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Information about Classification of Vehicles Insured

Act Policy

An Act Policy covers all risks for which a policy is necessarily to be taken by the owner of a vehicle under the Motor Vehicles Act. According to this Act, a policy must be taken to cover any liability which may be incurred by the insured in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. The extent of the amount to which a policy should be taken is also specified in the Act. Again a policy of insurance is also necessary to cover any liability arising under the provisions of the Workmen’s Compensation Act 1923, in respect of the death of or bodily injury to any paid employee engaged in driving or otherwise in attendance on or being carried in a motor vehicle. All these provisions together with the exceptions are printed on the policy itself. It should be seen that insurance is compulsory as to personal injury only and not as to damage to property.

Third Party Policy

This policy covers not only those third party risks for which an insurance policy is legally necessary as explained above but also covers such risks for which the insured may be held liable under various laws, such as Fatal Accidents Act 1855 and common law. Here the policy includes also the damage to property of third parties for which the insured is liable. The insurer undertakes to pay in addition to the compensation, all sums including claimant’s costs and expenses for which the insured becomes legally liable.

Comprehensive Policy

A comprehensive policy covers a wide variety of risks under single coverage. There are some very common risks which alone are covered by this policy and if any other risk is to be covered it can be added to the risks insured after the payment of extra premiums. A comprehensive policy for private cars usually covers the following risks:

(a) Loss of or damage to car. The car including necessary Lamps, Tyre’s, and Accessories thereon is insured against loss or damage by accidental external means, fire, explosion, self-ignition, lightning, frost, burglary, housebreaking, theft, malicious act and in transit by road, rail, inland waterway, lift or elevator.

(b) Removal charges in respect of removal of the car to and from the premises of the nearest repairers for any accident up to a certain limit.

(c) Third party liability, i.e., risks covered in third party policy.

(d) Costs and expenses incurred with the consent of the company.

(e) Repair charges for the car due to accident for which company is liable upto a certain limit.

(f) Medical Expenses up to a certain limit incurred in connection with injuries sustained by the insured or any occupant of the car.