There are two sections
within a comprehensive motor
policy-own damage section and third-party section
(3rd Part Section).
Own Damage section is voluntary insurance
based on the Insured Declared Value (IDV) opted by the insured while 3rd
Party section is compulsory under the provisions of the Motor Vehicles Act 1988
(MV Act).
While own damage section takes care of
damage to the motor vehicle due to accidents, Act of God perils, etc., the third-party
section covers third party property damages and bodily injuries.
Details of third-party
cover in motor insurance:
Third
party cover: Third-party insurance, is called as ‘Act Only’ insurance as it is
a statutory requirement for all vehicle owners as per the Motor Vehicle Act. This
policy covers accident, loss of life and damage
to the third-party vehicle due to accident.
Section 146 of the Motor
Vehicles Act makes it compulsory for the owners of vehicles to get their vehicles
insured against third party risks. Third party means an unknown party who can
be affected by the operation of the insured vehicle. Third
party includes the opposite party plying vehicles on the road. Vehicle owners
are liable to compensate for the loss of life or damages to the property,
including vehicle of a third party if the policyholder’s vehicle causes the
accident. Damage to own vehicle is not
covered under this policy.
What does third party insurance cover?
This policy covers any accident where the insured shall become
legally liable to pay in respect of:
a. Death of or bodily injury to any person
including occupants carried in the insured vehicle.
b. Damage to property other than property
belonging to the insured or held in trust or in the custody or control of the
insured.
If the vehicle of ‘A’ hits or collides with
another vehicle then ‘A’ is liable to pay for the damages caused to another
vehicle due to the operation of his vehicle. In short, the policy that ‘A’ has
taken will pay for the damages or injuries caused to the opposite vehicle or
persons.
Claim process
Motor claims have to be
supported by appropriate documents of the claim. The claim form must be
immediately submitted to the insurance company by the aggrieved party following
which the claim is made on the insurance company which has insured the vehicle
that caused the accident.
Accident
must be reported to the nearest police station and one should take pictures of
the accident scene and file the complaint.
Based on the
complaint police shall register an FIR, investigate and then charge-sheet the
accused. The policy number of the offending vehicle is noted and the insurance
company that has insured the offending vehicle is notified. The case needs to
be filed under Motor Accidents Claims Tribunal (MACT). MACT’s are quasi
judicial authorities which operate under each state.
The legal
process of appropriate compensation for the victim is decided by the MACT. The
commissioner for MACT will hear both the sides and pass an award taking into
the account the age, income and dependency factor of the victim / deceased.
These claims
that are filed in MACT can be settled out of court through Lok Adalats. Here
both parties agree to an amount as compensation and the claim is settled. This
process eases the claim settlement and the relief is quicker compared to the time-consuming
process of courts.
Who can claim compensation
in motor accident cases?
Claim for compensation can be made by:
1.
By the person who has sustained
the injury.
2.
By the owner of the property where
death has resulted from the motor accident.
3.
By all or any of the legal
representatives of the deceased.
4.
By any agent duly authorized by
the person injured or all or any of the legal representatives of the deceased,
as the case may be.
Where can
compensation be claimed?
Claim Petition can be
filed –
· to
the Claims Tribunal having jurisdiction over the area in which the accident
occurred or,
· to
the Claims Tribunal within the local limits of whose jurisdiction the claimant
resides, or carries on business or,
· within
the local limits of whose jurisdiction the defendant resides. Insurer is also a party to the Claims
case.
Other modes of
immediate relief to victims
No fault liability:
Motor Vehicles Act imposes no fault liability on the owner of
the motor vehicle. Section 140 of the Act lays down the principle of “no fault
liability”. According to this principle the liability of paying compensation is
imposed on the owner of the motor vehicles even if no fault exists in relation
to the accident.
This method of
compensation provides immediate relief to the victims of accidents who have
died or were permanently disabled due to the accident.
The compensation to be
paid in case of no-fault liability is:
·
Rs 50000 in case
of Death.
·
Rs 25000 in case
of permanent disablement.
Hit and run
motor accident: Hit and Run motor accidents has been defined in Section
161(1)(b) of the Motor Vehicles Act. “Hit
and run motor accident” means an accident arising out of the use of a motor
vehicle or motor vehicles the identity whereof cannot be ascertained in spite
of reasonable efforts for the purpose.
One of the essential elements
of a “hit and run motor accident” is that the vehicle which caused the accident
is untraceable. Upon the vehicle
been certified to be untraceable by the police the compensation is released.
Solatium
fund was created by the government for the victims of hit and
run motor accident.
The amount of compensation
is-
·
Rs 200000 in
case of death
·
Rs 50000 in case
of grievous hurt
Structured formula basis: Section
163 A of the Motor Vehicles Act deals with special provisions as to payment of
compensation on structured formula basis.
The owner of the vehicle shall be liable to pay in case of death
and permanent disability caused because of accident by the motor vehicle of the
owner.
The
claimant who is seeking compensation in case of death or permanent disability
caused by motor vehicle, is not required to plead or establish that the death
or permanent disablement was due to any wrongful act or neglect or default of
the owner of the vehicle.
Compensation
is paid as per formula based on the age, earning capacity of the victim / deceased.
The
benefit in this type of compensation is one can avoid lengthy court
proceedings, delay in receipt of relief due, etc., However once payment is made
under structured formula basis, claim is closed between both parties. No
further claim will be entertained.
Where a
person is entitled to claim compensation under section 140 and section 163-A,
he shall file the claim under either of the said sections and not under both.
Third-party insurance does
not provide any compensation, if:
·
The accident was caused due to drunken driving
·
The driver is under aged or was found guilty of driving without a
valid driving license
·
The accident was a deliberate act
·
The vehicle was used for any commercial purposes or illegal
activities
·
The vehicle is a stolen one
In these cases, the recourse
to victims of accidents shall be through appropriate civil proceedings against
the opposite party.
We at Zen Insurance assist in a complete understanding of the various
insurance covers offered and help you in the insurance process. Contact us for
assistance.
Disclaimer:
Zen Insurance Brokers is an IRDAI registered broker which facilitates
quick & accurate insurance broking services. We deal with only
regulator approved products of insurers. We do not underwrite the products.
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