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In terms of the provisions of Motor Vehicles Act, 1988, no person shall use (except as a passenger) or allow any other person to use, a motor vehicle in a public place without insurance policy complying with the requirements of the said Act. The major sections of Motor Insurance are Own Damage section, i.e. loss or damage to the vehicle itself by insured peril and another is Third Party liability arising out of use of vehicle.

There are two types of insurance covers for each of these classes of vehicles:

a) COMPREHENSIVE / PACKAGE POLICY –

It is the widest in scope and covers both accidental damage to the vehicle and the Insured's liability to Third parties for bodily injury and property damage caused as a result of an accident involving the vehicles.

b) ACT POLICY -

This covers the Insured's liability to Third Parties for death, bodily injury and property damage caused as a result of an accident involving the vehicles.

For Private Cars and Motor Cycles, the rating considerations are:

• Cubic capacity of the Insured Vehicle.
• Insured's estimate of the full value of the vehicle and zone in which the vehicle operates.

For Commercial Vehicles, the rating considerations are:

• Licensed carrying capacity in the case of passenger vehicles.
• Gross Vehicle weight in case of goods vehicles.
• Insured's estimate of the full value of the vehicles and the categorisation of the vehicle according to its use.