Motor insurance is an outright need for any individual who drives a vehicle and the fact that in India, third party motor insurance are even mandated by law. Motor insurance generally the covers vehicle owner against damages and liabilities arising out of accidents, thefts and also protects the general public from any accident that might take place on the road. It is a contract between you and the insurance company wherein you pay a premium for a policy that will provide protection against every comprehensible risk related to your vehicle; damage, theft, death and injury in an accident, plus liability protection in case you are sued as a result of an accident (third party liability).
The motor insurance in general includes: loss, damage by accident, lightning, fire, explosion, burglary, housebreaking, malicious act, theft, third party injury liability and death and liability to a paid driver.
Motor insurance acts like a protection against any unforeseen risk which may result in a financial loss or liabilities:
In order to over just liabilities and financial losses (whichever are associated with the accidents) a motor insurance is required.
Motor vehicle act, 1988
It is important to have some information about the motor vehicle act passed in 1939 and amended in the year 1988. The insurance of the motor vehicles against the damage is not mandatory, but the insurance for third party liability arising out of the use of the vehicle in Public place is compulsory.
The liabilities that required compulsory insurance are as follows:
Certificate of insurance under motor vehicle act:
As per rule 141 of central motor vehicle rules 1989, a certificate of insurance is to be issued only in form 51. It is only in motor vehicle insurance, apart from policy, a separate certificate of insurance is required to be issued by insurers as per law. This document should always be carried in the vehicle. Policy should be preserved separately at home/ office.
For the purpose of insurance, motor vehicles are classified into 4broad categories: