Page 60 - Motor Insurance Ebook IC 72

The Insurance Times

damage, to the extent of Rs. 6000/- only, whereas
the insurers liability under Private car policy is Rs.
7,50,000. Thus the TP claimant will be entitled to
claim up to Rs. 7,50,000.

2. If the liability of the insurer to the insured person is
less than the liability of the insured person to the
third party. The rights of the third party against the
insured person in respect of the balance are not
affected.

In other words the injured third party is able to recover
compensation direct from the insurers. In the absence
of this provision, any sum revered by the insolvent
insured from his insurance company would have formed
part of his assets to which his creditors would lay a
claim in proportion to their debts.

Apart from the above, Section 154 of the Motor Vehicles
Act, 1988, which is a overriding provisions, ensure that
the insolvency of person not to affect liability of insured
or claim by third parties. Thus the Act, protects the right
of third party, even in case of insolvency of the insured.

Q10. What is the effect of death of the insured person
on a third party claim?

Ans. Section 155 of 1988 Act provides that if the insured

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