Key Concepts
• What is insurance
• Motor Vehicle insurance and its types
• Premiums
• Benefits of motor vehicle insurance
• How does motor vehicle insurance works
• Motor Vehicle insurance and its types
• Premiums
• Benefits of motor vehicle insurance
• How does motor vehicle insurance works
What is insurance ?
Insurance is a setup in which a contract is signed between two parties, the insurer and the
insured, where the insurer promises to provide financial protection to the insured in case of any
unexpected losses. For e.g. you happen to meet a road accident while going to a place by your
car, the result of which the car suffers damage. If you availed for the service of insurance the
insurer will reimburse for the loss incurred during the accident
Motor Vehicle insurance and its types ?
Motor Vehicle insurance is an insurance provided by the insurer to the insured, vehicle, or a third
party in case of any accident, fire or natural disaster. Section 146 chapter XI of the Motor
Vehicle Act 1988 provides for mandatory insurance of motor vehicle against third party risks
Types of motor vehicle insurance ?
1. Third party insurance – This type of insurance covers the damage cause to the third person or
their property by your vehicle. In most countries including India it’s a minimum legal
requirement having the least premium among all.
2. Own damage insurance– This is also known as 1st party insurance which covers the damage
suffered by the insured and the vehicle.
3. Second Party Insurance – It is a premium paid to the insurance company from which you have
availed the insurance service.
4. Comprehensive policy –It covers the vehicle, the driver and the thirds party.
Premiums to be paid.
The premiums to be paid depends upon the following aspects.
1. Concerning the driver : the age and gender of the driver ,marital status of the driver , driving
experience of the driver affect the premiums in different ways
2. Concerning the vehicle : the value ,safety features provided, age and the purpose of the vehicle
determine the premium
3. Other factors such as the policy terms and conditions, the geographical location also play a
crucial role in determining the price of the premiums to be paid
How does motor vehicle insurance work
Insurance works on the principle of risk pooling where the premiums collected from many
policyholders is utilized to meet the expectations of fewer policyholders in case of any
unforeseen event.
Once you buy the insurance policy of your convenience, regular payment of premiums is a
necessary step in order to avail the benefits in the future.
In case of any mishap the insurance company will provide coverage for your loss by assessing
the circumstances and the situations thoroughly
Now if access the claim and if you wish to go for the renewal of the policy you can do so.
*Note –Before opting for any insurance policy read the document thoroughly which states the
parameters on which the policy will be applicable and will answer your questions about how
much and what all will the policy cover.
Benefits
Opting for a motor vehicle insurance provides you with
• Financial assistance
• Peace of mind
• Legal compliance with the government policies
• Medical payment coverage
• Physical damage coverage
• In case of Commercial vehicles- employee insurance and business security
Conclusion
Motor Vehicle insurance is a classic example of risk management and financial preparedness. It
ensures financial assistance, peace of mind and well being of an individual from any uncertain
mishap and adds a significant value to a safer driving environment.
Why Choose Vakilsathi?
You should choose us so that we can take care of you, your Vehicle and your family and give you the right insurance information and also help you in the claim so that you and your family do not have to face any problem in the future. (Shivangi)
