Major Classes of Insurance

Motor Insurance

Overview

For the various types of vehicles, there are four kinds of cover available:

(A) Comprehensive Motor Policy

This is the widest form of cover that is available and it covers loss of or damage to the Insured vehicle and/or its accessories due to:

  • Accidental collision or over-turning of vehicles
  • Fire, external explosion, self-ignition or lightning
  • Theft
  • Malicious act
  • The Insured’s Legal Liability for death of or bodily injury to or damage to property of 3rd parties arising out of the use of the insured vehicle
  • Medical expenses of the insured, his driver or any occupant of the Insured vehicle at the time of the accident. This cover is in respect of private cars only and to a specific limit
  • Solicitors fees for the legal representation of the Insured or his driver at any judicial proceeding arising from any accident which may give rise to a claim under the policy and any other expenses of the Insured authorized by the insurer, preferably in writing.
  • (B) Third Party Fire And Theft Policy

    This covers:

  • Loss of or damage to the Insured vehicle and/or accessories while thereon caused by fire, external explosion, self-ignition or lightning
  • Theft.
  • Insured’s Legal Liability to third parties in respect of any damage to the property of such third parties and for any injury or death to 3rd parties from the use of insured vehicle.
  • Solicitors fees for the legal representation of the insured or his driver at any judicial proceeding arising from an accident which may give rise to a claim under the policy and other expenses of the insured authorized by the Insurer preferably in writing.
  • (C) Third Party Only Policy

    It covers:

  • Insured’s Legal Liability to third parties in respect of any damage to the property of third parties and for any injury or death to third parties from the use of the insured motor vehicle.
  • Solicitors fees for the Legal representation of the insured or his driver at any judicial proceeding arising from an accident which may give rise to a claim under the policy and any other expenses of the insured authorized by the insurer preferably in writing.
  • (D) Act Only Policy

    This is the minimum cover that is required by the motor vehicle Third party Motor Insurance Act of 1945. The scope of cover is as listed below:-

  • The insured’s Legal Liability to third parties in respect of any injury or death to third parties from the use of the motor vehicle.
  • Solicitors fees for the Legal representation of the Insured or his driver at any judicial proceeding arising from an accident which may give rise to a claim under the policy and any other expenses of the insured incurred with the insurers consent.
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    Who Requires a Motor Insurance Policy?

    Any individual or corporate body that is using motor vehicle on the road is by law according to Third party Motor Insurance Act of 1945, required to put in place at least an Act Cover.

    Rating Method

    This class of insurance is tariff rated. The format for the calculation is alike but may vary according to the extra benefits that may be granted under a private vehicle policy.

    The following factors are very important consideration for the rating of this policy:

  • Value of vehicle
  • Period of cover
  • Type of vehicles
  • Fleet rating
  • Plurality discount
  • Classification Of Vehicles

    (A) PRIVATE VEHICLE

    A private vehicle is regarded as one that is used by the policy holder for his social, domestic, pleasure and business purposes only. It should not be used for hire, reward, racing, pace making, reliability trial, speed testing or any purposes in connection with motor trade.

    (B) COMMERCIAL VEHICLE

    The vehicles that fall under this cover will include the under mentioned category:

  • Goods carrying vehicles – own goods
  • Goods carrying vehicles – for hire or reward
  • Hire cars
  • Hire cars: hirer driving
  • Buses
  • Special type: Bull dozer, Angle dozer, caterpillars etc.
  • Motor Trade Vehicles:-These are un-registered new vehicles owned by a corporate organization engaged in sales, services and repairs of vehicles
  • Special Body Vehicles: These include vehicles specially designed and modified for special usages such as towing and recovery, ambulances, mobile shop refrigerator body, cinema or exhibition, fire fighting and armored body, harvester and agricultural tractors.
  • (C) MOTOR CYCLE

    For the purpose of insurance cover/underwriting the following will be within the purview of motorcycle policy.

  • Any mechanically self-propelled two wheeled vehicle
  • Any mechanically assisted vehicle with an engine capacity not exceeding 100cc and designed to be propelled by pedals.
  • Any three wheeled /Van with maximum carrying capacity of 6 cwts
  • Side Cars (attached to protect the rider and passenger) is regarded as part of the motorcycle.
  • Motorcycles are divided into 2:

  • Private cycles (with or without sidecars) used purely for social, domestic and pleasure purposes as well as in connection with insured’s business.
  • Commercial cycles (with or without side cars) and three-wheeled vans (with a cubic capacity of 6 cwts) used for social, domestic and pleasure purposes and for insured’s business including carriage of goods and or passengers for hire or reward.