Please check your Motor Insurance policy wording…where 80% of the policy wording and / or the 80% of the policy wording pages consist of India Motor Tariff (IMT). In a sexy way, they call it as IMT 1, IMT 2… so on., and I guess the IMT series ends at IMT 65.
Let us come to the basics and leave the ununderstandably beautiful IMT language. There exists an advisory committee called Tariff Advisory Committee (TAC). This is a statutory body under the Insurance Act,1938. The major function of TAC is to control and regulate the rates, terms and conditions offered by the general and the life insurance companies. We are presently talking of the Motor Insurance policies which fall under the scope of General Insurance Companies of India.
The TAC’s board has seven members from the general insurance industry and eight members from the government of India and other industries. The chairman of the insurance regulatory body IRDAI is also the chairman of TAC. Let me leave this boring bull shit here itself.
Having imported verbatim the wordings from the TAC, all Insurance Companies simply print out whatever they think relevant and call it as the Motor Insurance policy wording. There is no uniformity!! For example, the Liberty General Insurance Company published IMT 1 to IMT 10 in a serial manner. IMT 1 starts with Extension of Geographical Area and IMT 10 talks of Installation of Anti-Theft device. Whereas Tata AIG General Insurance Company do not attach IMT 2, IMT 4 in the series of IMT 1 to 10! God alone knows why they thought them to be irrelevant. IMT 2 deals with Agreed Value Clause and IMT 4 about Change of Vehicle. Thus, IMT 2 and IMT 4 are absent from Tata AIG policy. What I mean to tell is these insurance companies have no uniform in Motor policy wording. They chose what they want to print. What is a relevant IMT endorsement according to one company is irrelevant according to another! And yet, they are insuring private cars for three years!
Now, let us talk about IMT 1 in detail: All companies published IMT 1. It starts with “In consideration for the payment of additional premium of Rs __ …”. Why this clause is being added at all? I am sure, none of the insurance companies have an answer! IMT 1 informs us that if you want to visit Bhutan in your vehicle, for example, i.e., extension of geographical area then you have to pay an extra premium for that period of travel so that the insurance cover continues to exist. Nepal, Sri Lanka, Maldives, Bhutan, Pakistan and Bangladesh are the countries which are covered under IMT 1.
If anybody were to buy a car in India, what is the likelihood of travelling to the above countries? If somebody wants to travel in his car to these countries then he will apply for extension. Why do these insurance companies, irrespective of the likelihood, are making IMT 1 a part of policy? Out of 100 cars, probably 5 may go to Nepal, Bhutan or Bangladesh. It is most likely Nepal because of the religion. In other words, when you travel to any specific country in your vehicle, the insurance cover is extended to cover that country provided additional premium is paid.
You may contest if I say why will I go in my car to Sri Lanka when it is not connected by land? You may reply – I might ship the car to Sri Lanka to use there. Possible. However, Maldives is a tiny island country. It is far and not connected by land. The probability of shipping the insured vehicle there is remote. Why will any ordinary person take his vehicle to Maldives?
The question of going to Pakistan in a vehicle does not arise due to obvious reasons. The Sikh pilgrims Who visit the holy Nankhana Sahib, use the government buses or trains. Tell me, what is the use of printing IMT 1 when it is not applicable to 99% of the Motor Insurance policies? I am constrained to wonder whether the insurers are in senses while finalizing the Motor policy document?
IMT 19 deals with “Cover for Vehicles Imported without Customs Duty”. The issue is of its relevancy to an ordinary Motor policy? For example, I purchased Maruti Suzuki Dzire vehicle. In what way IMT 19 is relevant/applicable? I would love to ask all Insurance Companies…why are you printing it?
Majority of IMT series are not applicable or relevant to a comprehensive private car package policy. At the time of proposal itself we know whether the vehicle is under Lease / Hypothecation. For each of them, there is a special IMT endorsement. Accordingly, one can delete the irrelevant IMT endorsements and make the Motor Policy Document customer friendly.
By printing all IMT endorsements according to the whims and fancies of the insurers, we are successfully confusing the policy holders. They don’t even know what they are reading and why they paid the premium. These policy holders also don’t know that they are paying the salaries of the insurance regulator, TAC and the insurance companies.
IMT endorsements are a classic case of a goat trusting the butcher!!!
About the Author
Dr. K. Raja Gopal Reddy is a seasoned internationally qualified Insurance professional.
What you are reading here, may not answer all the questions we have, but has the absolute power of asking unsettling questions which increase the interest in the strange world, and show the contradictory wonders lying just below the surface of the commonest things of life. Look at this disturbing but beautiful thought of Friedrich Nietzsche “God is dead. God remains dead. And we have killed him”.
Dr. Reddy can be reached at: raja66gopal@gmail.com
