The India Motor Tariffs, as amended in July 2002 provided for two types of Policy forms. These were:
- Liability Only: This form covers “Act: Liability and PA to owner/driver. The Insurance Regulatory and Development Authority has withdrawn the Tariff with effect from 1st April 2009. However, the wordings of “Liability Only Policy” will continue and the rates for “Liability Only” policy are regulated by the IRDA.
- Package Policy: This form covers ‘Own Damage” losses and “Act Liability.” It can also be extended to cover additional liabilities as provided in the Tariff, for example, liability to employees of the insured who may be travelling in or driving the employer’s cars, increased Third Party Property Damage Liability, etc.
Formerly these were known as Act only and Comprehensive Policy respectively. Insurers could, restrict the cover under the Own Damage section of package Policy without reduction in premium or increase the premium for the same Policy. “Liability only” cover could not be reduced in any way.
With regards to “Own Damage” cover the existing policy wording are to be continued but insures are given freedom of pricing and permitted to provide additional covers after obtaining the Regulators clearance to the changes. The two policy forms i.e. i) Liability only and ii) package policy continues to be used. The authority has prescribed proposal forms for third party “Liability Only Policy “for private car, two wheelers and commercial vehicles.
Extracts from “  Guide for Motor insurance (IC-72)” by Dr. Rakesh Agarwal. Copyright of Sashi Publications, kolkata www.sashipublications.com and www.bimabazaar.com
