As per the Motor Vehicle Act, all the vehicles plying in the Territorial Limits of India must possess an ACT POLICY at all times. The violation is punishable with fine etc., as per Motor Vehicle act (as prevalent at the time of detection)
 
What is covered?

Third Party Property Damage / Bodily Injury (Fatal or Non-fatal) when Insured vehicle is used in a public place.

Insured's legal liability, as per Motor Vehicle Act, arising out of accident caused by or arising out of the use of the vehicle anywhere in India.

Such liability as above in respect of injury (fatal or non-fatal) to any third party and damage to any third parties' property.

Who can take the policy?

Owners of the vehicle having insurable interest in it.

What is the Period of Insurance?

Annual/12 months from the date of inception.

Short period covers available at higher rates.

What is the Compensation?

Subject to limit of liability laid down in the Motor vehicle act, the policy pays the insured's legal liability for death/disability for third party.

Loss or damage to third party property, liability for claimant's cost is also met (Max. Rs. 6,000/-) unless additional premium for opting unlimited cover is paid.

All costs and expenses incurred with insurer's written consent.

In case of death of the Insured/ Person entitled to compensation for a liability incurred under this policy, his legal heirs will be indemnified as in the case of the Insured, subject to the limitations of use of the vehicle provided Driver was holding a valid and effective driving license.

What is Liability of the insurers with regard to Third Party Bodily Injury/ Death Claims?

Third Party (A person other than Insured and the Insurer) who is injured /dies due to an accident with the Insured Vehicle, the amount of compensation adjudged by the Motor Accident Claims Tribunal is made good by the insurers and is payable to the Legal Heir of the Deceased or the Injured. The amount of compensation is unlimited/ has no preset limit.

All costs and expenses incurred by the insured with Insurer's written consent.

What is liability of the insurers with regard to Third Party Property Damage?

The compensation payable to Third Party for damage to its property (moveable or fixed) is restricted to Rs. 6000/- {Rupees Six Thousand Only}, irrespective of the amount adjudged by the Motor Accident Claims Tribunal/Court. This compensation limit can be increased to Unlimited by paying of an additional Premium at the time of taking insurance.

All costs and expenses incurred by Insured with Insurer's written consent.

What is liability of the insurers towards Employee (Other than payed driver) of Insured?

Claims arising out of and in the course of employment of a person in the employment of the Insured are compensated to the extent of Rs.20,000 when an Employee (Other than payed driver) is in the driving seat.

What is Non Idemnifiable/ Not Paid?

Consequential loss, wear and tear, mechanical or electrical breakdowns, failures & breakages.

Damage to tyres, tubes unless the motorcar is damaged at the same time however , the liability of the insurer for tyres & tubes is limited to 50% of the cost of replacement.

Any accidental loss or damage suffered whilst the insured or any other person driving with the knowledge and consent of the insured is under the influence of intoxicating liquor or drugs.

Contractual Liability. When vehicle is used outside the geographical area, when used contrary to limitation as to use, driven by a person other than the driver as stated in the clauses mentioned in the policy of insurance.

War Perils, nuclear perils and drunken driving.