Page 201 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes Compulsory Excess

This applies to all vehicles. The insured has to bear a part of the claim amount in respect of each
accident. Further loss/damage to lamps, tyres, mudguards and/or bonnet side parts, bumpers
and/or paintwork is not payable except in the case of a total loss of vehicle.
Section II: Liability to Third Parties: The insurers indemnify the insured against all sums which
he may become legally liable to any person including occupants carried in the motor car (provided
that they are not carried for hire or reward) by reason of death or bodily injuries caused to such
third parties or by reason of damage to the property of third parties caused by or arising out of
the use of the motor car. The insured’s liability for damage to property of third parties is limited
to ` 6000; whilst liability for death of or bodily injury to third party is unlimited.
The legal costs and expenses incurred by such third parties are reimbursed in addition. The legal
costs and expenses incurred by the insured are also reimbursed provided that they were incurred
with the insurer’s written consent.
The insurers are liable for the death of or bodily injury arising out of and in the course of
employment, but only to the extent necessary to meet the requirements of the Motor Vehicles
Act. The damage to property is not paid for, if the damaged property belonged to the insured or
was held in trust by him or was in the custody or control of the insured.

Notes This section is, more or less, the same for all vehicles, subject to some variations for
motor cycles and commercial vehicles.
Section III: This appears in commercial vehicle policies only. This section provides cover while
the vehicle is towing one disabled mechanically – propelled vehicle. It provides that whilst the
insured vehicle is being used for the purpose of towing any one disabled mechanically – propelled
vehicle (a) The cover provided by the policy remains operative, and (b) under Section II of the
policy, indemnity will also be provided for the liability in connection with such towed vehicle.
This however is subject to the following two provisions:

(i) The towed vehicle should not be towed for hire or reward, and
(ii) No cover is available under the policy for the damage to the towed vehicle or the property
conveyed thereby.

General Exclusions (applicable to all sections)

These provide that the insurer shall not be liable in respect of:
(a) Any accident outside the geographical area specified in the policy, that is, India. The limit
can be extended to cover Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka & Maldives on
payment of extra premium.
(b) Contractual liability.
(c) Any accident when the vehicle is used not in accordance with the Limitations (Use Clause)

(d) Any accident when the vehicle is driven without an effective driving licence (Driver’s
Clause).
(e) War, etc. and nuclear risks.

196 LOVELY PROFESSIONAL UNIVERSITY