Which vehicles are not covered under Motor Insurance Act

If you know anything about insurance policies, you know that nothing in that coverage comes without an asterisk. While the coverage is big and bold, the exclusions and terms and conditions are often full of fine print and jargon. It’s no different than your auto insurance policy. Understanding the terms and conditions is even more complicated if the coverage is a comprehensive or bundled plan, i.e. it includes both third-party car insurance and self-damage coverage. Let’s take a look at the main car insurance exclusions


what car insurance does not cover

When you purchase auto insurance for your vehicle, you not only get financial coverage, but also peace of mind. You acknowledge that you are fully covered for unforeseen expenses and liabilities in the event of an accident. But most of us make the mistake of forgetting about exclusions – expenses that your insurance policy will never cover.

These exclusions are predetermined by the insurance company and are clearly stated on your policy schedule. If you haven’t read the fine print of your policy, we’ll walk you through some typical car insurance exclusions to give you an idea of the costs you may have to bear yourself.

What is not included in car insurance

While exclusions vary from insurer to insurer and plan to plan, below are some common costs that are not covered by most insurers:

  • Consequential damage: Your insurance does not cover consequential damage or damage that is a consequence and not a direct result of the uncertain event. Suppose your car leaks engine oil due to an accident or collision. The costs for remedying the leak will be reimbursed by your insurance. But after a few days the engine ran fine due to oil leakage. This engine mount is considered consequential damage and is not covered.
  • Breakage, mechanical or electrical failure, wear and tear: Damage to your car that was not caused by an accident or damage or malfunction to a part is not covered by your car insurance.
  • Depreciation: Because wear and tear is excluded from the policy, the loss of value of your car due to wear and tear over time (so-called depreciation) is also not covered by the car insurance.
  • Accidental loss or damage was caused if the insured or any other person, with the knowledge and consent of the insured, was driving the car under the influence of liquor or narcotics or any other intoxicant.
  • If the damage, theft or loss is due to events related to war, invasion, acts of foreign enemies, mutiny, insurrection etc.
  • If the car is used for longer than the ‘usage limit’ stated on the policy. For example, if a private car is used for business purposes, the insurer will not cover accidental damage.
  • If the driver of the vehicle was driving without a valid driver’s license at the time of the accident
  • If accidental damage was caused by a deliberate attempt.
  • If the policy does not apply due to delay in renewal. Auto insurance policies are usually an annual contract and must be renewed without interruption. If damage or loss occurs after the expiration date and before the next renewal, the damage is not covered.

What are the common exclusions under car insurance policy

  1. Fracture:
    A car needs regular maintenance to ensure that you can travel safely and smoothly. However, damage to your car due to normal wear and tear is not covered by your car insurance.
  2. Intentional damage to property:
    The insurance company is not liable for any damage that the insured has deliberately caused to something or someone. The insurer does not even claim physical damage.
  3. Driving without mandatory documents:
    Under the Indian Motor Act, it is mandatory to carry all documents while driving on Indian roads. If you have an accident on the road without valid documents, your insurer will not reimburse any damage costs.
  4. Using a private car for work:
    If you are caught using a private vehicle for business and something happens to your car, your insurance company will not pay.
  5. Driving under the influence:
    Driving under the influence of alcohol is against the law in India. Insurance companies will therefore not claim compensation if you are driving under the influence of drugs or other intoxicants.

What is covered by a standard comprehensive motor policy

  • own loss: Coverage for loss of or damage to your vehicle as a result of an accident, theft, fire, explosion, spontaneous combustion, lightning strike, riot, attack or acts of terrorism, natural disasters.
  • Liability Insurance: Covers only your civil liability for damage – bodily injury, death and damage to third party property – caused to a third party while using your vehicle. • Personal accident cover for owner-driver subject to conditions.

You may assume that by taking out an all-risk insurance for your car you will not have to pay extra. Unfortunately you are wrong. There are conditions within the policy that determine the final claim amount.

Here are the limitations and exclusions of a standard auto insurance contract. Let’s start with the things that are completely out of policy

Permanent Exclusion List:

This list includes the following situations that do not cover loss or damage to your car.

  • If the policy does not apply. Timely renewal is therefore absolutely necessary. The car insurance is an annual contract and must be renewed without interruption. If the damage occurs after the expiry and before the next renewal, the damage is not covered.
  • If the insured or any other person, with the knowledge and consent of the insured, drives the car under the influence of liquor or drugs or any other intoxicant.
  • If someone drives a vehicle without a driver’s license.
    Violation of the vehicle manufacturer’s operating guidelines and associated wear and tear on the vehicle.
    Damage to the car due to war, terrorist attack, invasion, foreign enemy action, civil war, mutiny, insurrection, hostilities, radiation or nuclear material/weapons is not covered by the standard motor policy.

What is third-party insurance cover and how does it work

What is WA Insurance
Public liability insurance, also known as ‘Act only’ insurance, is a legal requirement for all vehicle owners under the Motor Vehicles Act. It is a type of insurance coverage where the insurer provides protection against damages caused to third party vehicles, personal property and bodily injury. The policy does not provide cover to the insurer.

How does WA Insurance work
In the event of an accident involving the policyholder, the insurer will provide financial assistance to pay for the cost of restoring the third party property. Hence it reduces the financial burden for the policyholder. In the event of an accident, the insured must immediately inform the insurance company before making a claim.

When a claim is made, the insurer appoints an expert to assess the damage and verify the estimated cost of repairs. After the verification is complete, the insurer will process the claim.

Importance of Liability Insurance


Ignoring policy exclusions can be costly and claims can be rejected later. Read the policy in detail to understand the loopholes and avoid hassle. You can also purchase some additional covers to get comprehensive coverage from your policy and cover those costs that would otherwise not be covered.


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