a complaint in writing to Ombudsman
office under whose jurisdiction the insurer’s office falls but before lodging complaint, the complainant should
ensure that
1. he should have filed a complaint against the insurer and has not received satisfactory reply
2. the complaint is not made later than one year after the insurer had replied.
3. the same complaint on the subject should not pending with before any court, consumer form or
arbitrator.

RECOMMENDATIONS OF THE OMBUDSMAN – After deciding the case, the ombudsman shall make aware the
insurer as well as complainant about his recommendations within one month. In return complainant has to
reply within 15 days about the acceptance of the recommendation to the Ombudsman. After receiving
acceptance from the complainant, the Ombudsman shall pass an award within a period of three months from
the receipt of the complaint.

CHALLENGING OF AWARD – The insurance company cannot challenge the award passed by the Ombudsman
but can refer the same to the GI Council only. However, the complainant has the liberty to approach the other
avenues like Consumer Forums and Courts of law for redressal of his grievances, if he is not satisfied with the
award of the Ombudsman.

DUTY OF INSURER – As per the policy-holder’s protection regulations, every insurer shall inform the policy
holder alongwith the policy document in respect of the Insurance Ombudsman in whose jurisdiction his office
falls for the purpose of grievance redressal arising, if any, subsequently.

WHO CAN LODGE A COMPLAINT – An individual. Complaint lodged by corporate client does not come under
the preview of the Ombudsman.

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