Motor insurance in India goes beyond financial protection, offering emotional relief during accidents through third-party liability coverage. This mandatory policy under the Motor Vehicles Act, 1988, ensures victims receive compensation while insurers handle legal complexities. A journalist shares personal insights on its real-world value.
Motor insurance comprises two main components: coverage for damage to one's own vehicle and third-party (TP) liability protection. The TP cover, required by the Motor Vehicles Act, 1988, is viewed as social legislation that safeguards accident victims or their families in cases of injury, death, or disability.
In an accident scenario, such as a car colliding with a scooter and injuring the rider, the affected individual qualifies as the third party—the vehicle owner is the first party, and the insurer the second. Compensation claims typically proceed through police involvement, including filing an FIR, gathering medical records, vehicle details, and insurance information, before reaching the Motor Accident Claims Tribunal (MACT).
The immediate priority after an accident is providing medical assistance to the injured, fulfilling both moral and legal duties. Insurers then manage the ensuing bureaucracy, from police procedures to tribunal hearings and legal representation, sparing policyholders significant stress.
Business journalist and insurance specialist shares a personal experience: "When my car was hit by a bike at a traffic signal, I got a first-hand taste of this. I wasn’t at fault, but it was still a traumatic experience. Later, I realised how much more distressing it would have been without insurance—all those official processes, hearings, and possible harassment."
The policy not only covers costs but preserves sanity amid chaos. However, drivers of larger vehicles may face presumptions of fault. Crucially, avoid direct payments to victims, as this could imply admission of guilt and hinder insurance claims. Instead, rely on the insurer for all subsequent handling, as intended by the premium paid.