WRITE UP ON MOTOR INSURANCE

COMPILED BY VISHNU AGGARWAL FOR PRE PROMOTION TRAINING

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 passed in 1939 introducing the Law for compulsory Third Party Motor Insurance

New Motor Vehicle Act 1988 replaced the 1939 Act and became effective from 01.07.1989.

In India, we 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
followed.

In India motor was a tariff business till 31st of December 2006, from 1st of January 2007 it has been has been
withdrawn

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.

Motor Vehicle Act 1988 - It is amended form of MV Act 1939. MV Act 1988 describes compulsory Third Party
Insurance. The liabilities which require Compulsory Insurance are as follows:
1. Death or bodily injury of any person including owner or representatives of goods carried in the Carriage.
2. Death or bodily injury of passengers carried in Passenger Carrying Vehicle.
3. Liability arising under W.C. Act 1923 in respect of death or bodily injury of paid driver, conductor & workers
in goods Carrying Vehicle.
4. Damage to the Third Party property upto Rs.6,000/-

Certificate of insurance - It is needed to comply with compulsory Third Party Insurance. It is issued by
authorized insurer only.

Driving Licence

Learners Licence - for a period of six months from the date of issue.
2 Wheeler/Pvt. Cars
In case the age of driver is < 50 years 20 years or date on which driver attains age of 50 years,
whichever is less.
in case the age of driver is > 50 years 5 years
Transport Vehicle Licence valid for 3 years
DL to drive Tpt Veh. Carrying goods of dangerous or hazardous nature valid for 1 year Renewable after
going through refresher course for 1 day
All licences except Learners Licence effective for 30 days from the dater of expiry provided the same is
renewed within this period.
 Minimum Age for issuance of Driving Licence:
o 2 Wheeler without Gear/Less than 50 CC 16 Years
o 2 Wheelers (other than above)/Pvt. Cars 18 Years
o Transport Vehicle 20 Years

Transport Vehicle

No Learners Licence is issued

For Transport Vehicle 1 year after issuance of LMV Licence
For issuance of Goods Carrying dangerous/Hazardous goods Minimum Qualification 10 Pass.

Registration Certificate

To apply within 7 days from the date of taking delivery.

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.

FITNESS:

For Transport Vehicle Valid for 2 years for brand new vehicle and 1 year for further renewals
In case Fitness has expired on the date of loss, claim is not payable.

PERMIT:

Valid for 5 years (except Temporary or special permits)

Renewal takes place w.e.f. 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.

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.

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

In all there are 49 General Regulations. These contain guidelines on underwriting etc of motor insurance.
GR NO. DESCRIPTION SEC/IMT
1. Insurance Motor Insurance in India cannot be transacted outside the purview of the India
not 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..Rs. 500 per vehicle irrespective of class of vehicle.
~ Other Policies.Rs. 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
extened 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
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.Insureds IDV of the vehicle deemed to be the SUM INSURED and fixed on
Declared Value manufacturers listed selling price of the brand and model of vehicle at
(IDV) commencement at 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 inurer & 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.
Insurers 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.
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 rateable 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 rateable 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 Rs. 25 per vehicle: For vehicles specifically designed/modified for use of blind,
Premium handicapped, mentally challenged people. Rs 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 transferees 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 Rs.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
19,20,21. Policies & Certificates to be issued in the name of:-
Vehicles Subject 1. Hire purchase agreement: Hirer only-Owners interest can be protected by IMT 5
to Hire endorsement.
Purchase/ 2. Lease agreement: Lessee only-Lessors interest can be protected by IMT 6
Lease/ endorsement.
Hypothecation 3. Hypothecation agreement: Registered owner only-Pledgees interest can be IMT 7
Agreements protected by endorsement.
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 & insuer 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 insureds 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
the 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 RTOs endorsement.
Rs 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.
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.[Except for (g),(h),(i) above].
28. Automobile 5% of OD premium on new insurance/renewal of Package Policy only. IMT 8
Association Maximum Rs. 200 for car & Rs. 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. Pro-rata for mid-term certification. IMT 9
Vintage Cars
30. Discount for 2.5% on OD premium (maximum Rs 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.
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 insureds 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 insureds 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.
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
Insureds 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.
36. Personal Compulsory Personal Accident Cover for Owner-Driver
Accident (PA) Applicable under both Liability Only and Package policies.
Cover under The registered owner of individual insured vehicle holding an effective
Motor Policy driving license is termed as Owner-Driver for the purposes of this section.
Cover is provided to the Owner-Driver whilst driving the vehicle including
mounting into/ dismounting from or traveling in the 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 owner does not have an effective D/L. Premium not to be charged &
delete provision.
If insured has more than one vehicle-PA cover for one vehicle only at his
option.
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 Rs. 1 lakh for private & commercial 2 wheelers;
Damage Cover Rs. 7.50 lakhs for all other commercial vehicles, 3 wheelers, taxis, private
cars & 2 wheelers rateable under commercial vehicle Tariff.
B. However, the insured can at the inception of the policy, opt to restrict to the
TPPD cover to the statutory limit of Rs. 6000/- as provided in the M. V. Act.
In such an event, the base TP premium applicable (before any loading/
discount ) may be reduced by Rs. 100/- for Private Cars and Rs. 50/- for
Motorized Two Wheelers
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, private cars, taxis, commercial vehicles of all
classes.
Also applicable where restricted covers as per GR 45 A/B granted {Fire &/or
Theft Risks}.
41. Electrical/ Fitted but not included in manufacturers 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 Rs 100 extra for OD section for Class D commercial vehicles; Rs 50 extra for all
fuel tanks 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 as IMT 27
Cover for Liabi- 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 appd. 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 appd
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
vehicles which
have met with
an accident
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- TACs clarifications & interpretations are final & binding.
tation of India
Motor tariff
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
Fibre glass components 30% Commercial Vehicles Goods carrying Passenger carry (Rs)
Glass Parts Nil (other than vehicles < 7500 Kg.GVW < 17 passengers 500/-
rateable under Class-D,E,F > 7500 Kg.GVW & > 17< 36 1000/-
and G of CVT) < 16500 Kg. GVW passengers
Other parts incldg. Wooden
parts, Metal Parts etc. > 16500 Kg. GVW > 36 passengers 1500/-
AGE OF THE VEHICLE Dep.
< 6 months Nil Vehicles rateable under Class D of the Com.Vehicles Tariff (CVT)
> 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
4 Wheeler
DEP. FOR ARRIVING AT IDV Cubic Capacity of vehicle Premium Minimum Value
Other than for Motor Trade Policies Not exceeding 1000 cc 1468 15000
AGE OF THE VEHICLE DEP. > 1000cc but < 1500 cc 1598 20000
< 6 months 5% Exceeding 1500 cc 4931 30000
> 6 months but < 1 year 15% 2 Wheeler
> 1 year but < 2 years 20% < 75 cc 519 5000
> 2 years but < 3 years 30% > 75 cc < 150 cc 538 5000
> 3 years but < 4 years 40% >150 cc < 350 cc 554 6000
> 4 years but < 5 years 50% > 350 cc 884 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
ESTIMATE OF REPAIRS REVISED FEES
OUTSTATION SURVEY (SPOT/FINAL/ UPTO RS. 20,000/- RS. 750/-
RE-INSPECTION) INVOLVING 20000/- TO 50,000/- RS. 1100/-
OVERNIGHT STAY AWAY FROM THE 50000/- TO 100000/- RS. 1300/-
NORMAL PLACE OF WORK
Fees calculated at 150% of amt. 100000/- TO 200000/- RS. 2000/-
determined as per scale given above 200000/- AND ABOVE 2000 + 0.65% on Bal. above Rs. 200000/-
will be payable. subject to Maximum Fee 10000/- in all
INVESTIGATION FOR OD CLAIMS Photographs @ Rs.10/- each, subject to Maximum of Rs.200/-
UPTO RS. 600/- + out of pocket exp. DAILY HALTING ALLOWANCE
CLASS OF CITY REVISED FEES
RE-INSPECTION/SPOT SURVEY FEES A CLASS CITIES RS. 600/-
UPTO 80 KMS. 750/- B CLASS CITIES RS. 500/-
ABOVE 80 KMS. 900/- C CLASS CITIES RS. 400/-
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. Pvt. Car
B. Motor Cycle/ Scooter
C. Commercial vehicle

Type of Policies I) Liability only policy : To cover Act liability

II) Package policy : To cover own damage losses & Act liability.

GENERAL EXCLUSIONS (Applicable to all Sections)

a) Outside geographical area
b) Contractual liability claims
c) Use of vehicle in breach of Limitation as to use
d) In contravention of Drivers clause
e) Loss/Liability arising directly or indirectly out of War & Nuclear risk
f) Liability to employees other than those connected with the operation of vehicle.

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 unless the vehicle is damaged at the same time (50% of cost of replacement is payable)
c) Loss when vehicle is driven under the influence of intoxicating liquor or drugs

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.

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.
For motor cycle, scooters Upto Rs.300/-
For Private Car Upto Rs.1,500/-
For commercial vehicle Upto Rs.2,500/-

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 Rs.500/- (Rs.150/- for Motor Cycles)

COMPULSORY EXCESS - Applicable to all classes of vehicles. 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.
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.

Conditions of policy:

a) Notice of loss Immediate written notice to Insurance co.

b) No admission/offer, promise or payment without the consent of the insurer
c) To maintain the vehicle in efficient working condition
d) 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 days
notice.
e) In case of more than one policy for same liability, the insurers will contribute a ratable proportion of any
compensation, cost or expenses.
f) Arbitration In case of dispute on the quantum of claim.
g) Insured to observe & fulfill all the terms & conditions of the policy
h) Transfer of Policy in the event of death of insured. Policy valid for 3 months from the death of insured.

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

The following discounts can be allowed in case of Private cars and 2 wheelers:
a) No claim Bonus
b) Automobile Association Discount
c) Discount for anti-theft devices
d) Discount for side- car in case of 2-wheelers only.
e) Voluntary excess discounts.

Commercial Vehicles: includes

a) Goods carrying Vehicles Includes public/ private carriers, three wheelers even Motorised pedal cycles.
b) Trailers
c) Vehicles carrying Passengers for hire or reward e.g. Buses, Taxis etc.
d) Miscellaneous and special types of vehicles e.g. Cranes, Ambulances, etc.
e) Motor trade Road transit Risks
f) Motor Trade road Risks
g) Motor Trade Internal Risks
h) These policies are taken by Dealers / Garage owners.

Rating factors for Commercial vehicles:

a) Insureds declared value
b) Zones
c) Age of the vehicle
d) Gross vehicle weight (GVW) in case of goods carrying vehicle and licensed carrying capacity in case of
Passenger carrying vehicles.