INDORE INSTITUTE OF LAW, INDORE

SUBJECT: LAW OF TORT

TOPIC: "INSURANCE COMPANY LIABILITIES IN MOTOR VEHICLE BILL, 2019"

SUBMITTED TO:

ASST.PROF. SONALI AGNIHOTRI

SUBMITTED BY:

RIDDHI SINGHVI

[2019/B.B.A. LL.B./039]

SESSION: 2019-2020

SEMESTER – I
 INTRODUCTION

Insurance is a contract whereby one party, the insurer, undertakes in return for a consideration, the
premium , to pay the other, the insured or assured, a sum of money in the event of the happening of
a , or one of various ,specified uncertain events.

Motor third-party insurance or third-party liability cover, which is sometimes also referred to as the
'act only' cover, is a statutory requirement under the Motor Vehicles Act. It is referred to as a 'third-
party' cover since the beneficiary of the policy is someone other than the two parties involved in the
contract i.e. the insured and the insurance company. The policy does not provide any benefit to the
insured; however it covers the insured's legal liability for death/disability of third party loss or
damage to third party property.

ABSTRACT

In India, under the provisions of the Motor Vehicles Act, 1988, it is mandatory that every vehicle
should have a valid Insurance to drive on the road. Any vehicle used for social, domestic and
pleasure purpose and for the insurer's business motor purpose should be insured.

An insurance contract is personal contract between the insurer and the owner of the vehicle taking
the policy, for identifying the insured for damage caused to a thrid party from the accident.

In order that the insurer can be made liable, it is necessary that the insurance policy must be in the
name of the owner of the vehicle.

DEFINITIONS OF TOPIC

INSURANCE: Insurance is a means of protection from financial loss. It is a form of risk management,
primarily used to hedge against the risk of a contingent or uncertain loss.

LIABILITY: In financial accounting, a liability is defined as the future sacrifices of economic benefits
that the entity is obliged to make to other entities as a result of past transactions or
other past events, the settlement of which may result in the transfer or use of assets, provision of
services or other yielding of economic benefits in the future.

INSURANCE LIABILITY: Liability insurance (also called third-party insurance) is a part of the
general insurance system of risk financing to protect the purchaser (the "insured") from the risks
of liabilities imposed by lawsuits and similar claims and protects the insured if the purchaser is sued
for claims that come within the coverage of the insurance policy.

MOTAR INSURANCE: Motor insurance, is insurance for cars, trucks, motorcycles, and other road
vehicles. Its primary use is to provide financial protection against physical damage or bodily injury
resulting from traffic collisions and against liability that could also arise from incidents in a vehicle.
 SIGNIFICANCE OF TOPIC

Through this research we will get to know the detail idea about insurance company's liability in
motar vehicle act which also know as third party insurance. Also we will study in detail about
insurance policy under motar vehicle act.

REVIEW OF LITERATURE

This project is primarily based on secondary sources that include both printed and non-printed
materials. Printed material includes articles and books, whereas non-printed materials include data
obtained from magazines and newspapers also. Some books are:-

1. Motor vehicles act, 1988(Act no. 59 of 1988).

2. Dr. R.K.Bangia's LAW OF TORTS including Compensation under the Motor Vehicles Act and
Consumer Protection Laws.

OBJECTIVE OF THE PROJECT

The objective of the project is to study in detail the working of the Insurance company under
MOTAR VEHICLE ACT and its liabilities in motar vehicle act. The project sheds light on
who can be the claimants, how the compensation is awarded to the third party and the
defences provided in the act. In all, it deals that it is important to get a perfect knowledge
about the act and the rights and defences provided to the people in India.

HYPOTHESIS

1. Perfect knowledge about the act can help in providing compensation for damage.

2. Who is to be made liable

 RESEARCH QUESTIONS

1.What is third party insurance?

2. Who is a third party?

3. Why third party insurance is compulsory for all vehicles under the Motor
Vehicles Act, 1988?

4.What are the salient features of third party insurance?

RESEARCH METHODOLOGY

SCOPE OF THE PROJECT

The project sheds light on the insurance company's liabilities in motar vehicle act. Apart from
that this project report is also added up with examples so that it will be easy to understand. It
also deals with the initiatives taken towards it in India. This research is also to explain to
regularize the use of motor vehicles and to compensate victims who are injured or died in
accident and family members and dependants of the deceased victims due to vehicle.

RESEARCH METHOD
Research Method applied in this project is Doctrinal. Since the research is a doctrinal one,
therefore the data would be mainly collected from secondary sources of information.
These will include books, journals and internet. Keeping this in view, the researcher has gone
through different books, journals, Web references, E-journal, reports etc. The relevant material
is collected from the secondary sources. Materials and information are collected from sources
like books.

CHAPTERIZATION

BIBLIOGRAPHY

1. https://www.prsindia.org/billtrack/motor-vehicles-amendment-bill-2019.

2.https://www.google.com/amp/s/www.vakilno1.com/legalviews/motor-
vehicles-accident-compensation-under-the-mv-act.html.

3. https://en.m.wikipedia.org/wiki/Motor_Vehicles_Act.

4.http://www.legalserviceindia.com/article/l264-Third-Party-Insurance.html