Financial Times

Motor Insurance – What you need to know - IBSL

Every person who wishes to use a motor vehicle on the road or where people have access is required by law to obtain minimum Third Party motor insurance. The protection of and assistance for those who are the innocent victims of negligent drivers and the eed to ensure that a policyholder who has arranged insurance cover will be guaranteed the appropriate protection are the fundamental requirements for the legislation. The Motor Traffic Act, No.14 of 1951 and its subsequent amendments consolidate the laws relating to motor vehicles and their use on highways including provisions relating to insurance against 3rd party risks.

How does the motor insurance work and how do we receive protection?
Policyholders pay a premium to the insurance company of their choice in order to receive this protection. The insurance company will then accumulate all premiums collected from the motor insurance policyholders into a fund which is then used to compensate any policyholder who is unfortunate to suffer a loss from a motor accident.

What are the types of motor insurance covers available?
The key to finding which coverage is best for your needs involves learning about the following four types of motor insurance covers available in Sri Lanka:

The ‘Act Only’ Motor Insurance Policy
It provides the minimum cover required by the law, thus giving rise to the name. In terms of Sections 99 and 100 of the Motor Traffic Act, the drivers of motor vehicles are required to have a motor insurance in place in order to ensure that drivers can meet their legal liabilities in terms of the Act if they cause bodily injury or death to a third party. They are seldom issued by the insurance companies as protection is very limited. The limit of cover is unlimited for third party bodily injury or death.

‘Third Party Only’ Motor Insurance Policy
Besides providing insurance cover against death or bodily injury to third parties, it also provides protection against other legal liabilities such as damages to property of a third party or third parties. In addition to unlimited third party bodily injury or death cover, some policies offer unlimited third party property damage cover for private cars and a limited form of cover for commercial vehicles and motor cycles (usually Rs.15,000). You need to check the third party property damage cover for private cars as some insurers do not provide unlimited cover but for say, Rs.5 million or Rs.10 million.

‘Third Party, Fire and theft’ Motor Insurance Policy
Under this cover, a policyholder may opt to include some form of protection of his/her asset due to fire or theft in addition to the basic third party liability for bodily injury/death and/or property damage. However, the policy does not cover any other form of accidental loss of or damage to the vehicle.

‘Comprehensive’ Motor Insurance Policy
Most policyholders have found it is more cost effective and worthwhile to pay more and be protected under the Comprehensive Policy, which provides indemnity to the insured against loss of or damage to the motor vehicle and third party liability. While it is the widest form of cover available, it does not provide cover for every conceivable type of risk. More importantly, this policy covers any type of accidental damages to the insured's own vehicle in addition to fire and theft including theft of parts in or on the vehicle.

Additional Covers
On payment of an additional premium, there are additional covers for a motor vehicle that can be obtained along with the above main comprehensive insurance cover. What are the steps to be taken when making an accident claim? As explained, you must follow certain procedures to protect yourself if an accident occurs.

In the event you are making a claim, you should get all the necessary details including the name and address of the other driver involved, their vehicle registration number and their insurance company or policy or certificate number among other details. Once you have reported an accident, your insurance company, depending on the policy conditions, will send a loss adjuster to the site of the accident or to the nearest Police Station or work shop if it has been towed or to a place arranged after discussion with the insurance company in order to assess the damage to your vehicle and identify the circumstances of the accident. A loss adjuster is a specialist whose job is to find out what really happened and how it happened. He will recommend to the insurance company the quantum of the claim. In certain circumstances, the insurance company may appoint an investigator to check on the circumstances surrounding the claim.

(Source – Insurance Board of Sri Lanka).

Top to the page  |  E-mail  |  views[1]
Other Financial Times Articles
> Invisible hand behind Tax Dept. changes
> Stocks seen rising, companies expect boom when war ends
> At least 50,000 workers lose jobs since January
> Finance companies- confidence yet to be restored
> IMF team in Colombo to discuss $1.9 bln loan
> GK depositors reveal hidden agenda of Ceylinco Consolidated
> Braille bills
> Tackling the recession - COMMENT
> Motor Insurance – What you need to know - IBSL
> Bakery entrepreneur's environmental initiative cuts costs in the business
> Global crisis could be blessing to corporate sector
> Keells Supermarkets offer purchases thro' Internet
> Bidding deadline for South Container Terminal project extended
> Coca-Cola launches Minute Maid Mango
> Banks deny claims of restricted lending
> AMW scholarships and long service awards
> Hameedia's upgrades factories, launches new products
> 17th Annual NCE Export Awards for 2008
> Kotelawala transferred to Prison Hospital
> Ceylinco Finance PLC to be strategically repositioned
> Controversy plagues Chillies again
> Sri Lanka Tourism gears up for post-conflict
> Companies given notice to re-register
> Ceylinco Savings Bank name changed to MBSL Savings Bank
> MBSL reviving failed F&G, interest payments being made
> Business executives to the fore in relief work
> War not affecting GSP+ prospects
> More FR petitions by Ceylinco Depositors
> Bribery Commission finalizing probe in LMS deal
> Mandatory offer gain at Rs 185 million for Eagle
> Tea pluckers earn only around Rs 3,500 per month
> Synergy teams up with Hemas for ‘Insight Out’
> Emirates SkyCargo supports relief effort in Sri Lanka
> IMF streamlines conditions for programmes
> Honda re-launches 'Wing Mark' in Colombo
> Symposium on global recession, options for employers


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2008 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution