About Motor Insurance

Motor Risks

The owner of an automobile vehicle is exposed to various types of risks. These risks fall into two groups: First, those of damage to, or loss or destruct on of, the car itself and, second, that of being called upon to pay damages for injuries which may be done to others through the use, ownership or maintenance of the car.

The first type of risk may further be classified as follows:

(I) Destruction by fire, internal or external in origin.
(ii) Theft.
(iii) Injury through collision, with some other object, moving or fixed or through upset.
(iv) Other damage to car as by breakage of glass, damage in a flood, or while being transported.

The second type of risk is the liability of the insured to third parties arising out of accidents caused by the use of a motor vehicle on the road. The liability may be for death or bodily injury or for damage to property. The risks also vary according to the class of vehicle, e.g., in a passenger automobile the liability may be for death of, or injury to, passengers or in a common carrier the liability may be toss of or damage to the property carried.

Motor Insurance

The owner of a vehicle who is exposed to the above risks may get himself insured against all or some of them with an insurance company. Regarding third party risks of personal nature, i.e., any liability in respect of the death or bodily injury to any person caused by or arising out of the use of the vehicle in a public place, the owner has no option but to insure because under the Motor Vehicles Act of 1939 he cannot use a motor vehicle in a public place without a policy of insurance. Similarly he has also to take an insurance policy covering any liability arising under the provisions of the Workmen's Compensation Act, 1923 in respect of the death of or bodily injury to any paid employee engaged in driving or otherwise in attendance on or being carried in a motor vehicle. Thus it will be seen that an owner must take an insurance policy to cover his legal liability to third persons and his driver. This factor of compulsory insurance of third party risks is unique in motor insurance. It is a matter of national policy. So as far as the other risks are concerned, he is at liberty not to insure, but it is in his interest to do so; and usually all the owners take insurance against most of the risks mentioned above. The insured will pay the agreed premium to the insurance company which will make good all the losses arising out of the risks insured against in a particular policy.

The insured can combine the different risks under one policy. These days' comprehensive policies are issued which cover a wide variety of risks under a single coverage. All the risks cannot be insured with one company. Usually fire and theft risks are written by fire companies and liability insurance is entirely written by casualty companies. The collision and property damage coverage are divided between both the groups. When there is a common control over the two companies, combination policies are to cover all risks. However, there is no such distinction between different companies and any company doing general insurance business can cover all the risks under one policy.

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