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THE STUDY OF MOTOR VEHICLE INSURANCE

0ABSTRACT 1) Introduction
In India, the insurance market segmented in two markets. One is life insurance market and second is non life insurance markets or General insurance market. The General insurance business started with the establishment of the triton insurance in Calcutta. The general insurance business started working since 1850 107 insurers amalgamated and grouped into four companies they are 1) The National Insurance Company Ltd. 2) The New India Assurance Company Ltd., 3) The Oriental Insurance Company Ltd. And 4) The United India Insurance Company Ltd. GIC incorporated as a company Motor insurance; Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured. Motor insurance is started in U.K. Firstly.

2) Research Objectives
The objectives of the research are drawn as below. 1. To study the awareness among the people about motor vehicle insurance. 2. To acquire proper knowledge about various type of insurance policy available 3. To study the preference of policy of the customers. 4. To study the performance of the insurance companies.

3) Research Methodology; Research can be defined as process where in activities are done systematically to find out solution of problem. Research basically means a detailed study of a particular subject. The research involves various steps, these steps are as follows. Page 1

THE STUDY OF MOTOR VEHICLE INSURANCE Collection of data Data required for the research has been collected in the form of Primary Secondary data. Primary data has been collected through structure questionnaire and interviews. Secondary data has been collected through related books, journals, newspaper and websites. Sample design; The Sample size was 150 respondents for research. The sample technique used for research is Convenience Sampling Technique. and

4) Data presentation and interpretation


Data has been interpreted with the help of appropriate statistical technique wherever required. On the basis of data analysis the interpretation for the research has been made.

5) Conclusion
On the basis of data analyzed and considering the opinion of the policy holder conclusion has been drawn, they are Majority of two wheeler owners insured there motor vehicle from the four public sectors companies. Customers attract toward services qualities and product of insurance companies.

6) Suggestion
Following are the some suggestions: Company should be improved the duration of the policy. Company should improve the quality of services to face the competition

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THE STUDY OF MOTOR VEHICLE INSURANCE Chapter I GENERAL INSURANCE 1.1 Introduction of General Insurance. Insurance other than Life Insurance falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary, landslide, storm, hurricane, flood, earthquake, burglary, theft, riots or any damage caused to the vehicle in transit by road, air, inland waterway or rail, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.

General insurance companies have products that cover property against fire and allied perils, flood storm and inundation, earthquake and so on. There are General insurance products that cover property against burglary, theft etc. The General insurance companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of General insurance business.

In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the insured will have to bear a ratable proportion of the loss.

Personal insurance covers include policies for Accident, Health etc. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims.

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THE STUDY OF MOTOR VEHICLE INSURANCE

Accident and health insurance policies are available for individuals as well as groups. A group could be a group of employees of an organization or holders of credit cards or deposit holders in a bank etc. Normally when a group is covered, insurers offer group discounts.

Liability insurance covers such as Motor Third Party Liability Insurance, Workmens Compensation Policy etc offer cover against legal liabilities that may arise under the respective statutes Motor Vehicles Act, The Workmens Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmens Compensation policy) are compulsory by statute. Liability Insurance not compulsory by statute is also gaining popularity these days. Many industries insure against Public liability. There are liability covers available for Products as well.

There are general insurance products that are in the nature of package policies offering a combination of the covers mentioned above. For instance, there are package policies available for householders, shop keepers and also for professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-made ones.

Suitable general Insurance covers are necessary for every family. It is important to protect ones property, which one might have acquired from ones hard earned income. A loss or damage to ones property can leave one shattered. Losses created by catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless and penniless. Such losses can be devastating but insurance could help mitigate them. Property can be covered, so also the people against Personal Accident. A Health Insurance policy can provide financial relief to a person undergoing medical treatment whether due to a disease or an injury.

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THE STUDY OF MOTOR VEHICLE INSURANCE Industries also need to protect themselves by obtaining insurance covers to protect their building, machinery, stocks etc.

Most general insurance covers are annual contracts. However, there are few products that are long-term.

It is important for proposers to read and understand the terms and conditions of a policy before they enter into an insurance contract. The proposal form needs to be filled in completely and correctly by a proposer to ensure that the cover is adequate and the right one.

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THE STUDY OF MOTOR VEHICLE INSURANCE 1.2 History of the General Insurance In India, the general insurance started working since 1850 with the establishment of the triton insurance, Calcutta. In north British and mercantile catered to the requirement of insurance business. Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies


The National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and The United India Insurance Company Ltd. This General Insurance Companies are incorporated as a

company

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THE STUDY OF MOTOR VEHICLE INSURANCE

1.3 Feature of General Insurance:


Insurance does not and cannot eliminate the risk but reduces the financial burden. The insurer who undertakes the risk the risk for a small premium also gains as he will not have to pay to the entire owner who is insured. The main features are as: a) General Insurance is a contract for compensating losses: The general insurance is a contract of compensating losses. General insurance companies have products that cover property against fire and allied perils, flood storm and inundation, earthquake and so on b) Premium is charge for insurance contract: No contract is valid unless there is due consideration. In the case of insurance contracts premium is the consideration from the insured and the promise to indemnity is the consideration from the insurer. c) The payment to insured as per terms of agreement in the event of loss: The payment to insured as per terms of agreement in the event of loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. d) General Insurance is a contract of good faith: The parties to a commercial contract, according to law, required to observe good faith the seller cannot mislead the buyer in respect of transaction, but he has no obligation to disclose all information about the subject of the contract. General insurance is a contract which is totally depending upon good faith this contract is not possible without the faith on each other party.

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THE STUDY OF MOTOR VEHICLE INSURANCE e) General Insurance is contract for mutual benefits: The general insurance provides the benefit to both parties. The insurance diversify the risk. When the insured pay the premium at that time the owner of the property has right to get insurance claim on the property damaged. 1.4 Benefits of General Insurance: The need for insurance arises to safeguard the interest of people from uncertainty by providing certainty of payment at the occurrence of a happening. The following are the beneficiary of General Insurance. 1) General insurance provides security and safety. 2) Insurance affords peace of mind. 3) Insurance protects mortgaged property 4) Tax rebate. 5) Security against loan, or other types of loan. In this way there are some benefits of general insurance.

1.5 Products & Types of General Insurance


1.5.1 Motor insurance: Motor Insurance or vehicle Insurance is all about protecting against financial losses arising out of vehicle usage. With the multifold rise in usage of four wheelers, motor Insurance is also termed as motor insurance. Auto Insurance is one of the most common types of general insurance products. Car Insurance is mandatory by law and protects insured person and the people riding in his car from any legal claim or penalty made by a third party. Family members who may drive insured person car can also be covered through auto insurance.

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THE STUDY OF MOTOR VEHICLE INSURANCE Types of Motor Insurance: a) Car-Insurance : This is the fastest growing segment in the insurance sector as car insurance is mandatory while buying a new car. Major car manufacturers are tying up with leading insurance companies to provide quick insurance to its customers. Car insurance covers loss or damage by accident, fire, lightning, riots, earth quake, hurricane, terrorist attacks, explosion, theft, third partys claims and damages.

a) Two Wheelers Insurance : Two wheeler insurance is another type of popular auto insurance in India. It is governed by the Indian Motor Tariff. This insurance provides protection against natural and man made calamities like: fire, rockslide, landslide, storm, hurricane, flood, earthquake, burglary, theft, riots or any damage caused to the vehicle in transit by road, air, inland waterway or rail. Two wheeler insurance provides mandatory personal accident cover of Rs. 1 lakh to the insurer. It also protects against legal liabilities arising due to third parties injury/death or damage caused to its property.

b) Commercial Vehicle Insurance: This type of insurance covers all those vehicles which are not used for personal purpose. Trucks, buses, heavy commercial vehicles, light commercial vehicles, multi utility vehicles, agricultural vehicles, ambulances etc are covered under this insurance. The premium is calculated on the basis of the make and model of the commercial vehicle, place of registration, year of manufacture, current showroom price and whether the insurer is individual or corporate.

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THE STUDY OF MOTOR VEHICLE INSURANCE 1.5.2 Property Insurance: Insurance becomes an important aspect of owning a property. It provides financial security; a financial backup to the investment Property insurance covers land, building, and the content of the building. This type of insurance protects the property against the risks like fire, theft etc. This category also includes fire insurance, flood insurance, earthquake insurance etc. 1.5.3 Fire Insurance: Fire insurance is a compressive policy. A fire insurance policy involves an insurance company agreeing to pay a certain amount equivalent to the estimated loss caused by fire to the insured, within the time specified in the contract. The indemnity is subject to change depending upon the policy. One should confirm with the insurer about the types of risks covered, since one cannot insure the property against all types of risks of fire. 1.5.4 Health Insurance: Health insurance policy ensure guarding ones heath against any calamities that may cause long term harm to him/him life and can hamper once earning available for a lifetime. Health insurance will cover the cost of medical treatments. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. 1.5.5 Travel Insurance: Travel insurance is a means to minimize the financial risks that can occur due to b) Trip Cancellation/Interruption c) Medical emergency d) Events like delay or missed departure e) Delayed arrival or Loss of baggage f) Passport loss and legal expenses

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THE STUDY OF MOTOR VEHICLE INSURANCE g) Bankruptcy, Loss of cash, or valuables h) Pre existing medical condition 1.5.6 Liability Insurance: Liability insurance is one of the most popular because it costs much less than many other options. For example, in regard to auto insurance policies, liability insurance costs far less than full coverage. The reason for this is because full coverage insurance must pay for both your vehicle and any other vehicle involved in a collision, as well as property damage and medical expenses due to injuries to you or another party. 1.5.7 Business Insurance: Business insurance is a broad description that can be broken down into a list of nine types of insurance policies a) Property Insurance: Property insurance insures against loss or damage to the location of the business and its contents Property such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance b) Casualty Insurance: Casualty insurance insures against loss or damage to the business. Casualty insurance insures against accidents, not necessarily tied to any specific property.

Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.

Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss. Page 11

THE STUDY OF MOTOR VEHICLE INSURANCE c) Liability Insurance: Liability insurance insures against liability legally imposed upon your business because of the negligence of the business or its employees. d) Commercial auto: Commercial auto coverage insures against property damage to vehicles and damage caused to others by those vehicles. e) Business interruption Insurance: Business interruption insurance insures against loss or damage to the cash flow and profit of a business caused by the business being unable to operate because of interruption. f) Workers health Insurance: To be competitive, most businesses need to offer their workers health insurance. This insurance offers a health coverage benefit to companies employees. g) Life and disability Insurance: Life and disability insurance protects the business against the death or disability of key employees. For example, one partner carries a life insurance policy naming the partnership as a beneficiary. If that partner dies, and the business has planned properly, the proceeds of the policy can be used by the business to buy out the share of the decedent's partnership interest from the estate. h) Scripted policy: It could very well be that your business is so unique to have need for coverage that is a mixture of some of the coverage listed above or something written specifically for your particular risk. One can think of some actresses, actors, or sports stars that have had legs insured at some point in there careers. This would be an example of a scripted policy.

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THE STUDY OF MOTOR VEHICLE INSURANCE 1.5.8 Flood Insurance: This type of insurance pays the policy holder in case of any loss or damage to the property due to flood. It protects the property against the flooding.

1.5.9 Earthquake Insurance: This insurance compensates any damage to the property caused by earthquake. Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake loss. Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is merely damaged. Rates depend on location and the probability of an earthquake. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.

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THE STUDY OF MOTOR VEHICLE INSURANCE Chapter II MOTOR INSURANCE

2.1 Introduction
Two wheeler insurance provides a kind of personal accidental cover for owners, while driving the vehicle. The policy generally provides protection from any loss or damage to the vehicle arising out of natural calamity like fire, protection against third party injury, burglary etc. The amount insured will depend on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of commencement of policy period. Fast and easy claim process by most insurance companies will ensure existing customer loyalty and widen the customer base. Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured. Motor insurance policies cover against any loss or damage caused to the vehicle or its accessories due to the following natural and man made calamities. Natural Calamities: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide. Man made Calamities: Burglary, theft, riot, strike, malicious act, and accident by external means, terrorist activity, and any damage in transit by road, rail, inland waterway, lift, elevator or air. Motor insurance provides compulsory personal accident cover for individual owners of the vehicle while driving. One can also opt for a personal accident cover for passengers and third party legal liability. Third party legal liability protects against legal liability arising due to accidental damages. It includes any permanent injury / death of a person and damage caused to the property.

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2.2 Salient Feature of Motor Insurance :


1) Motor vehicle insurance Contracts are subject to the basic principles applicable to property and liability insurance in general. 2) The owner of the vehicle must bear a legal relationship to the vehicle whereby he or she stands to benefit by the safety of the vehicle, right, interest or freedom from liability and stands to lose by any loss, damage, injury or creation of liability. 3) Insurance companies issue Policy A for "Act Risks and Policy B for Comprehensive Risks under the Motor Vehicles Insurance.

2.3 Classification of motor vehicle


a. Private car: It means car purely used for private or personal use and not for carrying passengers for hire. b. Commercial vehicles: It includes all types of mechanically driven vehicles used for business purpose. This vehicle may be hire cars passengers vehicles, goods carries, tractors, vans, trucks etc. c. Motor traders vehicles: The motor of motor tractors and dealers on their premises do not belong to them but are kept for repairs or for garaged purpose. These vehicles are taken out on the road under trade plate without any specific insurance upon them.

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d. Motor-cycle, scooters: (private or commercial) These vehicles are designed for special purpose such as fire-brigade automobiles, ambulance, hearses, policy department vehicles, armed cars, snow plows, street flushers, tractors traders etc.

2.4 MOTOR INSURANCE POLICIES

2.4.1 Motor Policy 'A' (Act Policy) Policy A covers risks required to be covered under the Motor Vehicles Act. It is mandatory that every car owner be covered against Act Risks under Section 146 of Motor Vehicles Act 1988. The scope of cover is to pay compensation for death of or bodily injuries to third parties and damage to the property of third parties. While the Insured is treated as the first party and the Insurance Company second party, all others would be third parties.

2.4.2 Comprehensive Insurance Policy

The insurance policy is valid for one year. It becomes effective from the moment the payment of premium is received by the insurance company, and ends at midnight, exactly a year later. The insurance policy can be obtained through an insurance agent or a development officer of the insurance company. Usually, the new car dealer is also an insurance agent. The insurance premium depends on the car's value, the engine power, its seating capacity, and the value of other accessories like the air-conditioner The insurance policy becomes effective from the moment the payment of premium is received by the insurance company, and ends at midnight, exactly a year later & it is valid for one year.

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THE STUDY OF MOTOR VEHICLE INSURANCE A comprehensive insurance policy includes:


Third party cover. Loss / Damage to vehicle as a result of an accident, fire or theft. Risks against floods, earthquake, riots and strikes. Risk of loss/damage while in transit by road, rail, watercraft, air, elevator, etc. Terrorist activity Malicious act

Insurance policy not covers against 1) Normal wear, tear and general ageing of the vehicle. 2) Depreciation or any consequential loss. 3) Mechanical/ electrical breakdown. 4) Wear and tear of consumables like tubes. 5) Vehicle being used otherwise than in accordance with limitations as to use. 6) Damage to/ by a person driving the vehicle without a valid license. 7) Damage to/ by a person driving the vehicle under the influence of drugs or liquor.

2.5 Benefits of Policies


Policy A 1) The policy pays compensation awarded by a court of law, for death of or bodily injuries to third parties including passengers being carried and crew engaged for operation and maintenance of the vehicle. 2) It also pays damage to the property of third parties up to a limit of Rs. 6,000

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THE STUDY OF MOTOR VEHICLE INSURANCE Policy B 1) This policy covers all the risks of Policy A (Act) as well as the loss Damage to insured's vehicle also 2) Temporary spot repairs and/or towing charges to repair workshop & repairs up to Rs.1, 500 are also paid 3) Minimum value for car up to 1500cc is Rs.15, 000 and Rs.30, 000 for higher capacity Intermediary values @ Rs.2.15% Electronic and Electrical fittings @ Rs.3.40% Risks like Earth Quake, Riot and Strike; Flood and cyclone; can be opted out for discount 4) Policy B can be restricted to Fire only, theft only or Fire and theft with or without Act risks delivery for

2.6 Public sectors General Insurance companies profile:-

2.6.1 National Insurance Company Limited : National Insurance Company Limited was incorporated in 1906 with its registered office in Kolkata. Consequent to passing of the General Insurance Business Nationalisation Act in 1972, 21 Foreign and 11 Indian Companies were amalgamated with it and National became a subsidiary of General Insurance Corporation of India (GIC) which is fully owned by the Government of India. After the notification of the General Insurance Business Amendment Act, on 7th August 2002, National has been de-linked from its holding company GIC and presently operating as a Government of India undertaking. National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth of the country covering remote rural

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THE STUDY OF MOTOR VEHICLE INSURANCE areas, townships and metropolitan cities. NIC's foreign operations are carried out from its branch offices in Nepal. The product ranges, of more than 200 policies offered by NIC cater to the diverse insurance requirements of its 14 million policyholders. Innovative and customized policies ensure that even specialized insurance requirements are fully taken care of. The paid-up share capital of National is Rs.100 crores. Starting off with a premium base of 500 million rupees in 1974, NIC's gross direct premium income has steadily grown to 42799 million rupees in the financial year 2008-2009. National transacts general insurance business of Fire, Marine and Miscellaneous insurance. The Company offers protection against a wide range of risks to its customers. The Company is privileged to cater its services to almost every sector or industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping, Information Technology, Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education, Environment, Space Research etc. National Insurance is the second largest non life insurer in India having a large market presence in North.

2.6.2 New India Assurance Co. Ltd. (NIA) : New India Assurance Co. ltd. founded in 1919 by Sir Dorab Tata and the first Insurer in India fully owned by Indians. This company is the leading general insurance company in India with the largest market share and the largest in AfroAsian region except Japan. The company has largest market share in India and the largest in Afro-Asian region except Japan. In 2008-09 financial year the company Recorded a gross premium income Rs. 4812 Crores with highest Net Profit in India of Rs. 255 Crores Asset base of Rs.12984 Crores, the company investment portfolio of around Rs. 8848 Crores Free reserve and surplus of Rs. 3304 Crores Solvency ratio of 3.45 compared to 1 as stipulated as per IRDA regulations.

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THE STUDY OF MOTOR VEHICLE INSURANCE The company has a leading international insurer operating in 23 countries. An all India network of 1100 offices & 24,000 employees Innovative products developed for new areas such as information technology, banking and finance, nuclear power etc Innovative products developed for new areas such as information technology, banking and finance, nuclear power etc. The company has only Indian insurer to receive an `A' rating (Excellent) by A.M. Best Co., an international rating agency The leading underwriter for a majority of large projects in the country, including the National Satellite programmed

2.6.3 The Oriental Insurance Company Ltd : The Oriental Insurance Company Ltd was incorporated at Bombay on 12th September 1947. The Company was a wholly owned subsidiary of the Oriental Government Security Life Assurance Company Ltd and was formed to carry out General Insurance business. The Company was a subsidiary of Life Insurance Corporation of India from 1956 to 1973 till the General Insurance Business was nationalized in the country. In 2003 all shares of our company held by the General Insurance Corporation of India has been transferred to Central Government.

The Company is a pioneer in laying down systems for smooth and orderly conduct of the business. The strength of the company lies in its highly trained and motivated work force that covers various disciplines and has vast expertise. Oriental specializes in devising special covers for large projects like power plants, petrochemical, steel and chemical plants. The company has developed various types of insurance covers to cater to the needs of both the urban and rural population of India. The Company has a highly technically qualified and competent team of professionals to render the best customer service. Oriental Insurance made a modest beginning with a first year premium of Rs.99, 946 in 1950. The goal of the Company was Service to clients and achievement thereof was helped by the strong traditions built up overtime.

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THE STUDY OF MOTOR VEHICLE INSURANCE Oriental Insurance works with its head Office at New Delhi has 23 Regional Offices and nearly 900 operating Offices in various cities of the country. The Company has overseas operations in Nepal, Kuwait and Dubai. The Company has a total strength of around 16,000 employees. From less than a lakh at inception, the Gross Premium went up to Rs.58 crores in 1973 and during 2006-07 the figure stood at a mammoth Rs. 4020 crores.

2.6.4 United India Insurance Company :

United India Insurance Company Limited was incorporated as a Company on 18th February 1938. General Insurance Business in India was nationalized in 1972. 12 Indian Insurance Companies, 4 Cooperative Insurance Societies and Indian operations of 5 Foreign Insurers, besides General Insurance operations of southern region of Life Insurance Corporation of India were merged with United India Insurance Company Limited. After Nationalization United India has grown by leaps and bounds and has 18300 work force spread across 1340 offices providing insurance cover to more than 1 Crore policy holders. The Company has variety of insurance products to provide insurance cover from bullock carts to satellites. United India has been in the forefront of designing and implementing complex covers to large customers, as in cases of ONGC Ltd, GMR- Hyderabad International Airport Ltd, and Mumbai International Airport Ltd Tirumala-Tirupati Devasthanam etc. We have been also the pioneer in taking Insurance to rural masses with large level implementation of Universal Health Insurance Programme of Government of India & Vijaya Raji Janani Kalyan Yojana covering 45 lakhs women in the state of Madhya Pradesh , Tsunami Jan Bima Yojana in 4 states covering 4.59 lakhs of families , National Livestock Insurance and many such schemes.

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THE STUDY OF MOTOR VEHICLE INSURANCE Chapter III

RESEARCH METHODOLOGY 3.1 Introduction:


Research is the systematic method of collection, recording facts in the forms of numerical data relevant to the formulating at a problems and arriving at a certain conclusion over the problem bases on the collected data. Research can be defined as logical and systematic means or technique to discover new facts or verify facts, analyze their sequence, interrelationship and casual explanations which were derived with an appropriate theoretical frame of reference develop new scientific tools, concept theories which would facilitate reliable and valid study on human behavior. Research in generally refers to a search for knowledge. In fact, research is an art of scientific investigation. It is actually a voyage of discovery. We all possess the vital instinct of inquisitions for, when the unknown comforts us, we wonder and our inquisitiveness makes us probe and attain fuller undertaking of the unknown. Research is an academic activity and as such the term should be used in a technical sense. According to Clifford Woody :research companies defining and redefining problem, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, making deduction and reaching conclusion and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis. It is the pursuit of truth with the help of study, observation compassion and experiment. In short, the search for knowledge through objectives and systematic method of finding solution to a problem is research. As such the term research refers to the systematic method consisting of enunciating the problems formulating data, analysis, collecting the fact of certain conclusion the facts and reaching of solution towards the concerned problem or in certain generalization for some theoretical formulati

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3.2

Research Problem
Define research problem allows the researcher to focus on the how, what,

which, who, when, where, why question needed to guide the formulation or research objectives. All the efforts, time and money spent to execute research will waste if research problems are misunderstood. Motor insurance business is growing very rapidly today. Now private player also take part in such business 13 companies operating in general insurance business in it only 4 companies are public sectors & remaining 9 in private sectors & with the varieties of policy to choose form, the motor vehicle owner faces problems in selecting best policy and the motor vehicle owners approach towards motor insurance policy.

3.3

Research Objectives:

The study had following objective: 1. To study the awareness among the people about motor vehicle insurance. There are mainly three policies available for the motor vehicle insurance in India. While purchasing the new vehicle the owner of vehicle does not pay attention towards the motor insurance. So to study the awareness among the people about motor vehicle insurance is my first objective.

2. To acquire proper knowledge about various type of insurance policy available. The three policy available for the motor vehicle insurance in India and in these three policy there characteristics are also different so to acquire proper knowledge about various type of insurance policy available is my second objective

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3. To study the preference of policy of the customers. Among the three policies which is the policy the owner of motor vehicle preferred according to there need & which policy is most popular among the motor vehicle owner is my third objective.

4. To study the performance of the insurance company. There are mainly four public under taking insurance companies. They perform at different level. So to study the performance of these companies is my fourth objective.

3.4

Research Design
It is the plan structure and strategy of investigation conceived so as to obtained

answers to research questions and research design is the specification of methods and procedures for acquiring the information needed.

Steps of research design


Identifying and stating the management problem and problem area Crystallizing, the objectives, purposes, rationale, scope and expected limitation of the research Identifying the types of data to be collected and its sources Specifying the methods of data collection and analysis Finalizing a systematic scheme for proceeding with the project including sampling, survey analytical frame work and report writing.

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3.5 Data collection:


Data required for the research will be collected in the form of Primary and Secondary data

3.5.1 Primary Data: Primary data was collected through structure questionnaire and interviews. The questionnaire is used in research project was designed for self-administration. For my study primary data refers to data collected directly from the two wheeler owners in Amravati city.

3.5.2 Secondary data: Secondary data was collected through related books, journals, newspaper and websites.

3.6

Tools of Data Collection


Data was collected through structured questionnaires of multiple choice

questions based on objectives of studies. A structured questionnaire is a formal list questions frame so as to get the facts. The interviewer asks the questions in accordance with prearranged order. A questionnaire was designed keeping in mind research objectives. Following are the advantages of using questionnaires as the tool of data collection. 1) It facilitates the collection of information in systematic and orderly manner. 2) It is free from the bias of interviewer. 3) Answers are in respondents own words. 4) Respondents have adequate time to give answers. 5) The qualitative and quantitative data can be collected. 6) Large samples can be covered. Hence researcher uses questionnaires as tool for data collection.

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3.7

Sampling :
Universe was two wheeler owners of Amravati city.

3.7.1 Universe:

3.7.2 Sample Size: Sample size was 150 two wheeler vehicle owners. 3.7.3 Sampling Technique: The respondent for the research was chosen with the help of Convenience Sampling Technique.

3.8 Limitation of study:


Every research has its own limitation. The limitations of this research are as follows: 1. The study will be conducted only within the universe of Amravati city. 2. The study will be limited to the two wheelers owner only.

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Chapter IV

DATA ANALYSIS & INTERPRITATION

The process of converting the information from a questionnaire so that it can be manipulated & analyzed is referred to as data preparation. This process normally follows data entry & data tabulation. The purpose of the data preparation is to take data in its raw form & convert it into meaningful & information. While conducting a research, presentation of collected data is an important stage. The collected data should be interpreted properly so as to reach out a proper conclusion. Thus data collected must be edited & tabulated into statically form on the basis of questionnaire. After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation & then drawing statistically inferences. Editing is the procedure that improves the quality of the data for coding. Tabulation is the part of technical procedure wherein the classified data are put in the form of tables. After analyzing the data, the researcher should have to explain the findings on the basis of some theory. It is known as interpretation. Coding operation is usually done at this stage through which the categories of data are transformed into symbol that may be tabulated & counted. Tabulation the simple process of counting the number of respondents who gave answer to each question in the questionnaire. The successful completion of every study depends on the authenticity of the observation. To observe the collected data carefully, following is the detail analysis of data collected through a structured questionnaire, the analysis & interpretation of 150 respondents is given below.

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4.1 Age of respondents


Table no.4.1: Age wise distribution of respondents

Age group(in Sr. No. 1 2 3 4 years) 18 to 25 26-45 46-60 Above 60 Total

No. of Respondents 84 35 20 11 150 Percentage 56 23.33 13.33 17.33 100 (%)

The consideration of age factors is very important because the awareness of motor insurance & seriousness to getting the motor insurance policy vary as per age group. This table shows that 84 respondents from the age group of 18to25 ,which covers the majority of respondents i.e. 56.00% and 35 respondents from the age group of 26-45 there percentage among these is 23.33%. The 3rd position occupied by 20 hence it can be concluded that most of the respondents are belongs to 18 to 25 year age group. From above table we concluded that out of 150 respondent majority of respondents i.e. 85 respondents from the age group of 18-25

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Graph no. 4.1 Age wise distribution of respondents


90 80 70 no. of respondents 60 50 40 30 20 10 0 18 to 25 26-45 46-60 Above 60 AGE GROUP (in year)
Source primary data

84

35 20 11

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4.2 Qualification of respondents


Table no. 4.2 Qualification wise distribution of respondents Sr. no. 1 2 3 4 Qualification S.S.C. H.S.C. Graduation Post Graduation Total Respondents 24 12 56 40 150 Percentage (%) 16 20 37.33 26.67 100

From the above table it can be concluded that 24 respondents are from the S.S.C completed that cover 16%. And 30 respondents are from the H.S.C completed and it is clear those majority respondents having 56 respondents from Graduation completed respondents i.e. 37.33 % and 40 respondents completed their post graduation. From the above table we can conclude that the majority respondents i.e. 56 respondents completed there Graduation.

Graph no.4.2. Qualification wise distribution of respondents

Respondents
60 No. of respondents 50 40 40 30 30 20 10 0 S.S.C. H.S.C. Graduation Post Graduation Qulification
Source primary data

56

24 Respondents

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4.3 Occupation of respondents


Table no.4.3 Occupation wise distribution of respondents Sr.no. 1 2 3 4 5 Occupation Govt. Employee Semi-govt. Business Student Other Total Respondents 21 17 41 61 10 150 Percentage (%) 14 11.33 27.33 40.67 6.67 100

From the table, it can be concluded that 21 respondents are from the govt. Employee, 17 respondents are semi govt., 41 respondents from Business, majorities of respondents i.e. 61 are from student and 10 respondents are belongs to other groups. At the last we see that the majority of respondent belongs to the student category.

Graph no. 4.3 Occupation wise distribution of respondents:


70 60 no of Respondets 50 40 30 20 10 0 Govt. Semi-govt. Business Employee Occupation
Source primary data

61

41

21

17 10

Respondents

Student

Other

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4.4 Monthly Income


Table No.4.4 Monthly income wise distribution of respondents Sr.No. 1 2 3 4 Income Range Below 10000 10001-25000 25001-50000 Above 50001 Total Respondents Percentage 67 42 22 19 150 44.67 28 14.67 12.66 100

This table shows majorities of respondents are having their monthly income up to Rs. 10,000. 42 respondents of total respondents are between 10,001- 25,000. And 22 respondents of total respondents are between 25,001- 50,000 and 19 respondents of total respondent have their monthly income above 50,000 It can conclude that the majority of respondents income is below 10000.

Graph No.4.4
Monthly income wise distribution of respondents Monthly income of Respondents

19 Below 10000 22 67 10001-25000 25001-50000 Above 50001 42

Source primary data

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4.5 Number of motor vehicle owners:


Table no. 4.5 Ownership of Motor vehicle wise distribution of respondents. Ownership of Sr.No. 1 2 motor vehicle Yes No Total No of Respondents 124 26 150 Percentage (%) 82.67 17.33 100

Above table shows that the 124 respondents i.e. 82.67% respondents are owner of the motor vehicle whereas 26 respondents i.e. 17.33% are not used motor vehicle From above we concluded that the no. of motor vehicle owners are more among the 150 respondents.

Graph No.4.5
Number of motor vehicle ownership wise distribution of respondents.

No. of motor vehicle owners wise disribution of respondents

26

Yes No

124

Source primary data

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4.6 Type of Motor vehicle wise Table no.4.6


Motor vehicle wise distribution of respondents Type of motor Sr.No. 1 2 3 4 vehicle Two wheeler Four wheeler Both Other Total No. of Respondents 92 10 11 11 124 Percentage (%) 74.19 8.06 8.87 8.87 100

Above table gives the clear idea about the majority of respondents i.e. 92 having two wheeler 10 respondents have only four wheeler and 11 respondents are those respondents who have four wheeler as well as two wheeler and in other have also same i.e. 11 respondents. The conclusion is that the two wheeler owners are more than other.

Graph No.4.6
The types of motor vehicle wise distribution of respondent types of motor vehicle wise distribution of Respondents

Both , 11 Four wheeler , 10

other, 11 Two wheeler Four wheeler Two wheeler , 92 Both other

Source primary data

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4.7 Motor insurance awareness:


Table no.4.7 Motor insurance awareness wise distribution of respondents

Awareness of Sr.No. 1 2 motor insurance Yes No Total No of Respondents 106 18 124 Percentage (%) 82.25 17.75 100

Above table shows that 108 respondents are aware about the motor insurance and remaining 22 respondents are much not aware about the motor insurance. At last the conclusion is that the awareness of motor insurance among the motor vehicle owners is more.

Graph no.4.7
The Motor insurance awareness wise of respondents

No of Respondents
No, 18

Yes No

Yes, 106
Source primary data

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4.8 Insured motor vehicle


Table no.4.8 Insured motor vehicle wise distribution of respondents Sr.No. 1 2 Insured motor vehicle Yes No Total Respondents 86 16 102 Percentage (%) 84.31 15.79 100

Above table shows that 86 respondents are insured there two wheeler and 16 are nor insured there vehicle. It means that most of two wheeler owners insured there two wheeler vehicle.

Graph no.4.8 The insured motor vehicle wise distribution of respondents

Respondents
Respondents , 16

Yes No

Respondents , 86
Source primary data

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4.9 Insurance Companies


Table No. 4.9 Insurance company wise distribution of respondents Sr.No. Companies name The 1 National Insurance 19 Assurance 25 Insurance 18 Insurance 13 11 86 15.11 12.79 100 20.93 29.06 22.09 Respondents Percentage (%)

company Ltd. New India

Company Ltd. The Oriental

Company Ltd. United India

4 5

Company Ltd. Other Total

From above table we concluded that The National Insurance company Ltd secure 19 respondents from the total respondents. The New India Assurance Company Ltd. Secured 25 respondents from the total respondents and they have majority. 18 respondents from the total no. of respondents get policy from the Oriental Insurance Company Ltd. United India Insurance Company Ltd. Secure 13 respondents from the total respondents. Other company like Bajaj, Ifco-Ticko, Reliance, secure 11 respondents from the total respondents It concluded that the The National Insurance Company Ltd. Company is leading company among the others.

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Graph No. 4.9

Insurance Companies wise distribution of respondents

Respondents
30 25 25 No. of respondents 20 15 10 5 0 .The National New India The Oriental United India Insurance Assurance Insurance Insurance company Ltd. Company Ltd.Company Ltd.Company Ltd. Insurance Companies
Source primary data

19

18 13 11 Respondents

Other

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4.10 Reason of insurance


Table no.4.10 Reason of insurance wise distribution of respondents Sr.No. 1 2 3 4 Reason of insurance For Safety Friends suggested Defense from penalty other Total Respondents 50 08 20 08 86 Percentage % 58.13 9.30 23.25 9.30 100

Above table shows that majority of respondents insured his motor vehicle for safety purpose 50 respondents from the 86 respondents insured his motor vehicle. 08 respondents insured his motor vehicle because of friends suggestion, 20 respondents insured his motor vehicle because they want to defense form the penalty and only 08 respondents their own other reason. Now it concluded that the most of the two wheeler insurance holders insured there vehicle for safety propose

Graph 4.10 Reason of insurance wise distribution of respondents

Respondents
60 No of respondents 50 40 30 20 10 0 For Safety Friends Defense from suggested penalty Reson of Insurance
Source primary data

50

20 8 8 Respondents

other

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4.11 Policy adoption


Table no.4.11 Policy adoption wise distribution of respondents Sr.No. 1 2 Policy adoption Motor Policy A Third Party Policy Comprehensive 3 Insurance Policy Total 24 135 27.90 100 Respondents 32 30 Percentage 37.20 34.88

The above table clarify majority that is 32 respondents i.e.37.20 respondents from the total respondents adopt Motor Policy A and 30 respondents i.e.34.88 respondents from the total respondents adopt Third party policy and 24 respondents adopt Comprehensive Insurance Policy. It concluded that the most of the two wheeler owners are get Motor policy A for insurance purpose.

Graph 4.11
Policy adoption wise distribution of respondents

Respondents
35 No of responddents 30 25 20 15 10 5 0 Motor Policy A Third Party Policy Comprehensive Insurance Policy Policy adoption
Source primary data

32

30 24 Respondents

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4.12 Reason of selection policy


Table no.4.12 Reason of selection specific policy wise distribution of respondents Sr.No. 1 2 3 4 Reason of insurance Less premium Friends suggested Policy period Less documentation Total Respondents 29 27 24 06 86 Percentage 33.72 31.39 27.90 6.97 100

Above table shows that majority of respondents insured his motor vehicle for less premium purpose i.e. 29 respondents from the 86 respondents. 27 respondents insured his motor vehicle because of friends suggestion, 24 respondents insured his motor vehicle because they want to only Policy period consideration and only 06 respondent get policy for defense form the penalty. Now it concluded that while getting insurance policy the insurance holder see the premium of insurance.

Graph no. 4.12


Reason of selection specific policy wise distribution of respondents
Less documentation ,6

Respondents
Less premium , 29

Policy period , 24

Less premium Friends suggested Policy period Less documentation

Friends suggested, 27
Source primary data

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4.13 Claim Benefits:


Table no.4.13 Claim benefit wise distribution of respondents No. of Sr.No. 1 2 Claim Benefit Yes No Total Respondents 22 64 86 Percentage (%) 25.58 74.42 100

From the above table we came to know that 25.58 of respondents taken the benefits of claim and remaining 74.42% of respondents not taken any type of claim benefit. From above it can understand that the most of the insurance holder dose not get the claim benefits.

Graph no. 4.13


The Claim benefit wise distribution of respondents

No. of Respondents
22

Yes No

64

Source primary data

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4.14 Improvement in the policy:


Table No. 4.14 Improvement in the policy wise distribution of the respondents. Improvement in the Sr.No. Existing policy The premium should be 1 minimum Period of the policy should 2 3 be increase Both A & B Total 17 49 86 19.77 56.98 100 20 23.26 No. Of Respondents Percentage %

The above table clarify that 20 respondents of total respondents feel that the period of policy should minimum and 17 respondents of total respondents feel that the period of policy should be increase and majority respondents i.e. 49 from the total respondents feel that both the above improvements must be implemented in the future policy. From above we can conclude that most of the insurance holders want the premium should be less & period of the policy should be increase.

Graph No. 4.14 Improvement in the policy wise distribution of the respondents.

Respondents
20 The premium should be minimum Period of the policy should be increase 17 Both A & B

49

Source primary data

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THE STUDY OF MOTOR VEHICLE INSURANCE Chapter V

Observation, Conclusion and suggestion 5.1 Introduction

Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured. Public sectors and private sectors both are played very well in the market since the insurance sector was opened to private player. This type of company not only help full for the create awareness among the people but also create the employment opportunity for employment.

5.2

Observation
Following are the observation, which were drawn from the data collected It appears that 84 respondents from the age group of 18to25, which covers the majority of respondents and 35 respondents from the age group of 26-45 there percentage among these 20 respondents are belongs to 18 to 25 year age group. It appears That 21 respondents are from the govt. Employee, 17 respondents

are semi govt., 41 respondents from Business, majorities of respondents i.e. 61 are from student and 10 respondents are belongs to other groups. It is seen that majorities of respondents are having their monthly income up

to Rs. 10,000. 42 respondents of total respondents are between 10,00125,000. And 22 respondents of total respondents are between 25,001-50,000 and 19 respondents of total respondent have their monthly income above 50,000 It is seen that the 124 respondents are owner of the motor vehicle whereas 26 respondents are not used motor vehicle It is seen that majority of respondents i.e. 92 having two wheeler 10 respondents have only four wheeler and 11 respondents are those respondents who have four wheeler as well as two wheeler and in other have also same i.e. 11 respondents Page 44

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It appears that 108 respondents are aware about the motor insurance and remaining 22 respondents are much not aware about the motor insurance It is seen that 86 respondents are insured there two wheeler and 16 are nor insured there vehicle It is seen that The National Insurance company Ltd secure 19 respondents from the total respondents. The New India Assurance Company Ltd. Secure 25 respondents from the total respondents that have majority and The Oriental Insurance Company Ltd Secure 18 respondents from the total respondents. United India Insurance Company Ltd. Secure 13 respondents from the total respondents and other company like Bajaj, Ifco-Ticko, Reliance, secure 11 respondents from the total respondents.

It is seen that that majority of respondents insured his motor vehicle for safety
purpose 50 respondents from the 86 respondents insured his motor vehicle. 08 respondents insured his motor vehicle because of friends suggestion, 20 respondents insured his motor vehicle because they want to defense form the penalty and only 08 respondents their own other reason. It is clarify that majority that is 32 respondents from the total respondents adopt Motor Policy A and 30 respondents from the total respondents adopt Third party policy and 24 respondents adopt Comprehensive Insurance Policy. It is seen that majority of respondents insured his motor vehicle for less premium purpose i.e. 29 respondents from the 86 respondents. 27 respondents insured his motor vehicle because of friends suggestion, 24 respondents insured his motor vehicle because they want to only Policy period consideration and only 06 respondent get policy for defense form the penalty.

It is clarify that 25.58 of respondents taken the benefits of claim and remaining
74.42% of respondents not taken any type of claim benefit.

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THE STUDY OF MOTOR VEHICLE INSURANCE It is clarify that 20 respondents of total respondents feel that the period of policy should minimum and 17 respondents of total respondents feel that the period of policy should be increase and majority respondents i.e. 49 from the total respondents feel that both the above improvements must be implemented in the future policy. It is clarify that The New India Assurance Company Ltd performance is all level in India is best and in Amravati is also best.

5.3

Conclusion
Following are the conclusions, which were drawn the data collected. Majority of two wheeler owners insured there motor vehicle from the public sectors companies. A public sectors company faces the competition from the private sectors insurance companies. Customers attract toward insurance companies services qualities and product. While insuring the motor vehicle the people take into consideration mostly is the Defense from penalty. A very few customer get the benefits from the motor insurance companies. New India Assurance Company ltd is the most preferable general insurance company in Amravati city. The awareness of general insurance among is more.

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5.5

Suggestions
The conclusion derived, give rise to various suggestions by the researcher. The suggestions are given below. As the entry of private insurance companies the competition is increased in the market if any company want to survive for a long duration, the company should considered the following points. a) Service quality b) Performance of the company c) Customers satisfaction The success of any company totally depends upon the satisfaction of customers so the companies need to satisfy the all needs of customers The company needed to offer more reliable policies to the customer according to the need of customers. The insurance companies increased the period of insurance policy The insurance companies apply the personalized approach for handling the customers.

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