How To Claim Road Accident Compensation (Part 4) – Motor Insurance

By Source : Akosha

Published: Wednesday, July 6, 2011, 12:20 [IST]

Motor Insurance - The Basics

In order to ensure that victim of a vehicle accident is always compensated, the law requires every person who uses a vehicle or allows someone else to use a motor vehicle to compulsorily take third party motor insurance policy. The object of this type of policy is to protect the motor vehicle user against any liability arising to third parties out of an accident caused by the use of the vehicle in a public place. Third party means a person other than the parties to the contract of motor insurance. For example, a person taking a lift (gratuitous passenger) in a vehicle (not being a good carriage) is a third party and if an accident is caused due to the negligence of the driver, the gratuitous passenger can claim road accident compensation.

In practice, third party insurance is part of the comprehensive motor insurance offered by insurance firms. The comprehensive motor insurance policy covers, along with third party liability insurance, any damage or loss to the insured vehicle and a personal accident cover for the insured while he is driving. The legal requirement to have insurance is only with respect to third party liability insurance, and therefore with regard to the other two aspects, the insurance companies can contractually impose conditions for insurance and limit of their liability. However, no such freedom is given to insurance companies with respect to third party insurance.

Once a victim has made an application to the Claims Tribunal for road accident compensation and the Tribunal has awarded him the road accident compensation amount, it is the obligation of the insurance company to pay this amount to the victim. The insurance company cannot at that point say that it is entitled to cancel the policy.

The tribunal at the time of awarding the road accident compensation itself will state whether owner has to pay it or insurance company. Generally, it is not the owner of the vehicle rather the insurance company that has to pay the road accident compensation amount where the person driving the vehicle (e.g. a chauffeur) had the requisite license to drive and at the time of an accident the vehicle was used in accordance with the conditions of its insurance (for instance, the private car is used only for personal travel and not to ferry passengers like a taxi service). Though the owner must be prompt to give notice to the insurance company of occurrence of accident and should also ensure to appear before the tribunal to contest the cases along with the driver whenever needed.

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