Insurance Article, The Insurance Times 2020, The Insurance Times April 2020

CASE STUDIES ON MOTOR INSURANCE POLICIES

With new liberalization policies encouraging FII (Foreign Institutional Investment), Automobile giants all over the world started establishing their base in the Indian Automobile Market with companies like Hyundai, Ford etc. flooding the market with technologically advanced new models of vehicles.  This boom in the automobile industry and the growing consumerism saw a fourfold increase in the premium income from the motor insurance for all the insurers in India. Now everyone knows that motor insurance business contributes almost 40% of the aggregate premium income all the types of insurance in General Insurance Sector.

With the flourishing of Automobile Industry for last one decade, Motor Insurance has become a lucrative business but requires careful underwriting as the number of accidents has increased due to explosion of vehicle users, bad roads, rash & negligent driving and poor maintenance of the vehicles. Although motor manufacturing companies have slowed down their production but Motor Insurance is the bread & butter of non-life insurers and also remain almost the same in the next decade too as per the new regulations imposed by the Ministry.

As already understood by the employees of insurers / others / intermediaries, all those are engaged in this Indian Insurance Sector, that whenever there is a need for passing various insurance examinations (i.e. mainly while preparing for various types of Multiple Choice Questions) – as the types of the questions are now-a-days really widely varying and the latest entrants in the question setters’ endeavour are the Case Study Based MCQs. That’s why I volunteer with this discussion on Motor Case Studies.

So, let us now move on to the discussion on Motor Case Studies, one after another.

Motor Case Study No.1:

Tanker carrying petrol collided with a Truck and overturned in the nearby field. It developed a leak and next day the nearby villagers gathered to pilfer the leaking petrol. Subsequently a fire broke out from the leaking petrol and some persons died in the fire. In this context, which of the following is true?

  1. The heirs of the deceased persons are entitled to compensation under ‘No fault liability’ under MV Act
  2. The heirs of the deceased persons are entitled to compensation under ‘No fault liability’ as well as ‘Fault liability’ under MV Act
  3. The heirs of the deceased persons are not entitled to any compensation as the deaths occurred not out of the use of the Motor vehicle
  4. The heirs of the deceased are not entitled to any compensation as they were involved in a criminal act of pilferage

Motor Case Study No.2:

A person was boarding a bus with a luggage and decided to keep the luggage on the roof of the bus standing at the bus stand. When he was climbing up the ladder to check his luggage, the ladder gave up. As a result the man fell down and had a head injury leading to his subsequent death. Which of the following is true?

  1. The accident did not arise out of the use of the motor vehicle as the bus was stationary
  2. Though the death occurred due to the use of the ladder of the bus, no compensation is payable as the journey has not yet started
  3. The man is not entitled to any compensation as he was not supposed to scale the ladder of the bus as a passenger
  4. The man died out of the use of the motor vehicle and is entitled to receive compensation

 

Motor Case Study No.3:

A passenger bus drove over a causeway submerged in water. As the bus was reaching the other side of the causeway, the rear wheels slipped and the bus was stranded on one side of the causeway. The passengers were waiting for the water to recede so that they can disembark from the stranded bus. But the water level started rising forcing the passengers to climb the roof of the bus. Ultimately the high tide came and the bus was washed away causing several deaths. Which of the following is true?

  1. The heirs of the deceased are not entitled to any compensation as the cause of death was high tide and not the use of the motor vehicle
  2. The heirs of the deceased are entitled to full compensation as the deaths occurred due to the negligence of the driver of the bus
  3. The heirs of the deceased are entitled to ‘No Fault Liability’ compensation as the deaths occurred without any fault of the driver of the bus
  4. The heirs of the deceased are not entitled to any compensation as they were a party to the action of the driver crossing the submerged causeway and did not prevent it.

 

Motor Case Study No.4:

Mr. Suresh, who was the owner of a car, already sold his car for its price. When the cheque received as the price of the car could not be en-cashed and meantime the car met an accident on road he claimed indemnity from the insurer for the loss of the car. Is his claim valid?

  1. Yes – the claim is valid & payable
  2. Partially payable
  3. Claim cannot be paid by the insurer
  4. Claim is payable only to the new owner

[Note: In the above case, the claim put forth by Mr. Suresh is not justified because, as the court also held that the loss was the loss of the sale proceeds and not the loss of the car and so the insurer is not liable to pay any compensation. (Eisinger vs. GAFL).]

Motor Case Study No.5:

          Mr. Samir, the owner of the insured car sold away the car but not intimated to the insurer and thereafter, while driving  the new car he has purchased – that  car  met  with  an  accident  and he claimed  indemnity  from  the insurer who covered the sold car. Whether this claim is payable?

  1. Yes – the claim is valid & payable
  2. Samir cannot claim any amount from the insurer
  3. Claim is payable only to the new owner who purchased this car
  4. Claim is payable on non-standard basis

[Note: Mr. Samir  cannot  claim  any  amount  by  way  of  compensation  from  the  insurer because the policy ceased to have effect on the sale of the insured car and so he could no longer get any benefit of insurance under the policy.]

Motor Case Study No.6:

Ms. Payal met with an accident while driving her car, and it was due to defective brakes in the car, which she realized while driving the car. She claimed compensation from the insurers for the damages sustained by her car in this process. In such case –

  1. Yes – her claim is payable
  2. Claim is payable on non-standard basis
  3. Payal cannot claim any compensation
  4. Claim is payable but excluding the defective brakes

[Note: Ms. Payal cannot claim any compensation in the above situation because the Insurers are not held liable where there is inherent defect in the vehicle. Moreover, when the vehicle is not roadworthy and in a dangerous condition the insurer is absolved from his liability to indemnify such an insured, whenever any condition of the policy is breached by the insured. The insurer will not make the loss good; similarly where the loss is due to want of foot brakes as any mechanical breakdown is not allowed to be covered under motor policy.]

Motor Case Study No.7:

Mr. Ranjit Singh had engaged a driver for his car, who had negligently driven the vehicle and caused a grievous heart / damage to a third party on the road, is Mr. Ranjit responsible in the above situation?

  1. His driver is solely responsible
  2. Ranjit is definitely responsible
  3. Matter to be dealt by Solatium fund
  4. No, Mr. Ranjit Singh is no way responsible

 [ Note : As  per  the  common  Law,  the  master  is  liable  for  the  tortious  acts  of  the  servant provided the servant does such act in the course of his employment. The common law also recognizes the vicarious liability of the owner of the motor car. In the law of torts, if a person negligently drives his vehicle and causes injury or death to the third party, the driver whose negligence caused the damage is liable to the third party. The driver is the servant of the owner, and since he is a person of no means, the owner is liable for all his acts so far that he has done such acts in the course of his employment. In the above case based on the provisions of the common law Mr. Ranjit is held liable for the damage caused to the third party.

(Pushpabai Sudershin Vs. Ranjit G and P Co) ].

Motor Case Study No.8:

Mrs. Alia Agarwal received a brand new Maruti Zen from her husband on her birthday. The car was insured against damage or loss with XYZ Insurance Company for an amount of Rs 5 lakhs with a deductible of Rs 5,000/- from her coverage. One day, Mrs. Alia, who was an experienced driver, took the car out to visit her friend. On the way to her friend’s place, she had to stop at a traffic signal. Although she stopped her car to avoid jumping the signal, a speeding driver from behind rammed into her car. The impact of the collision was such that Alia suffered severe injuries and she had to be hospitalized.  Her car was reduced to a wreck.  Investigations revealed that the car that hit Alia’s car was being driven by one Mr. Dayan Garg. Mrs. Alia filed a claim for loss with her insurance company and received Rs 4, 25,000/- as damage claim.  The  insurance  company,  in  turn,  sued  Mr. Dayan  on  behalf  of  its policyholder, Alia for the same amount that the Insurance Company had paid her. Mr. Dayan approached the court challenging the validity of the insurance company’s suit.

Questions for Discussion:

 What is the principle on the basis of which the insurance company accepted Mrs. Alia’s claim and later filed a suit against Mr. Dayan?

  1. Insurable interest     Indemnity      c. Subrogation      d. Contribution

[Note: The insurance company paid the claim amount to Mrs. Alia and later filed a suit for claiming the same from Mr. Dayan by following the process of subrogation. In common parlance,  subrogation  is  the  process  of  legally  substituting  a  person  in  place  of another.  In subrogation, legal proceedings are initiated by the insurance company against a third party that has a liability to the policyholder. Subrogation gives the insurance  company  the  right  to  collect  the  claim  amount  from  a  third  party  after paying the insured’s claim. It is one of the most effective procedures of post-loss claims handling.  Subrogation  is  common  in  claims  that  pertain  to  automobile damage,  property  insurance,  and  worker’s  compensation  claims.  Although the policyholder’s deductible may be included in the claim, other losses suffered by the policyholder such as medical expenses, which are not included in the coverage are not taken into account during subrogation.]

  • What is a deductible – how does an insured benefit by having a deductible clause in Motor insurance coverage?
  1. Always deductible amount is borne by the insured & no benefit for the Insurer
  2. Always deductible amount is borne by the insured & no benefit for the Insured
  3. Always deductible is the amount to be borne by the insured & it is beneficial for both the Insured & insurers
  4. Always deductible amount is borne by the insured & it is beneficial for the Insured only

[Note: Deductible  is  the  amount  that  an  insurer  deducts  from  the  amount  of  loss  before paying the remaining amount to the policyholder. For example, if a certain company has a Rs 5,000/- deductible in its Car insurance policy, the insurer will only pay for claims that exceed Rs 5,000/-. Thus, a loss of Rs 1, 00,000/- caused due to a accident / or any other insured peril would produce a payment of only Rs 95,000/- from the insurer.  The rule related to a deductible clause is the higher the deductible, the lower is the insurance premium for a loss exposure. As more discounts are given for higher or voluntary deductibles. This means increasing the deductible amount in the insurance policies leads to considerable savings in the premium. Insurers too  stand  to  benefit  from  increasing  the  size  of  the  deductibles  in  their  insurance policies.  By  doing  so,  the insured  can  achieve  a  savings  in  their  insurance  premiums.  However,  in  the  process,  the  deductible  portion  in  the  insurance  must  not  be increased to such an extent that it becomes financially difficult for the Insured (i.e. an individual or a firm) to bear the risk assumed for a car.]

Motor Case Study No.9:

Inder Singh Chauhan had purchased a bus by taking a loan from M/s. ABC Financers. The bus was being used as a private service vehicle, and not as a public transport one. It was insured under a comprehensive insurance policy issued by United India Insurance. The bus met with an accident, for which insurance was claimed. The insurance company appointed its surveyor, who assessed the loss at Rs.1, 26,500/-. However, the Insurance Company deducted Rs. 33,125/- from the assessed amount, on the ground that the driver did not have an endorsement on his licence to drive a transport vehicle. Even this amount Rs.1, 26,500/- was not paid to Mr. Chauhan, but was directly paid to M/s. ABC financer. Aggrieved, Mr. Chauhan filed a consumer complaint that ultimately reached the National Commission.

Which of the following options is likely to be the decision of the Commission?
a. To be paid to the insured the balance amount of Rs. 33,125/-

  1. Not to be paid to the financer the balance amount of Rs. 33,125/-
  2. Not to be paid to the insured the balance amount of Rs. 33,125/-
  3. The balance amount of Rs. 33,125/- (plus the interest on this amount of Rs. 33,125/- along with the reimbursement of defense costs) to be immediately paid by the insurer to the insured on submission of the N.O.C. of his financer

 

[Note: The Complaint was upheld by the National Commission

It was held that once a person had a licence to drive a heavy goods carriage vehicle, it would mean that he/she was entitled to drive a transport vehicle, including a public service vehicle. Accordingly, the insurance company was directed to pay the balance amount, along with 12 per cent interest and costs of Rs 5,000/-. The commission also ruled that the practice adopted by insurance companies of directly paying to the financer, without informing the insured or without his consent, cannot be justified. If the insurance policy is taken in the name of the vehicle purchaser, there is no question of paying the amount straightaway to the financier.

(United India Insurance Co Ltd vs. Inder Singh Chauhan– IV (2006) CPJ 15 NC). ]i for theft of car – on grounds that car could not have been taken without

Motor Case Study No. 10:

Mrs. Sita’s teenage son arrived home one afternoon and said her car was missing from the spot where she always left it, just outside her house. Not long afterwards the car was discovered just a short distance away. It was badly damaged and appeared to have been driven off the road and to have caught fire. The insurer turned down Mrs. Sita’s claim. It said its loss adjusters had noted that the car could only have been operated by someone using an “intelligent” (programmed) key. The key had not been left in the car and Mrs. Sita had not reported that either of her two keys had been lost or stolen. When asked to produce the keys, she had at first been able to find only one of them, although she later found the other key. Mrs. Sita challenged the insurer’s insistence that the car could only have been taken by someone who had the programmed key. In response, the insurer cited a report from motor vehicle security experts, who it said supported its view. The insurer also suggested that the only other way in which the car could have been moved was by means of a transporter or tow-truck. Either of these would have caused the car’s alarm to sound, alerting Mrs. Sita to the theft. But in any case, as far as the insurer was concerned, the fact that the car had been driven off the road immediately before the fire indicated that a key must have been used. Mrs. Sita has moved to the Consumer Forum.

  1. Yes – her claim is payable
  2. Claim is payable on non-standard basis
  3. Court had uphold Sita’s complaint and awarded payment to her
  4. Sita complaint had not been upheld – so she cannot claim any compensation

[Note: However the complaint was not upheld –

Mrs. Sita was extremely distressed by the insurers’ stance and by its implication that she – or someone in her family – had taken the car and caused the accident. She produced evidence from the original dealer to support her argument that the car’s security could be by-passed, and that the car could be operated without the use of the programmed key. It was clear that the incident had caused Mrs. Sita much distress. However, the technical evidence Mr. D produced, supplied by the original dealer, was of a very general nature. It did not make any specific reference to the make and model of Mrs. Sita’s car. By contrast, the technical evidence produced by the insurer referred very specifically to the exact make and model that Mrs. Sita had owned. After taking into account the particular circumstances of the case and the possible alternative explanations for what had happened, verdict was ‘It can be concluded by the Court, on a balance of probabilities, that the insurers had sufficient reasons to refuse to pay the claim’.

Motor Case Study No. 11:

Mr. Ganesh‘s claim for the theft of his car was turned down by the insurer. The insurer said Mr. Ganesh failed to disclose relevant information when he applied for his policy. He had not mentioned a claim he made three years earlier for car theft. He had also failed to disclose an earlier accident claim, made the year before he took out this particular policy. The insurer said that if he had provided all relevant information, the premium would have been approximately Rs. 1,000/- higher than the amount of premium that had been charged. Under this Motor Theft claim – the claim was simply turned down by his insurer because the policyholder failed to disclose relevant information.

Mr. Ganesh did not dispute that he had failed to provide the information in question. He said the earlier theft case had simply slipped his mind when he was filling in the application form, and he had “not particularly concentrated on the issue of past claims” when he was seeking the Motor Insurance premium quote. He argued with his insurer that his claim should be paid in full, as he did not consider he had done anything wrong. He said he would have been happy to pay the additional Rs.1, 000/- if he had been asked to do so earlier, and he requested his insurer to deduct this sum from his current claim. Even then his claim had not been paid by his insurer. He moved to Court. Now the Court in this case had to ____________.

  1. Order to pay the claim to Mr. Ganesh
  2. Order the insurer to repudiate the claim
  3. Order to pay the claim together with interest on that claim amount
  4. Order that the Insurer should return this premium to Mr. Ganesh, together with interest on that premium amount.

[Note: The Court here opined that “After seeking clarification from both parties, it can be observed that Mr. Ganesh’s failure to disclose relevant information was unlikely to have been an “accidental” or “casual” oversight, which might in some circumstances have meant that the insurer should still meet the claim. Equally, there is no evidence to suggest that Mr. Ganesh had been dishonest in failing to provide the required information. But he did appear to have been very careless, even when he was told that the insurer was entitled to turn down the claim, even though there was no reason to doubt the car had been stolen.

Although it can be seen that the insurer had not acted correctly when, after deciding not to meet the claim, insurer retained Mr. Ganesh’s insurance premium, therefore, the insurer should return this sum to Mr. Ganesh, together with interest.

Motor Case Study No.12:

After Mr. B’s car was damaged in a road traffic accident, his insurer accepted his claim under his comprehensive motor insurance policy. One of the insurer’s approved repairers carried out the necessary remedial work and Mr. B signed off the work as having been satisfactorily completed. Four months later, Mr. B was involved in another road traffic accident. He later said that as there was only minor damage to his car, he had not contacted his insurer but had simply gone ahead and arranged the repairs. Mr. B said that, while repairing the car, the garage had spotted some damage to the boot that did not seem to have been caused by the most recent accident. So he told the insurer the original repairers must have failed to complete the job properly. The insurer arranged for a different garage to inspect the reported damage. It also asked the engineer who had inspected the car after the first accident to review his report and the photographs taken at the time. As a result of its findings, the insurer refused Mr. B’s request that it should pay for the repair of the boot as part of the original claim. It said there was nothing to connect this damage to the original accident. Mr. B moved to the court on this issue. Now, it is obvious that-

  1. Complaint will be upheld in the court
  2. The matter will be treated entirely under the four months’ earlier lodged claim
  3. Complaint will be upheld in the court with payment of interest
  4. The insurer will be offered to deal with it as a new claim, subject to application of a new policy excess

 

[Note: The Complaint was not upheld in the Court – the Court said –

‘After looking at all the evidence, it was found that nothing to support Mr. B’s view that his car’s boot had been damaged in the original accident. And there had been any “negligent act or omission” on the part of the repairers who had carried out the remedial work after the first accident. The insurer had not been required to disprove Mr. B’s allegations. However, by instructing independent experts and seeking clarification from the original inspecting engineer, it had gone to some lengths to try to establish whether it was liable for the damaged boot. Although it had declined to consider the damaged boot as an outstanding issue from the original claim, the insurer had offered to deal with it as a new claim, subject to a new policy excess. We said we thought this was a fair and reasonable offer and we did not uphold the complaint’.]

Motor Case Study No. 13:

Miss L’s car was stolen from the driveway of her home while she was inside the house. She neither saw nor heard the theft. When she put in a claim to the insurer, the insurance company asked her to send her car keys to the insurer. However, she was only able to produce the spare ignition key. Taking this as evidence that the key had been in (or on) the car when it was stolen, the firm rejected Miss L’s claim. It said that by failing to “exercise reasonable care in safeguarding her car” she had breached a general condition of her policy. Miss L objected to this. She said that the key had definitely not been in the car when it was stolen. She had lost the key a month earlier and had been using the spare. She was adamant that she had not been “careless“, as the insurer had suggested. After the insurer rejected her complaint, she straight way went to Court. Whether her contention in the court  ______________.

  1. Will be totally rejected
  2. Will be totally accepted
  3. Will be partially rejected
  4. Will be partially accepted

[Note: The Complaint was rejected – where the Court said,

“It is clear that with Miss L that she had not been “reckless”. Someone is reckless if they recognize a risk, but deliberately “court” it. Miss L had not done this, so the insurer was wrong to say that she had breached the “reasonable care” condition. However, the insurers’ policy also contained a specific (and very comprehensive) clause that excluded claims for cars stolen when the keys were left in them. The insurers had specifically highlighted this clause when they sold Miss L the Motor Policy. And as the insurer was not satisfied with Miss L’s explanation that she had lost the original car key, we concluded on balance that it was likely that she had left the key in, or on, the car.

Since, the circumstances of this theft did fall within the scope of that exclusion. She could be said to have “left” the keys in the car because she had gone into the house, and was too far from the car to be able to prevent it being stolen. In addition, the fact that the car was parked so close to the road meant it was relatively vulnerable to an opportunistic thief. Therefore rejection of the complaint is justified”.

Motor Case Study No. 14:

Mr. P parked his car opposite a letterbox and jumped out to post a letter, leaving the key in the ignition. While he was crossing the road to reach the letterbox, someone had stolen his car. Mr. P was horrified when the insurer rejected his claim subsequently on the grounds of its “keys in car” exclusion clause. But Mr. P said that the insurer had never told him that the insurance policy included such a clause. He made a complaint to the consumer Court. His complain ______________.

  1. Will be totally rejected
  2. Will be totally accepted
  3. Will be partially rejected
  4. Will be partially accepted

[Note: The Complaint was upheld –

By turning his back on the car and walking away from it, Mr. P had fallen foul of the “keys in car” clause in the policy. In legal terms, he had left the car “unattended” – in other words he was not close enough to the car to make prevention of the theft likely, as established in Starfire Diamond Rings Ltd v Angel, (Reported in 1962 in Volume 3 of the Lloyd’s Law Reports, page 217); and in Hayward v Norwich Union Insurance Ltd, (reported in 2001 in the Road Traffic Reports, page 530).]

Mr. P accepted that he had left the car unattended. But he claimed that none of the policy documents that the firm had sent him (such as the policy schedule and certificate) referred to the “keys in car” exclusion. The firm had set out the exclusion in the policy booklet but had done nothing to draw Mr A’s attention to it when it sold him the policy, as it should have done in accordance with industry guidelines.

It is natural that Mr. P had been prejudiced by the insurer’s failure to highlight the clause. If the firm had clearly referred to the clause on the policy certificate or schedule, Mr. P might well have acted differently. It is also observed that Mr. P had not acted “recklessly“. Applying the test of “recklessness” as set out in Sofi Vs. Prudential Assurance (1993) – he had not even recognized that there was a risk, let alone deliberately courted it. Therefore, it can be said that the insurer has to pay Mr. P’s claim.]

Motor Case Study No. 15:

Mr. H desired to get rid of an old car carpet from the car that he was driving. While he was disposing of the carpet, someone stole his car. He had left the keys in the ignition and, although he hadn’t walked far from the car, he did not hear or see anything suspicious. He only realized that his car was gone when he turned back towards where he had left it. The insurer turned down Mr. H’s claim because he had left his keys in the car. The insurer’s decision not to pay the claim was based on CCTV footage that was obtained from the spot of incident that had happened. This showed Mr. H walking away from his car with the carpet. It also appeared that he had left the car’s engine running. The insurer is justified in turning down the claim on the grounds of its “keys in car” exclusion being mentioned on the policy certificate. The claim may be _____.

  1. Totally payable
  2. Totally rejected
  3. Partially payable on non-standard basis
  4. Partially rejected

[Note: The Complaint was rejected – by the court while the Court said, ‘The insurer is justified in turning down the claim on the grounds of its “keys in car” exclusion. The claim was therefore, rejected. Here Mr. H had turned his back on the car after leaving it in a public place and he was completely oblivious to the theft until after it had happened. He had walked a fair way from his car, so he was unlikely to have been able to prevent the theft. In this instance, Mr. H had no excuse for not being aware of the policy exclusion. The insurer had highlighted that it was mentioned very clearly on the policy certificate, a document that every motorist is required to have by law. Therefore, the rejection is justified.]

Motor Case Study No. 16:

Mr. Ram, a married person dies in a road accident. His wife, Mrs. Rukmini files a case in MACT, Pune whereas Mr. Ram’s parents file another MACT case from Mumbai. What is the correct step to be taken to handle the situation from the list of options below?

  1. Wait till the Court decides in one case and then go for appeal
  2. Go the high court for stay in both the cases in the initial stages itself
  3. Wait till one case is decided and bring this fact to another court for dismissal of the pending case
  4. Take effective steps in both the courts by filing certified petition copies FIRs etc. to transfer the case to either of the courts for clubbing together

Motor Case Study No. 17:

The MACT award of Rs. 9900/- for a beggar (who was seating at footpath at the time of accident and also permanently living in footpath, who meets with a car accident during 2015. Insurance Company wants to go on appeal as the injury was very minor. The option available is –

  1. Go on appeal on normal course
  2. File a writ in the High Court
  3. File a SLP in the Supreme Court
  4. Company has to satisfy the award

[Note: Any MACT award up to Rs. 10, 000/- cannot be challenged / appealed on the higher forum but always has to be satisfied.]

Motor Case Study No. 18:

Mr. Ashutosh took a 2-wheeler Package policy for the period from 01-01-2019 to 31-12-2019. The vehicle met with an accident on 26-08-2009, while Mr. Ashutosh was driving the 2-wheeler with Mr. Badal as a pillion rider. Due to the accident, Mr. Ashutosh suffered a head injury whereas Mr. Badal lost his right leg. In the above situation, which of the following statements is not untrue?

 

  1. Ashutosh will be compensated Rs. 25,000/- spent on the treatment of his head injury and Mr. Badal will receive the balance Rs. 75,000/-
  2. Ashutosh will not get any benefit under this policy but Mr. Badal will be compensated under the Motor Vehicles Act
  3. Ashutosh will not get any benefit under the policy but Mr. Badal will be paid Rs.1, 00,000/- under the policy
  4. Ashutosh will get Rs. 25,000/- spent on the treatment of his head injury and Mr. Badal will be treated as a Third Party under the Motor Vehicles Act

Motor Case Study No. 19:

Mr. Hariprasad bought a new Maruti car and insured it under a Private Car package policy for the period from 01-01-2019 to 31-12-2019. On 26-09-2019, he went to Puri with three of his friends for a visit. On the return journey, the car met with an accident and Mr. Hariprasad was severely injured resulting in the loss of left eye while all three friends were also injured. While two of them escaped with minor injuries, Mr. Kalikaprasad who was sitting in the front of the car died on the spot.

In the above context, choose the correct statement from the following:

  1. Hariprasad and all three friends are eligible for compensation before MACT and Mr. Kalikaprasad will receive Rs. 50, 000/- as compensation under PA cover
  2. Hariprasad will receive Rs.1, 00,000/- under PA cover and Mr. Kalikaprasad, his deceased friend will be eligible for compensation before MACT Court
  3. Hariprasad will be eligible for 50% of CSI as compensation under Compulsory PA cover for Owner / driver and his friend Mr. Kalikaprasad’s heirs will be eligible for compensation before MACT Court
  4. None of the above

 

Motor Case Study No. 20:

Mr. Big Boss has imported a new brand ‘Hummer and has not yet paid the import duty. He wants to insure the car with one of the Indian insurers. Choose the correct option.

  1. Cannot be given Insurance cover
  2. Can be covered on payment of import duty later on
  3. Can be covered with additional premium of 30%
  4. Can be covered with additional premium of 50%

 

Motor Case Study No. 21:

A motor vehicle is covered under Class G, Motor Trade Internal Risks. While doing a test run within the garage premise the vehicle, due to the negligence of the garage employee, the vehicle ran down the owner of the garage and at the same time the vehicle was also got damaged. This policy will indemnify –

  1. Own damage claim for the damaged  vehicle and Third Party Personal injury claim for the owner of the garage
  2. Only TPPI claim. Own Damage claim will not be payable
  3. Only Own damage claim of the damaged vehicle is payable
  4. None of the claims

 

Motor Case Study No. 22:

An Insured of a motor vehicle died on the 31st of December 2019. He had a Motor Package Policy covering his vehicle from July 1, 2019 to 30th June 2020. The vehicle meets with an accident on the 10th of February, 2020 which gives rise to a Motor Own Damage Claim. The legal heir of the insured, demands to the insurer for reimbursement of this claim. As an underwriter your decision will be-

  1. Not to pay the claim since the policy was not transferred in the name of the legal heir
  2. The legal heir would be asked to apply for transfer with documentary evidences and obtain a policy in his name and the claim may be paid on completion of such transfer with in specified time period
  3. Claim cannot be paid even if the policy is transferred on some subsequent date since on date of loss the legal heir did not have a valid policy in his name
  4. The Claim can be settled on non-standard basis.

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