Page 68 - Motor Insurance Ebook IC 72

The Insurance Times

Q 14. Write a brief not on the limits of liability under a
"Liability Only" policy?

Ans: Earlier, under Motor Vehicles Act, 1939 liability of the
insurer is limited based on various factor such as the
type of vehicle, status of the victims i.e whether he is
using the vehicle in any manner at the time of accident
or not using the same in any manner such as pedestrian.
Therefore in case the award which exceeds the limit,
the insured is liable for the difference.

However, the existing Motor Vehicle Act, 1988, replaced
such limited liability of insurer into actual liability. Thus
so far as personal injury or dearth cases are concerned
the liability of the insurer is extended to the actual amount
of compensation awarded by the Tribunal.

In respect of damage to any property of a third party
out of one accident, there is a limit of Rs. 6,000 only. As
per the Act 'Property" includes goods carried in the
Motor Vehicle, roads, bridges, culverts, causeways,
trees, posts and milestones. However, the liability only
policy issued by the insurers in India are having inbuilt
higher coverage for property damage as under:
1. Two Wheelers Rs. 1,00,000
2. Other vehicles Rs. 7,50,000

But the same, does not include goods carried on the
vehicle.

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