Third party cover, a golden shock absorber
Compulsory motor vehicle liability insurance was introduced in British India and a majority of Indian states from July 1, 1946.
Encountering a traffic accident is traumatic. On the first day of my new job, I was heading to an insurance company office for a meeting. Right in front of the building, I was knocked off my bike. All I remember is escaping from a bus driving behind me. Many are not so fortunate. In a moment, they would be looking at the damage, the injuries, the death …
The owner of the vehicle responsible for them assumes responsibility for them. No driver of a vehicle would intentionally injure anyone, let alone himself. Yet 17 people are dying every hour in India from traffic accidents. India accounts for only 1% of the world’s automobile population, but 6% of road accidents. Law enforcement is lax, as is our compliance. Even those who comply are endangered by those who do not.
Compulsory motor vehicle liability insurance was introduced in British India and in a majority of Indian states from July 1, 1946. This social legislation continues today and protects both the insured owner of the vehicle and the owner. third party who suffered the loss. .
Claims under this policy must be made by the third party or its legal heirs (the claimant / s) and this may be under one or more of the three categories of loss namely property damage, bodily injury or death. .
The applicant must obtain a first information report (FIR) from the police station having jurisdiction over the scene of the accident and collect a charge sheet. For this, the registration number of the offending vehicle and details of the insurance policy, if possible, and proof of identity of the applicant are required.
A petition must be filed with a special tribunal for traffic accident claims called the Traffic Accident Claims Tribunal (MACT). For the petition, other documents may be required depending on the type of complaint.
For property damage claims, an investigation report and documents to establish the cost of the damage are required. For bodily injury claims, original treatment invoices and medical records, disability certificate, if applicable, proof of age and income of the injured person (s) will be required.
For death claims, the documents required are an identity document of the deceased and of the beneficiaries, documents establishing the legal inheritance of the latter and documents establishing the diplomas, income and age of the deceased. MACT registers a case and summons the parties involved, including the insurance company of the vehicle that caused the accident.
Before moving on to other procedural details, here is an overview of the compensation matrix under the TP cover. For third party property damage (TP), the compensation determined by MACT will be paid by the insurance company up to 7.5 lakh. Any compensation beyond this is the responsibility of the insured. For injury and death claims, the liability of the policy is unlimited, which means that the insurance company will pay the full amount of compensation awarded by MACT. Compensation can be very large and is a factor in the age and earning capacity of the deceased accident victim.
This unlimited liability clause protects the victim and his family from any incapacity or refusal of compensation on the part of the owner of the vehicle. For the owner of the insured vehicle, the TP policy is a huge burden on their shoulders and this is not a trivial matter. In addition, all legal work and costs are the responsibility of the insurance company. TP policy is worth its weight in gold.
(The writer is a business journalist specializing in insurance and corporate history)