Not renewing the vehicle insurance especially third party insurance cover could land you in serious trouble in case of an accident. The officials of general insurance companies reveal that 60 percent of two wheeler owners fail to renew the insurance cover. As per the rules, a vehicle which is rolling out on the road has to be insured due to which all the newly purchased vehicles are insured. The costumer has to renew the cover annually and it is where due to a variety of reasons people fail to renew the cover and pay heavy price in case of any accident. Comprehensive cover and Third Party cover are the two types of insurance covers. In the former the vehicle is insured for theft, accident and any damage while in later the vehicle is insured for any third party damage done due to it.
Explaining third party insurance, the Senior Branch Manager (SBM) of United India Insurance Company, V S Kunwar told The Pioneer that it is an insurance policy purchased by insured (First party) from an insurance company (second party) for protection against another party’s claim (third party). If it is established that the damage of life or otherwise is caused by the fault of driver of the vehicle owner then the insurance company pays the claim under third party insurance cover. “People generally are careless to renew their third party insurance cover which can be very costly. This type of insurance cover is the cheapest with an annual premium of `400-500 for two wheelers and 1500-2500 for four wheelers”, he said. Under the Motor Vehicle (MV) Act, there is an unlimited liability on the driver of vehicle in case of an accident. The claims of accidents cases are settled in the court of the Motor Accidents Claims Tribunal (MACT).
Senior advocate Anil Gandhi said that the MACT courts are in all the district and the case take at least three to four years to settle. If it is established by the police investigation that the accidental death/ disability is caused by the negligent driving of the other vehicle then the court awards compensation which is calculated on the basis of life expectancy of the deceased multiplied by his income. The income for the purpose of this calculation is 50 percent of the actual income which the deceased used to receive. The State of health of the individual and his dependents too has the bearing on the decision. In case of accident the onus of paying the compensation amount falls on the driver of the vehicle involved in the accident if the vehicle is not under third party cover. Sometimes the amount of compensation could be very high.
In hit and run cases- where the identity of the vehicle causing accident is not known- the compensation is paid by a special fund constituted under section 163 of motor vehicles act 1988 which is termed ‘Solatium fund’.
The amount of compensation is such cases are `50000 in case of death and `25000 in case of permanent disability.