Motor Insurance

Question 1

Which act regulates motor insurance?

Answer 1

Road Transport Act 1987

Question 2

Why is motor insurance compulsory by law?

Answer 2

Available funds compensate victims of road accidents,

Funds readily available when damages are awarded by court,

Ease GOVT burden & protect national interest

Question 3

Classification of motor vehicles

Answer 3

1. Private car
2. Commercial vehicles
3. Motor cycles

Question 4

Types of Motor Insurance Coverage

Answer 4

• 3rd party
• 3rd party fire & theft
• comprehensive

Question 5

NCD (no claims discount) Tabulation

Answer 5

After:-

1st Year - 25%
2nd Year - 30%
3rd Year - 38.33%
4th Year - 45%
5th Year & above - 55%

Question 6

Timeline to inform the insurer of accident involving the insured’s motor vehicle if he was not physically disabled

Answer 6

Within 30 days

Question 7

Role of Motor Insurers’ Bureau (MIB)

Answer 7

To compensate victims of road accidents caused by uninsured or untraceable drivers

Question 8

3rd Party Coverage

Answer 8

Liability for property damage in addition to liability for death or bodily injury to any person arising from the use of a motor vehicle on a road. Sought after mainly by owners of older vehicles (since their value is low anyway)

Question 9

3rd Party Fire & Theft

Answer 9

Loss of or damage to the insured vehicle as a result of fire or theft in addition to third party insurance described

Question 10

Comprehensive cover

Answer 10

Widest form of cover available and caters for newer vehicles. Scope of cover is for any loss of or damage caused by specified perils