Page 6 - Motor Insurance Ebook IC 72

The Insurance Times

1. Discuss the origin growth and development of
Motor Insurance.

Ans. Origin : Motor Insurance is a fascinating branch of
Insurance had its origin in the UK. The first motor policy
was introduces somewhere in the year 1895 to cover
third party liability. However, the same was voluntary
and not compulsory.

In the year 1899, accidental damage to the vehicle was
added to the existing third party liability cover, thus,
introducing a comprehensive motor insurance policy in
the lines of the existing motor policy.

Increase in number of vehicles gave rise to increased
number of accidents causing personal injury and death
to the traditional road-users. Though, the victims of
vehicular accident had a right to claim compensation
against the tort-feasor under the common law, but the
same was not effective, as the tort-feasor does not have
sufficient means to pay.

Growth : This led to enactment of Road Traffic Act,
1930 in UK, introducing compulsory third party
insurance, for the motor vehicle used in public places.
However, the third party, not being a party to the contract
do not have right to claim compensation from the insurer
directly under Common Law. With a view, The Third

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