Motor insurance policy is compulsory. We have to subscribe. There is no option given by the law. We pay thousands of rupees towards premium. We know, very generally, two phrases: Comprehensive and Third-Party insurance. If I were to ask anyone – What is comprehensive insurance, they will simply say it covers everything!! It includes all. If the vehicle is damaged or lost, will the insurance company pay? Yes, it will pay – they say.
The insurance company will indemnify (or pay) the insured against loss or damage to the vehicle insured hereunder and / or its accessories. The insurance company will pay if your vehicle is lost or damaged due to the following events:
1) By fire, explosion, self-ignition or lightning
2) By burglary, housebreaking or theft
3) By riot and strike
4) By earthquake (fire and shock damage)
5) By flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm and frost
6) By accidental external means
7) By malicious act
8) By terrorist activity
9) While in transit on road, rail, inland-waterway, lift, elevator or air
10) By landslide or rockslide
These ten categories are given in the policy. Recently, a friend of minepurchased a vehicle for Rs. 608, 508/- (six lakh eight thousand five hundred and eight rupees). The name of the vehicle is Maruti Swift VXI. He paid a gross premium of Rs 27,212/-. He approached me hesitantly with the motor insurance policy schedule and the wording and said ‘Sir! Can you explain this policy for I paid almost Rs 30,000/- for one year premium?’
Please remember we deal with the commonilliterate people. Even the educated literate does not have any notion of the risks covered under the compulsory motor insurance policy. For example, fire, explosion, self-ignition or lightning – my question is, ‘What is Fire?’ People answer – fire is fire! We have pictures of fire in our mind but not definition.
Burglary, housebreaking, theft – do you mean that people keep their cars in bedrooms? If somebody were to steal the car, they break into the house to steal the car! Or is it that the car is kept in the house compound or premises before it was stolen. What constitutes housebreaking? What is the difference between burglary, housebreaking and theft? I don’t know these words sir. I am of the impression that burglary, housebreaking and theft – mean the same!
This policy also covers the loss or damage to the vehicle caused by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm and frost. This is exactly my friend asked after paying Rs 30,000/- premium…’Sir, what do these terms starting with flood and ending with frost mean in insurance? I am sure all experts who deal with motor insurance claims in insurance companies will not have same understanding of the words- floods, typhoon, hurricane etc. You took money from us; you owe us a duty to explain / define these terms.
Thus, the ten possible events that can cause loss or damage to the vehicle are not defined. I can go on talking about them but it serves no purpose. The contract of motor insurance policy is one such policy where the insured does not know what he is being covered for. There was no attempt by the regulator or the insurers to define these words in the policy document. They took these magic words for granted…and paying and denying claims!!! Arise…and Awake!
If there were to be a loss for my friend’s vehicle,he would spend his residue life running from pillar to post begging the insurer to pay the claim; the insurer is bound to deny because his definition of these ten events do not match the definition of my friend insured. His understanding is different from that of the insured. Thus, the insured and the insurer are on different pages.
I also pay motor insurance premium and hence I am living in constant fear. The fear of losing car, premium and the nightmare of running around the insurer. The insured can approach the insurance ombudsman for resolution; and over and above there is the insurance regulator; and beyond the insurance regulator we have the courts.
Insurer won’t pay because they never defined the risks they cover;Ombudsman won’t understand customer logic, Regulator is busy in regulating and the Court – I have neither strengthnor time. God save these stupid motor insurance policyholders. A fish always trusts the water but the it does not know it has to be cooked in the same water! Similarly, the compulsory insurance law forced us to trust the insurers and we know fully well the insurer won’t pay neither for Loss or Damage to the Vehicle Insured!
See you in my next article sirs!
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
