First Pages Motor Insu2.docx

MOTOR INSURANCE A project submitted to University of Mumbai for partial completion of the degree of Master in Commerce Under the Faculty of Commerce

SUBMITTED BY MISS.PRIYANKA SHRIKANT SATAM

.Under the Guidance of PROF. PANKAJ JAIN

PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE & ECONOMICS SUNDAR NAGAR, S.V.ROAD, MALAD (WEST) MUMBAI 400 064

DECEMBER 2018

Prahladrai Dalmia Lions College of Commerce & Economics Sunder Nagar, Malad (West) ,Mumbai, 400 064

CERTIFICATE This is to certify that Ms. Priyanka Shrikant Satam has worked and duly completed her/his Project Work for the degree of Master in Commerce under the Faculty of Commerce in the subject of Accountancy/ Management and her/his project is entitled, Motor Insurance under my supervision. I further certify that the entire work has been done by the learner under the guidance and that no part of it has been submitted previously for any Degree or Diploma of any University. It is her / his own work and facts reported by her/ his personal finding and investigations.

Signature

Prof. Pankaj Jain Date of Submission: 15th December, 2018

INDEX Chapter No.

Title

Page no.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Introduction Of Insurance Indian Insurance Global Context Since 1991 Advantages Of Insurance Disadvantages Of Insurance Types Of Insurance Introduction Of Motor Insurance Advantages Of Motor Insurance Disadvantages Of Motor Insurance Problem Of Motor Insurance In India Features Of Motor Insurance Types Of Motor Insurance Emerging Scenario Regarding Car Insurance In India Research Methodology & Review of Literature Suggestion Conclusion Bibliography & Webliography

1-3 4 5 6 7-9 10-11 12 13 14-20 21-22 23-24 27-28 29-30 31-33 34-35 36-37

ACKNOWLEDGEMENT To list to who all helped me is difficult because they are so numerous and the depth is so enormous. I would like to acknowledge the following as being idealistic channel and fresh dimension and completion of project. I take this opportunity to thank the University of Mumbai for giving me chance to do this project. I would like to thank my Principal, Dr. N.N. Pandey and our VicePrincipal Prof.Subhashini Naikar for providing the necessary facilities required for completion of this project. I take this opportunity to thank our Co-ordinator and Project guide Prof. Pankaj Jain for his moral support and guidance. I would like to thank my college library for having provided various reference books and magazines related to my project. Lastly I would like to thank each and every person directly or indirectly helped me in the completion of the project, especially my Parents and my peers who supported me through out of my project.

Priyanka Shrikant Satam

MOTOR INSURANCE

CHAPTER 1. INTRODUTION OF INSURANCE Meaning of Insurance Insurance is a term in law and economics. It is something people buy to protect every month) and promise to be careful (a "duty of care"). Insurance is an arrangement in which you pay money to a company, and they provide financial protection for your property, life, or health, paying you in case of death, loss, or damage. For insurance purposes the word "disability" will have a special and particular meaning which will be defined in the policy concerned. Insurance is a financial product sold by insurance companies to safeguard you and / or your property against the risk of loss, damage or theft (such as flooding, burglary or an accident).An insurance policy is the contract that you take out with an insurer to protect you against specific risks under agreed terms. Human life is full of risks. The effective solution of reducing the burden of these risks or losses is "Insurance-. Insurance is described as a social device to reduce or eliminate risks of loss to life and property. It is a provision. Which a prudent man makes against inevitable continues. Loss or misfortune. No one can predict when an accident will occur or a fire will break out or a ship will sink. Therefore to avoid risks, insurance is necessary. Insurance works on the basic principle of risk-sharing. The Principle meaning of insurance is to share the loss of each member of society on the basis of probability of loss to their risk'. It is the method to provide security against losses to the insured. Insurance provides financial protection against a loss arising out of happening of an uncertain event. Premium is collected by insurance companies which also act as trustee to the pool. A person can avail this protection by pay premium to an insurance company. The systematic

pool is created through contributions made by persons seeking to protect themselves from common risks. Any loss to the insured in case of happening of an uncertain event is paid out of this pool. Basically, insurance is a sum of money as a premium is paid by the insured in considerations of the insurer bearing the risk of paving a large sum upon a given contingency. The compensation will be made in a certain definite sum i.e. loss or the policy amount whichever may be and the payment is made only upon a contingency.

Definition A contract whereby for specified consideration, one party undertakes to c ompensate theother for a loss relating to aparticular subject as a result of the occurrence of designatedhazards. Insurance is an arrangement in which you regularly pay money to a company, and they pay you if something bad happens to you or your property. Insurance is a policy that provides financial protection for your property, life, or health, paying you in case of death, loss, or damage. Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. The amount of money charged by the insurer to the insured for the coverage set forth in the insurance policy is called the premium. A contract under which one part (the insurer) accepts significant insurance risk from another part (the policy holder) agreeing to compensate the policies holder if specified. As insurance is contract of good faith. The proponent is bound to fully disclose to the insurer all information about the contract and not only that which the proponent thinks necessary. The Non-disclosure, Misrepresentation of information or intention to defraud etc. Which is leading to the materialization of contract in insurance will be an automatically discharge the insurer from all contractual liabilities. The organization agrees to pay fixed premium and in return the insurance company agrees to meet am losses which fall

within the terms of the policy. This is the risk transfer mechanism and which is one of immense value not only to but also to individuals. The contract that makes it obligatory for the insurer to pay the claim based on a specific. Insured future event that adversely affects the insured or the policyholders. And other instruments that do not transfer significant insurance risk will be treated as financial instruments under the relevant international accounting standards norms of the country. General Definitions:- I hence are conceived by writers ho perceive insurance as an instrument to manage and mitigate various risks associated with human activities, including one's own life. In other words, for an individual or a business. "Insurance is an economic device. Substitutes a laree and unspecified financial loss. A loss one should had to absorb but for the existence of insurance. Contractual Definitions :- Contractual definitions perceive "Insurance as a legally enforceable contact of indemnity to indemnify losses that occur due to the occurrence of the given contingencies insured against." As the contract is between the parties competent to contract. It has legal enforcement and is subject to the various national and international laws in force at the time and place of the occurrence of the event leading to the loss.

CHAPTER 2. INDIAN INSURANCE GLOBAL CONTEXT SINCE 1991 Since 1991. The economic reform in India opened up the insurance market to private companies in terms of global context. The process of globalization in insurance sector involved the gradual removal of exchange barriers and free flow of insurance services. Along with wider access to information and technology services for insurance sector in India lead to expansion of insurance business in India. Globalization and liberalization process benefited the Indian insurance market. It opened new investment opportunities for life and pension fund managers. And with it came regulations governing the solvency and investment norms to safeguard the interest of the policyholders. Indian insurance market became a competitive market. Companies started to offer better yield to policyholders and annuitants. His also brought sophistication in the process of management techniques to the Indian insurance sector. The government of India appointed the Malhothra committee in 1993. Which recommended private sector to enter I l) Indian Insurance market. Government accepted recommendations. And allowed private sector to offer insurance cover to Indian citizens as per IRDA act 1 999

CHAPTER 3. ADVANTAGES OF INSURANCE Advantages of insurance: 1) Insurance provides economic and finanicial protection to the insured against the unexpected losses in consideration of nominal amount called premium. 2) Insurance provides financial protection against an unexpected risk of losses due to which people can maintain their living standard. The insurance company provides a safeguard in terms of money to avoid the unfortunate financial crisis. 3) An insured person pays the amount of premium in time as stated in the agreement which encourages for developing a saving habit of persons. Hence, insurance is a means of encouraging regular saving as it helps to reduce unnecessary expenses. 4) Insurance companies collect premium through life or nonlife policies which are invested in various development areas like trade and industry. Such investment helps to promote trade and industry in the country. Ultimately, it helps for the economic development of the country.

CHAPTER 4. DISADVANTAGES OF INSURANCE Disadvantages of Insurance: 1) It does not compensate all types of losses which caused business to insured by insurance company. 2) It takes more time to provide financial compensation because lengthy legal formalities. 3) Although insurance encourages savings, it does not provide the facilities that are provided by bank. 4) It inetentionally tries to compensate as less as possible to the sufferer with the aim of maximizing profit rather than maximizing well-being of the insured.

CHAPTER 5. TYPES OF INSURANCE

LIFE INSURACNE 1) Term Life 2) Whole Life Insurance 3) Endowment Policy 4) Money Back Policy 5) Unit-Linked Insurance Policy 6) Child Plans 7) Pension Plans GENERAL INSURANCE 1) 2) 3) 4)

Motor Insurance Home Insurance Health Insurance Fire Insurance

LIFE INSURANCE: Life insurance is a contract that offers financial compensation in case of death or disability. Some life insurance policies even offer financial compensation after retirement or a certain period of time. Life insurance, thus, helps your family’s financial security even in your absence. 1) Term Life - It is the most basic type of insurance. It covers you for a specific period. Your family gets a lump-sum amount in the

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case of your death. If, however you survive the term, no money will be paid to you or your family. Whole Life Insurance - It covers you for a lifetime. Your family receives a certain sum of money after your death. They will also be entitled to a bonus that often accrues on such amount. Endowment Policy – Like a term policy, it is also valid for a certain period. A lump-sum amount will be paid to your family in the event of your death. Unlike a term plan, you get the maturity proceeds after the term period. Money-back policy – After the expiry of the term, you get the balance amount as maturity proceeds. Your family gets the entire sum assured in case of death during the policy period. This is regardless of the survival benefit payments made. Unit-linked Insurance Plans – Such products double up as investment tools. A part of your premium goes towards your insurance cover. The remaining amount is invested in Debt and Equity. A lump-sum amount will be paid to your family in the event of your death. Child Plan – This ensures your child’s financial security. In the event of your death, your child gets a lump-sum amount. The ensures pays the premium amounts of your death. Your child will continue get a certain sum of money at specific intervals. Pension Plans – This helps build your retirement fund. You can get a regular pension amount after retirement. In the case of your death, your family can claim the sum assured.

GENERAL INSURANCE: A general insurance is a contract that offers financial compensation on any loss other than death. It insures everything apart from life. A general insurance compensates you for financial loss due to liabilities related to your house, car, bike, health, travel, etc. 1) Motor Insurance - Motor insurance is for your car or bike what health insurance is for your health. t is a general insurance cover that offers financial protection to your vehicles from loss due to accidents, damage, theft, fire or natural calamities.

2) Home Insurance - Home insurance is a cover that pays or compensates you for damage to your home due to natural calamities, man-made disasters or other threats. 3) Health Insurance - This type of general insurance covers the cost of medical care. It pays for or reimburses the amount you pay towards the treatment of any injury or illness. 4) Fire Insurance - Fire insurance pays or compensates for the damages caused to your property or goods due to fire. It covers the replacement, reconstruction or repair expenses of the insured property as well as the surrounding structures. It also covers the damages caused to a third-party property due to fire.

CHAPTER 6. INTRODUCTION OF MOTOR INSURANCE Meaning of Motor Insurance: Motor vehicle insurance, also called automotive insurance, a contract by which the insurer assumes the risk of any loss the owner or operator of a car may incur through damage to property or persons as the result of an accident. Motor insurance is a coverage which is bought for cars, trucks and other vehicles that ply on roads. Its main objective is to give complete protection against physical damage or loss from natural and man-made calamities. In India, motor insurance mandatory to ply a vehicle on road. Motor vehicle insurance, also called automotive insurance, a contract by which the insurer assumes the risk of any loss the owner or operator of a car may incur through damage to property or persons as the result of an accident. There are many specific forms of motor vehicle insurance. Varying not only in the kinds of risk that they cover but also in the legal principles underlying them.

Definition of Motor Insurance: Motor insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy. Property such as damage to or theft of your motor. Motor insurance is one of the most popular general insurance policy in India According to Indian law purchasing motor insurance is legally mandatory. There are two types of motor insurance policy available in India in terms of coverage the benefits of purchasing a motor insurance policy are as follows: 1) It will covers the financial losses in different

ways. 2) If the car gets stolen or damaged or any accidents occurs then the policy holder will get the coverage for the financial losses of the car.

CHAPTER 7. ADVANTAGAES OF MOTOR INSURANCE Advantages of Motor Insurance: There are many advantages to motor insurance. Having a travel insurance is not only mandatory but also very beneficial. Below are a few advantages of having a motor insurance: 

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Safety From Natural Calamities - It offers the coverage for the repair work for the damages arising due to any of the natural calamities such as earthquake, fire, cyclone, flood, landslide, storm, etc. Safety From Man-made Calamities - Having a motor insurance ensures financial protection that might arise from any man-made incidents like burglary, strikes, theft, accidents, etc Protection of Your Legal Interests - Your insurance plan provides coverage against the liabilities arising due to any bodily injury or damage caused to a third-party person or property. A Complete Sense of Security - Having a motor insurance gives you a sense of security so that you can ride your vehicle with confidence. In addition to that, it saves you from the fines imposed by the traffic police. Other Advantages - No stress of Damage, Cover for medical expenses, Compulsory by Law, Easy in Replacing or repairing parts, Compensating monetary losses

CHAPTER 8. DISADVANTAGAES OF MOTOR INSURANCE

Disadvantages of Motor Insurance:  Vehicle Service Contracts often covers on part of the repair- In most cases, vehicle service contracts will only cover part of the cost. Most such plans involve only a specific part of the car, which means that you will have to shell out some more money out of your own pocket in order to deal with other parts of the car.  Vehicle Service Contracts add to existing insurance costs Most car owners already have to deal with exorbitant insurance fees just to get car street legal. Add to that the burden of a vehicle service contracts, and the total cost may just be less palatable even given the advantages of a vehicle service contract.  Insurance claim issues - If you have had any kind experience with insurance claims in the past, you already know that the process is anything but simple. It often seems as if insurance agents are your best friends when they are getting you to sign up for a policy, but watch how quickly things turn around when it comes time to collect on a claim. Even if you pay your insurance premiums religiously, there is a chance that your claim might not be covered due to some clause in the contract that you neglected to read or failed to understand.  The Long Wait - Even if you do manage to get a favourable resolution to your claim, you might be in for a long wait before you actually get any money for the repair. A common scenario involves the car owner paying for the cost of getting the car fixed beforehand, only to run into considerable difficulty getting reimbursed later on.

CHAPTER 9.PROBLEMS OF MOTOR INSURANCE IN INDIA From reviewing literatures various problems related to Indian motor insurance was revealed, that negative results of this segment are full by increased severity of claims, brutal competition, regulation, increased frequency of law suits, high jury awards, inflation, increase in auto thefts and improper fraud management that all are contributing substantially to make the bottom lines red for motor insurance companies. 1) Problems Related To Motor Insurance Companies  Motor tariff rates -The problem of motor vehicle insurance

companies are that they were facing continuously adverse claim experience through its statutory legal liability section. A large amount of motor vehicle insurance was taken but commercial vehicles owners have heavy incidence of claims for several years. The commercial motor vehicles owners were not in the favour of increasing motor tariff rate and most of the times they oppose this through stikes. Several measures were taken by various committee to solve the issue related to motor tariff rate but nothing yet to be done.  Invalid motor insurance- The another challenge that motor

insurance sector facing is invalid motor insurance. Several vehicles that ply on Indian roads do not carry a valid insurance (reasonable estimates put it anywhere around 40 % of them) is one that needs to be taken seriously and tackled at the right places. This alone could be a major factor for the Motor portfolio to bleed year after year.  Changing customer needs and preferences- In this scenario

non-life insurance companies are witnessing changing customer

needs and preferences in motor insurance policies, which is their largest business segment. Now customers no longer want plain vanilla insurance policies that just cover their car, truck or two wheeler, but are increasingly asking for service based insurance coverage and insurance companies are lacking in fullfilling this requirement.  Underinsurance- According to estimates, around 40 per cent cars

and 70 per cent two wheelers are underinsured. The traditional distribution channels have failed to spread the insurance beyond a point. Since the premium of an insurance policy for a two-wheeler is less than Rs1,000, agents do not consider it a lucrative business Due to lower commissions.  Limited data for pricing-The other challenge faced by insurers is

that there is not enough data to help them in pricing a risk. According to a report published in 2012 by the Road Transport Authority, the driver‘s fault account for a whopping 77.5 % of the total road accidents. Yet the pricing is based more on the year of manufacture of the vehicle, engine capacity, price and the zone in which the vehicle is bought and less on the age, occupation and credit score of the driver and usage of the vehicle.  Lack of awareness- In today’s world the problem faced by motor

insurance business markets is not a shortage of goods (insurance products) but a shortage of customers. This arises due to lack of awareness and understanding on the customers side. Insurance is

PEOPLE‘S BUSINESS. Insurers are dealing with people who are their policyholders, claimants, intermediaries, beneficiaries and even employees. Insurance is sold and seldom brought. Insurance selling is complex & difficult. Motor insurance customers are aware about the basic coverage of the policy but they are unaware about the claim, excess and bonus Related to policy.  Negligent motorists- In India many cases are there where innocent

persons who are injured in auto accidents are unable to recover financial damages from the negligent motorists who injured them. Although accident victims may have bodily injuries or suffer property damage, they may recover nothing or receive less than Full indemnification.  Immature surveyors and loss assessors- Motor accident claims

are the most common amongst different types of claims, arriving out of various policies; but unfortunately, they are being handled by immature surveyors and loss assessors. These motor claims are receiving the least attention of the industry, and as a result everybody is facing a lot of problems while processing such claims. Probably, it is the only subject, out of many branches of the general insurance industry which does not have any guideline whatsoever.8  Lack of basic technical knowledge- Most of the staff members

processing the claims and scrutinising the survey report do not have

any basic technical knowledge on the structure of vehicles, in the absence of which they blindly believe whatever is stated in the survey report. 9  Excessive cost and payouts- Excessive cost and continuous

payouts trends are the factor that creates problem for Indian public sector

motor insurance companies. Their cost exceeds their

collected premium.10  Low profitability-Another challenge is low profitability in the

motor insurance segment. Factors which were responsible for low profitability were•

Cash flow underwriting,

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Lack of control on underwriters high acquisition cost and soaring management expenses,

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Growing automobiles theft due to high repair and replacement schedule

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Fraudulent claims

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Inadequate database to enable actuarial calculations for risk assessment and rating of different groups of vehicles,

 Unethical Practice- In India it was seen that sometimes motor

insurance policyholders adopting fraudulent practices by making fake accidents claims for earning profit out of it, which is illegal in Indian Law and that is the major problem of Indian motor industry.

 Excessive Dependence on surveyors- Another problem under

motor insurance industry is too much of dependence on independent surveyors. The reason behind is lack of technical knowledge of the staff.  Independent assessor- In Indian motor insurance industry an

independent assessor charges higher amount of remuneration for their service which is a costlier affair for the company and a problem for the motor insurance industry. Because their expenses are more as compared to premium collection.  Improper time management-In most of the cases the assessor

reach the place of accident too late to asses the quantum of damages and sometimes they do not reach the places of accident in remote area.  Coverage- The another challenge in front of motor insurance

companies is coverage, here coverage means coverage of insurance in a territory and Several vehicles ply on special permits to cover large territory. Five state composite permit, seven state national permit, zonal permit etc. enable the vehicles to cover very long distances. This type of change in operation makes control of operation a difficult task and this introduces a new dimension of risk. Contract carriage operating under All India permit also form a different class of risk since the operation takes the vehicles to far off places where the insured cannot exercise proper control.

 Change in psychology of the operators- The tendency of the

insureds is to obtain the maximum benefit when a claim occurs. They try to cover up various kinds of losses they suffer when an accident occurs. The motor policies indemnifies against loss or damage suffered on account of accidents caused by stated contingencies: but the amount payable as claim is circumscribed by limitations, exclusions and policy conditions.  Renewal- The real problem is the renewal of the policies from the

second year onwards when the vehicle owner fails to take it seriously. Even among those that go to renew their policies, there is a high incidence of opting only for the mandated third party liability, thereby defeating the very objective of insurance. Reasons for not renewing are ignorance, carelessness, high premium amount and busy time schedule.  Breach of Utmost good faith- The doctrine of utmost good faith

imposes a legal obligation on the proposer to disclose all material facts in the proposal form; the material vehicular details- type, year of manufacture, make, engine number and capacity, chassis number theft proneness of vehicle, etc.; the geographical area of use; the driving history like driver‘s age, qualification, physical conditions, traffic conviction, past loss experience, etc. In many cases policyholders breach this principle by misrepresents / suppresses facts in that case the insurer may be placed under an unfavorable position where approriate rates may not be applied.

2) Problems Related To Motor Insurance Customers  Terms and conditions- In many cases policyholders are not very

clear or do not have proper informations about their motor insurance policy terms and conditions. The reason behind it was complicated / confused policy wordings, especially to the policyholders belonging to the rural area due to illeteracy, unfamilier with english language etc.  Lenthy Process- In Indian motor insurance industry the problem

that customers are facing in relation to claim settlement is lengthy process due to legal formalities, mismanagement of the company and inefficient staff specially in public sector.  High premium charges- Another challenge that policyholders are

facing in this time are higher premium charged by the insurance companies. Customer think that they are paying more premium in comparison to the sum assured amount.  Term- Most of the customers wanted long term motor insurance

policy rather taking one year policy specially in public sector motor insurances companies.

CHAPTER 10. FEATURES OF MOTOR INSURANCE Features of Motor Insurance: Two Types of Policies- There are two types of vehicle insurance viz. Comprehensive and Third Party. Third Party (or Liability Only policy): Any injury/death of a third person and/or damage to his/her property - on account of any accident caused by your vehicle - is covered under Third Party Insurance. It also includes compulsory personal accident cover for the owner-driver. However, it does not cover any damage to your vehicle. As per law, it is mandatory for every vehicle owner to take Third Party Cover. Risks covered - The damage to your vehicle could be on account of - Natural disasters such as earthquake, flood, storm, etc. - Man-made disasters such as accident, theft, fire, etc. Insured Value - The vehicle is insured for a value (called Insured Declared Value in policy parlance) based on the manufacturer’s price of the vehicle minus the depreciation as per the vehicle’s age. Premium - Your premium would be determined by(A)What type of vehicle you own such as model, capacity, age, fuel type, etc. (B)Which city you stay in. (C)What is your age / profession. (D)What has been the claim experience. (E)Modifications made / Accessories added to the vehicle Premium saving options - One of the most common options to save premium is the facility of no-claim bonus (NCB), whereby you get a discount in your premium if you haven’t made any claim in the previous year. Moreover, this discount increases with each successive year of zeroclaim and goes up to, as high as, 50%. Since this benefit is available year after year, one should avoid making any small claims. Add-ons - You can enhance the protection by opting for Add-on covers to insure for risks that are not covered under a standard policy. Some of the common add-on covers include zero depreciation, no-claim bonus protection, accidental hospitalization, etc. You can also buy add-on cover

to provide personal accident cover to the unnamed co-passengers in your vehicle or Workmen’s Compensation to the driver. Claims - Similar to your health insurance, many insurers nowadays offer cashless facility if the vehicle is repaired at their authorized garages. Alternatively, you always have the option of getting the vehicle repaired at your preferred garage and then claim reimbursement from the insurer. Deductible - Deductible is the minimum specified amount of any claim that you will bear, with the balance claim amount being payable by the insurer. A standard policy normally has a compulsory deductible or excess of Rs.50 for 2-wheelers/Rs.500 for 4-wheelers. Portability - Vehicle insurance is portable. In other words, you can change your insurer without losing the benefit of any no-claim bonus that you may be eligible for portability.

CHAPTER 11. TYPES OF MOTOR INSURANCE BASED ON THE COVERAGE: Motor insurance policies can be classified into the following types, based on the coverage they offer: 

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Third-party Liability Insurance - This type of insurance policy is mandated by law for all vehicles plying on the roads. This insurance provides protection to third-party for damages to property or injuries to individual, where the policyholder is accountable for the accident. Third-party liability insurance only covers minimal risks, and it does not protect the policyholder for damage or theft of the insured vehicle, or injuries that he suffers. Comprehensive Insurance - This type of insurance policy covers thirdparty liability, and the expenses incurred by the policyholder in the event of damage or theft of the insured vehicle. The policyholder also benefits from a personal accident cover that offers compensation if he is injured or faces death in an accident. The comprehensive insurance policy can be enhanced through add-on covers that offer extended benefits. Add-on Covers - Some of the add-on insurance covers that supplement a comprehensive insurance plan are as follows: Zero Depreciation Cover - This is one of the most popular add-on covers in motor insurance. This policy ensures that the policyholder receives the full claim amount on the value of replaced parts, following an accident. However, this cover is available only for vehicles that are less than three years old. Roadside Assistance Cover - In the event of an emergency such as a flat tyre, battery issues, or an empty fuel tank, this cover provides you assistance even if you are stranded at a remote location. Policyholders can benefit from services like fuel assistance, battery recharge, taxi, or even accommodation assistance. Engine and Electronic Circuit Cover - This insurance covers expenses incurred when there is a damage to the insured vehicle’s engine or electronic circuits. NCB Protection Cover - The No Claim Bonus is a reward given to a policyholder for not making any claims during the policy term. The NCB can amount to a significant reduction in premium for the following year. However, when the policyholder makes a claim in the subsequent years, he stands to lose the accrued NCB. The NCB Protection cover, as the name suggests, does not nullify the NCB in the event of a claim; it

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just brings down the slab at which the NCB discount is given on premium. Key Replacement Cover - In the case of a lost ignition key, this insurance cover offers reimbursement for a part of the cost of a substitute key.

BASED ON PURPOSE OF USE: Vehicles can be used for private or commercial purposes, and the type of insurance that the owner purchases depends on the intended use of the vehicle. 

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Private Motor Insurance - This type of insurance policy is purchased by owners of two-wheelers who intend to use the vehicle for private purposes. A comprehensive private insurance provides coverage for the vehicle and its owner in the event of accidents, and also offers thirdparty liability protection. Commercial Motor Insurance - This is an insurance policy that prevents a business from suffering financial loss from damages to the commercial vehicle. It offers third-party liability protection, and accident cover for the driver of the vehicle. It is possible to strengthen your two-wheeler insurance by opting for sufficient additional coverages. These days, insurance companies also provide you the convenience of purchasing and renewing insurance policies online. So it is advisable to compare policies and choose one that is appropriate for your needs.

CHAPTER 12. EMERGING SCENARIO REGARDING CAR INSURANCE IN INDIA Introduction The term "Motor car is defined as the means of any motor vehicle other than a transport vehicle. Omnibus, road-roller. Tractor. Motor cycle or invalid carriage. It is an automobile, or locomotive designed to run and be steered on a street or road way especially. An automobile specially designed for passengers and propelled by an internal combustion engine. The motor car insurance is a contract by which the insurer assumes the risk of any loss the owner or operator of a car may incur through damage to property or persons as the result of' an accident to its vehicle. There are many specific forms of motor car vehicle insurance, varying not only in the kinds of risks they cover but also in the legal principles underlying them. Liability insurance pays for damage to someone else property or for injury to other persons resulting from an accident for which the insured is judged legally liable. Insurance pays for damage to the insured car if it collides with another vehicle or object, comprehensive insurance pays for damage to the insured car resulting from fire or theft or many other causes. Insurance had its beginning in U.K. in the early part of the 2 1 century. The first motor car was introduced into England in 1884. The first Inotor policy was introduced in 1 895 to cover third party liabilities in India. By 1 899 accidental damage to the car was added to the policy, thus introducing the comprehensive policy along the lines of the policy issued today. In 1903, General Insurance Corporation Ltd was established mainly to transact motor insurance followed by other companies.

After World War - I there as a considerable increase in number of \ehicles on the road as also number of road accidents unable to recover the damages because not all motorists were insured. This led to the introduction of compulsory third party insurance act. Through passing the road Tariffs Acts 1930 and 19 u. The compulsory insurance provisions of these acts have been consolidated the road tariffs act of 1960.

CHAPTER13.RESEARCH METHODOLOGY & REVIEW OF LITERATURE Research Methodology for present study is mentioned. 1. PURPOSE OF STUDY-In India car vehicle insurance

policy is mandatory under the motor vehicle act. While other forms of general insurance are optional. The law mandates that every owner of car motor vehicle must have the motor Insurance policy. The need for Vehicle insurance of third party liability towards injury, death or property damage is mandatory as per the motor vehicle act. Therefore the vehicle car insurance becomes important as it is not only for car owners to minimize the risk for his or her vehicle but for the persons who may get injury or damage etc. due to vehicle hit or so on. The present study throws light on the various aspects of motor vehicle insurance in general and specifically for minimizing risk of vehicle users. 2. IMPORTANCE OF STUDY-According to Indian Brand of Insurance Equity Foundation 2010 reports the insurance industry in India is estimated for life insurance is 35.000Cr industry: Non-life insurance is 560 Cr- 56 % of which is accounted for the motor and health segments. There has been growth in car industry in India with that demand for insurance policies have increased. Since the liberalization taken place in India. The present stud\ evaluates the performance of Public and Private insurance companies with reference to car Insurance.

CHAPTER 14. SUGGESTION Some important suggestions/recommendations based on the present study are as follows:1) All public and private insurance companies should clearly specify their goals. Strategies and procedures towards car insurance operations. This will definitely cope up with growing needs of policyholders and will result into mutual benefits to companies and policyholders. 2) l here should be wide range of service branches across India for private insurance companies, so that it will provide better assistance services to its customers. 3) Ethical practice should be maintained in highest manner. In order to control fraudulent claims. Companies should conduct peer but at the same time no genuine claims should be rejected. 4) There is huge scope for car insurance business and companies should create conducive competitive environment in market by continuously exploring new attractive discounts to reach maximum customers. 5) Private along with public insurance companies should allocate sufficient funds on consumer awareness process through Newspaper, Televisions / Internet / Web Media. It will create general awareness among public for car insurance services offered by various insurance companies. 6) Agents are performing a vital role in growth for car Insurance business India. But at the same time it is important that the existing customers should be given superior quality of services agents. Which would create mouth publicity among prospective customers. 7) Companies should design car policies at an affordable low premium Insured Declared Value rates for various models of small cars in the market. Such initiative will lead towards growth for car Insurance business in India. 8) Policyholders should be responsible towards preserving all the necessary papers for processing of claims and keep extra set for future references in case of reimbursement of claims for car insurance. As in today’s times. Norms of claims payments are strict procedures by insurance companies.

9) Technology enabled services provided for car insurance company needs improvement. Especially by public insurance companies. Mainly to retain and attract more policyholders in today’s techno- savvy market. 10) Policyholders should have its facts clear and compare the Insured Declared Value (IDV) rates with various insurance companies. Along with it companies overall services during purchase of its car policies should be checked. The rules, procedures. And regulations of companies should be examined carefully by policyholders so that during claim occurrence there are no disputes with companies. 11) The car insurance companies should be committed to its policyholders on customer care services by providing assistance to its insurer on certain issues like 24x7 toll free helpline. Standard claims reporting via calls. Warranty on accidents repairs. Cashless claims settlement at network dealers across India and convenient claim settlement procedures within certain fixed period of time. However. The suggestions and recommendations arrived on the basis of the present study will overcome the hurdles in growth and development of public and private car / motor insurance companies in India. At the same time, results of study will open new arenas for researchers to carry this study further on various other aspect of vehicle motor insurance in India.

CHAPTER15. CONCLUSION Indian insurance market has undergone major structural changes. Since 1991 economic reforms. The government monopoly was dissolved. Private companies were permitted to operate. And brokers had major role to play. IRDA also regulated its motor tariffs acts since 1999. Indian car insurance market is competitive and growing rapidly in today •s general insurance market. IRDA has played important role in the development of Indian Insurance sector. Since the sector opened up in 2000. The Indian economy in general and Indian insurance sector in particular. Remained on growth path from 2000 - 0 007. During the global financial meltdown of 2008-09. Insurance sector remained virtually unaffected. As GIC in tough times believes that for growth in nonlife insurance segment depends on factors like necessity to have reliability. Reassurance. Responsibility. And GIC also acts as reinsurance partner. In today's market issues faced by customers from car/motor insurance companies in India are mix selling by agents through companies where details are not given. Delay in claim settlement dispute in process of claim settlements. Policy conditions not explained clearly by agents or companies officials. Exclusion are not appropriate. Delay and non-receipt of policies. Fraud and fake policy cover note. And companies services delays are current scenario problems. Unfortunately motor insurance also has the highest claim ratio due to third party liability. Predominately due to commercial vehicles. In today's arena the more profitable private car and two wheeler insurance business is mostly targeted by the private insurance companies and commercial vehicles is generally left to public insurance companies. But it is important to keep in mind. That public insurance companies are also having huge potential in its growth figures by doing car and two wheeler insurance business in India. Car / motor insurance not only provide insurance net for vehicle but also provide insurance cover on the life of car owner which is uncertain on the roads while driving car. Car / motor Insurance protects individual in three phases. Firstly. It offers own-damage coverage, meaning that in any event, Individual vehicle has met with an accident and sustained damage, the repair charges of vehicles for the same can be claimed.

Secondly, it offers a personal accident cover for the driver. Wherein any personal injury sustained as a result of the accident can be claimed as compensation. Thirdly, it offers protection from legal action. Such that legal liability due to accidental damages resulting in the permanent iniurv or death of a person. People generally tend to insure a car and its accessories with a plan that has affordable premium rates. However. That alone should not be the deciding factor when individual opts for a policy. This is because even though the plan might look feasible it might not necessarily contain all the required needs from the insurer. Car is a possession that laces risks of many kinds which are threats ranging from man-made threats of theft. Vandalisation to the natural threats of earthquakes. Floods etc. Car is also prone to accidents both by the driver and by the third person. Therefore insurer needs to be careful before opting for policy. Car / motor insurance companies have challenge to satisfy its customers on regularly basis. So they can sustain in the insurance market. Car insurance market in India has entered a highly competitive state. The presence of both private and public insurance companies and the freedom to decide the premium rates makes it imperative that the insurers follow sound underwriting techniques and change in sustainable premiums. It is therefore essential for them to ensure the information at their disposal is accurate and up to date for appropriate decision making. It requires statistics of previous underwritten risks. Information appropriate for underwriting purposes is the age of vehicle. Condition of vehicles, particulars of refurbished vehicles, imported vehicles and other information from the proposal forms of various companies. It is mandatory as per the law to buy car insurance for all new or old cars whether used for personal or business purposes. The central government's motor vehicles act (1988) states that automobile insurance is compulsory for all vehicle owners. A valid copy of an owner's insurance policy must be kept in the car at all times. As a result, car manufacturers have formed partnerships with leading insurance providers. Vehicle owners can get instant quotes for car insurance premiums by filling out a simple questionnaire at a car dealership office or at an insurance provider's website. Generally. Vehicle insurance is comprehensive in India and policies are comparable with various other insurance companies. The intelligent customer will always compare the

ID V rates and quality of services offered by various insurance companies before opting for car policy contract with insurance company. Earlier. Prior to 2000. Only public sector insurance companies like united insurance. National Insurance. Oriental Insurance. And New India Assurance used to offer motor and car Insurance but this sector has been itness1112 a good growth due to entry of private insurance companies. Insurance companies like HDFC Ergo. ICICI Lombard are offering motor and car insurance at competitive rates. Importance of car insurance here is quite clear from this fact that the people are generally looking for the best car insurance company for their cars which relates to its premium rates and its various services offered. Car insurance simply is a kind of relief in cases of accidents or thefts of cars. Individual can easily get car insurance information online and even can compare different policies through various websites medium. On observing carefully before choosing the best car insurance company in India. Individual can easily save on car insurance renewal premium by choosing appropriate plan and can get benefits on insurance plans for their new car. Today motor / car insurance are having bright future prospects on policies and innovative discounts which are offered by public and private insurance companies in India. Thus insurance sector is observing growth in relation to motor and car insurance business in India. The car/motor insurance companies promise through policies contract and then delivery of services will play a critical role for growth of companies. It can be further said that instead of over promise and under delivery. Car/motor insurance company motto should be under promise and over delivery as far as customers are concerned. Any business succeeds not because it is big or it has been long established. Business succeeds because there are people who work as united productive team and have practical, feasible, future growth plans for it. Similar kind of principle applies to car/motor insurance companies business in India.

CHAPTER 16. BIBLIOGRAPHY & WEBLOGRAPHY Books: 1.

B.S. Bodla. M C Garg. K.P. Singh "Insurance Fundamentals.

Environment and Procedures" Deep / Deep Publications Pvt. Ltd. New Delhi. 0 003.

2.

Dheeraj Razdan "Insurance Principles. Application and Practices Cyber Tech Publication New Delhi 2008.

3.

DrHarish M.Chandarana” Insurance — Principles and performance Pardeshi Publishers. Jaipur Rajasthan 2009.

4.

G.Krishnamurthy "Vehicle Insurance" New Horizon Media Private Ltd Oxygen Books Publications, Chennai 2009.

5.

U.R.Sarkar "Motor vehicles Act 1988" 4th Edition Sodhi Publications New Delhi — Allahabad 2011 U.R. Sarkar "Motor Accidents. Insurance Claims and Compensation" 4th Edition, Sodhi Publications New Delhi — Allahabad 2009.

6.

Uma Narang "Insurance Industry in India — Features. Reforms, and Outlook" New Century Publications New Delhi 2013.

7.

V.B.Kolhatkar, V.A.Pai "Motor Insurance" IC 72, Insurance Institute of India Publications, Mumbai 1999.

WEBLIOGRAPHY:

1.

http://gicofindia.com/Genral.hist

2.

http:// www. Irdaindia.gov.in ref; - IRDA/GEN/06/2007/ 12-072007.

3.

http://www.policybazaar.com/knowledge-base/carinsurance/motorinsurance- cover / types.html.

4.

http://www.irda.gov.in

5.

http://www.policybazaar.com/knowledge-base/carinsurance/what-carinsurance.html

6.

http://www.motorinsuranceindia.com/carlnsurancelndia.do http://www.policybazaar.com/knowledge-base/carinsurance/motorinsurance-cover.html

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