Page 209 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes 11.5 Summary

The insurance of motor vehicles against damage is not made compulsory, but the insurance
of third party liability arising out of the use of motor vehicles in public places is made
compulsory. No motor vehicle can play in a public place without such insurance.
The liability in respect of death of or bodily injury to any passenger of a public service
vehicle in a public place, the amount of liability incurred is unlimited.
The Motor Vehicles Act provides that the policy of insurance shall be of no effect unless
and until a certificate of insurance in the form prescribed under the Rules of the Act is
issued.
If the motor car is disabled as a result of damage covered by the policy, the insurers bear
a reasonable cost of protecting the car and removing it to the nearest repairers, as also the
reasonable cost of re-delivery to the insured.

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 insurer has the option to repair or replace the vehicle or parts or pay in cash the
amount of damage or loss.

Any claim on account of damage of the vehicle will be paid by the insurance company
subject to the assessment of loss by the independent Surveyor.
Third party claim is settled by the court and the government has laid down the procedure
to settle these cases.

11.6 Keywords

Commercial Vehicles: A commercial vehicle is any type of motor vehicle used for transporting
goods or paid passengers.

Compulsory Insurance: Compulsory insurance is any type of insurance coverage that is required
by law before individuals or businesses may engage in certain activities.
Motor Insurance: Motor insurance is the insurance which consumers can purchase for cars,
trucks, and other vehicles.
Proposal Form: The proposal form elicits all information necessary for rating and underwriting.
Third Party Claims: Third party claims is a derivative lawsuit brought by a defendant in an
original lawsuit, claiming that another new party being brought in is responsible for or should
share in the plaintiff’s damages against the defendant.
11.7 Review Questions

1. Define motor insurance. Also, explain the meaning of motor insurance.
2. What do you understand by certificate of insurance under motor insurance? Explain.
3. What are the various kinds of motor insurance policies?
4. Define the term towing charges.

5. Explain the claim settlement under motor insurance.

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