Motor insurance is an insurance policy that covers the policyholder in case of financial losses resulting from an accident or other damages. It is a compulsory insurance under the Motor Vehicles (Third Party Insurance) Act 1950. There are three relevant covers under this heading:
- Comprehensive Motor Insurance Policy: This is the highest level of protection for your car. This policy covers loss or damage to the insured vehicle as a result of fire, theft, vandalism, accidental damage as well as collision. It also provides cover for legal liability arising from death, bodily injury or damage to third party’s vehicle/property arising out of use of the insured vehicle. It does not cover loss or damage caused by use of the insured arising from depreciation, wear and tear, damage to tyres and tubes, damage caused by drunken driving, use of the vehicle for a criminal activity etc.
- Third Party Fire and Theft: This policy provides cover in addition to what is covered under the third party only policy, loss/damage of the insured vehicle arising as a result of theft, attempted theft as well as fire damage to the vehicle.
- Third Party Only. This policy offers you the legal minimum level of car insurance cover. The essence of this cover is to help protect third parties, their vehicles and other properties which might be injured or damaged as a result of an accident that was deemed to be the insured’s fault. However, it does not provide cover for loss/damage/injury to the insured, the insured’s vehicle or the insured’s property.
Who can buy this policy? Owners of private vehicles and/or motorcycles, commercial vehicles (Goods only and/or conveying people), Trucks, Tankers, cranes of various kinds and any mechanically propelled vehicles.