Know your motor insurance policy?

A motor insurance policy is mandatory for every vehicle owner in the country. With such importance attributed towards it, one must be thoroughly aware the aspects of it. Typically motor insurance policies are of three types.

Comprehensive policy: as the name implies, this motor insurance policy provides cover to all the arising legal liability. This means that it applies to third parties under common law, Total Accident Act and Motor vehicle Act. It also provides for damage or loss to the vehicle. This policy also covers all kinds of risk that finds it mention into the private car tariff.

Third party policy: a typical policy of this kind cover all the risks that are mentioned in the Motor Vehicle Act and a few more. The insurance provider undertakes on the behalf of the insured to pay the liability, expenses and costs that the policy holder is liable of. The main aim of the policy is to safeguard the insured in case of accident, personal injuries or death caused by the insured’s vehicle. In addition to this, the policy also covers the damage that is caused to the property of third parties. Moreover, the policy can also be used to provide cover in the event of theft or loss due to fire by paying additional premium.

Act Only Policy: as the name implies, the policy is mandatory under the Motor vehicle Act, the act that applies to all vehicle owners who play their vehicle on public properties. In such policies the risk of damage to property or third party’s body is included. The policy or the amount is fixed by the Motor Vehicles Act. The act makes it mandatory for the insured to provide cover for the risk of property and life of the employee driving the vehicle. This risk is covered under the Workmen’s Compensation Act in India.