Smart motor insurance policies offer comprehensive cover for the motor vehicle owner in addition to the statutory third party liability.
K N Murali
Indian roads are known for their rough rides and as for motorists abiding by traffic rules, less said the better! It is estimated that over 10 lakh people in India lost their lives in road accidents in the last 10 years. Estimates indicate that a road accident happens every 60 seconds and a death is caused by such accidents every 3.7 minutes.
According to the World Health Organization, drivers’ faults caused 78 per cent of all accidents. You may consider yourself smart at driving but what about the others driving on the roads?
Most of us have imbibed a culture of carelessness towards the possibility of risk of any kind, much less towards traffic accidents. We seem to leave it to the powers above or fate to save us from accidents.
However, if you own a vehicle and consider yourself intelligent, there are things you ought to know, starting with taking a smart motor insurance policy. A smart motor insurance policy that is, not just a motor insurance policy.
The Motor Vehicles Act requires that third party liability risks must be insured, meaning the owner of the vehicle has a statutory liability (whilst the vehicle is in usage on any public road) to third parties who face injuries or death due to usage of the vehicle. The third parties can recover compensation from the owner of the vehicle as per statutory liability. The owner of the car in turn passes the liability to an insurance company through 'contractual liability' by taking an insurance cover for third party risks.
The biggest benefit of the third party motor insurance cover is that even if there is a liability of Rs.10 crore to a car owner, the insurer is bound to pay the entire compensation provided all other things are found correct (like valid driving license to the driver of the vehicle at the time of accident, there was no overloading/breach of policy conditions, etc).
But while everyone, whether the owner of a public or private vehicle, does take a third party motor insurance cover, they do not generally take a cover for ‘own damage’. One reason is that there is a general lack of awareness on a comprehensive motor insurance policy and its benefits.
Comprehensive policies are all-encompassing. They cover loss/damage to insured motor vehicle on account of accidents, theft, riot, strikes, malicious damages, fire, explosions, self-ignition, lightning, terrorism or natural calamities such as floods and earthquakes.
This kind of a policy may be more expensive but given our current lifestyles and the amount of time we travel in cars, this is the kind of policy to take.
With cars getting expensive, even the theft of a logo (like the star of the Mercedes) can turn out to be expensive. Besides, such a policy can cover theft of audio systems, damage to engines and other expensive parts of the car depending on the cover taken.
Some insurance companies offer personal accident cover for passengers, paid driver, cover legal liability for paid driver, legal liability to the employees of the insured other than paid driver, cover for electronic, electrical and non-electrical accessories.
There are policies that even offer road repair and flat tyre service, towing your car to the nearest garage, lock out or lost key assistance, emergency fuel assistance and even cashless repair at garages. That’s not all, for smart policies offer legal advice to the owner of the insured vehicle in the case of accidents, 24x7 roadside assistance in case of emergencies due to accidents, offer depreciation waiver on plastic or metals parts in case of partial loss or claim and even replace windshield glass without affecting your No Claim Bonus.
Normally, motor insurance policies run for a period of one year, though it is now possible to take a multi-year policy. If there is any damage to insured vehicle on account of any of the perils mentioned above, the customer is entitled to claim compensation from insurer for the repair/replacement of parts or all parts of the vehicle as the case may be. It is now possible to even have a dedicated relationship manager at the insurance company to guide you through the claims process in case of an accident.
So be smart, be prepared. Take a smart motor insurance cover now.
Author is head – motor underwriting, Royal Sundaram Alliance Insurance Company