Extra benefits in policies on private cars
(i) Personal Accident Insurance
A comprehensive policy in addition to the coverage mentioned above also confers extra benefits for which the insured has to pay extra premiums. He may include ‘personal accident insurance, ’ by which the company undertakes to indemnity the insured or a named person, in case of death, bodily injury resulting in (i) loss of two limbs or sight of two eyes or loss of one limb and sight of one eye, or (ii) loss of one limb or sight of one eye and temporary total disablement. The measures of indemnity in these different cases are fixed in a table and premium is charged according to the indemnity desired by the insured. In the first two cases, i. e. , death and bodily injury the indemnity is a lump sum while in case of temporary total disablement it will be in periodical payments upto a stated number of installments. The insured can ir1sure his wife too for the above causalities. The benefits are available to the insured not under 16 and not above 65 years of age. Similarly the personal accident insurance can also be taken on unnamed passengers in the insured car.
(ii) Riots, Strikes, etc.
Loss of or damage t’, the car occasioned by strike, riot and civil commotion can also be covered by paying extra premium. The company reserves to itself the right to alter this premium without notice.
(iii) Loss of rugs, etc.
Loss of rugs, coats or luggage by theft, larceny or fire with a stated limit for any one loss can be covered by paying extra premiums.
In case of commercial vehicles, the extra benefits are in form of increased third party indemnity, and riots and civil commotion. In case of motor-cycle insurance, the extra benefit can be of personal accidents.
The person desirous of taking a motor insurance has to approach an insurance company asking for a proposal form for the particular type of vehicle which he wants to insure. For private cars , commercial vehicles and motor cycles different proposal forms are used. The specimen proposal forms for the insurance of the first two vehicles are given at the end of this article. Proposal form for insurance of motor cycles is similar to that for private cars. The proposer must carefully answer all the questions which are mentioned in the proposal form. It will be on the basis of his answers that the risk will be assessed and the premium will be fixed. Non-disclosure about any material fact will entitle the company to repudiate the liability.
The questions in the different proposal forms differ because they relate to the different vehicles. The first part of the questions relates to the identification of the vehicle such as the registered letters and number, make, horse power, type of body, year of manufacture, seating or carrying capacity as the case may be, present estimated value, etc. The second part of the proposal form deals with questions the answers to which will determine the risk so that an appropriate premium may be fixed. These questions are with regard to the use to which the vehicle is put, its equipment, past insurance, type of policy desired and risks to be covered, etc.
At the end of the proposal form there is the declaration about the truth and completeness of the statements made in the proposal form by the proposer and this declaration is made the basis of contract between the assured and the insurance company subject to the conditions prescribed in the policy.
When the proposal form is received by the company it will fix the premium rate. If the company is a tariff office, it will consult the rating book issued by the Tariff Association, which contains schedules of rates for different vehicles for different policies. Each member company charges the rates according to the schedule for the particular vehicle under a particular policy. The company will first find out the “basic premium” from the schedule and then add to it the amounts for additional risks or subtract from it the rebates allowed for excluding certain risks. The final amount will be the premium charged from the insured.
In case of Act and Third Party Policies, it is the horsepower which determines the premium for private cars and motor cycles, and for the comprehensive policies horsepower and the value of the vehicle are the principal factors for fixing the premium.
If the owner or a named person is to drive the car, a rebate of the premium is allowed because of lower mileage. A rebate is also allowed if the insured agrees to bear a particular first portion of each claim for damage to the insured car. Similarly if one owner possesses more than one car and all of them are insured the company will allow a rebate. Further, if the insured is the member of any recognized Automobile Association, a rebate of 10 p. c. is allowed.
In rating the Commercial Vehicles , the procedure is a little complicated one. It will depend on the type of vehicle, its carrying capacity, vehicle hauling trailor or not, value, risks covered, etc. Different rates are charged for town and mofussil areas. The rebates are allowed in case of commercial vehicles and motor cycles on the same grounds as those mentioned in case of private cars.