Published in Mint on Jan 07 2014, Written by Kapil Mehta
My daughter, who has a learner’s licence, had an accident recently wherein she drove into a small shop. I want to know that since the car is in my name, will the insurance company compensate the shop owner?
—M. Chabbra
There are three implicit insurance questions in your query. First, if a car driven by someone other than the owner meets with an accident, is the claim payable? Second, is a motor claim payable when the accident is caused by a learner? Third, is third-party property damage covered in a typical motor insurance? The answer to all three questions is, yes, subject to some conditions.
In motor insurance it does not matter if the owner is not the driver so long as the driver has a valid driving licence. Accidents by learners are covered provided the learner meets all the requirements of a learner’s licence—she has an active learner’s licence, is accompanied by an experienced driver with a permanent licence and an ‘L’ is painted on the front and back of the car in red on white background.
Finally, third-party property damage is payable but the claim process is long. The shop owner will have to file a claim with the motor tribunal. The tribunal will decide the claim amount due. You cannot directly have the insurance company pay the shop owner for the damage.
Can a compressed natural gas (CNG) kit installed in a vehicle be insured?
—Sajid
A CNG kit installed in a car can be insured. There is a standard additional premium that needs to be paid for CNG vehicles. Typically, this is 4% of the kit value for own-damage cover and about Rs.60 for third-party liability cover. Your insurer will give you the exact terms for its policy.
Is there a cover available where cancellation of holiday bookings can be insured? Under what circumstances will an insurance policy pay for cancellation?
—Richard
As I write this, I have just returned from a domestic trip where my flight was cancelled due to fog and I had to return a day later. The incremental expenses involved in such delays can be material.
Theoretically, insurers offer domestic as well as overseas travel insurance that compensates you for delays and cancellations. There is a standard set of hazards that are insured including weather, accident and health related cancellations.
Practically, there are so many caveats and conditions in these policies that I am not confident about claim payment. Take the case of the fog that delayed me—a specific carve-out in many policies is that delay due to inclement weather should not have been made public or that the event should not be foreseeable with a high degree of probability. It is possible to exclude fog-related delays for these reasons.
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