Page 265 - Motor Insurance Ebook IC 72

IDV Guide for Motor Insurance
Less Salvage
Less Excess Rs. 15,000
Net Liability Rs. 5,000
Rs. 50
Rs. 9,950 subject to cancellation
of policy.

Q. 14. "Motor Insurance Policy is not a Maintenance
Contract." Explain.

Ans: Motor insurance policy is a contract of indemnity and
not a maintenance contract. Many a time, repair or
replacement will result in an improvement in the
vehicle.

For example, the liability under the policy is restricted
to paint only the portion affected by the accident, but
the insured would naturally expect the entire car to be
painted to avoid a "Patchy appearance."

In such cases, the insured is expected to contribute
towards the additional cost of repainting the entire
car.

Sometimes- and this happens particularly with older
vehicles- dismantling of a vehicle reveals certain
defects which are not directly connected with the
accident but still will have be made good for a
satisfactory repair of the whole vehicle.

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