The Indian Motor Third Party Declined Risk Insurance Pool operates in the auto arena for the commercial vehicles to have i. equitable and fair sharing by all insurers, ii. simplicity to administer and iii. to bring claims management efficiency
The new pool structure is an important step towards addressing the issues around commercial vehicle third-party insurance and reforming them, the structure is simple to implement and ensures there are no supply-side constraints on availability of insurance covers.
IRDA fixes tariffs for third party motor insurance premiums to ensure that there are no supply-side constraints, that is, vehicles considered high risk are not denied cover.
According to Knock for Knock Agreement, irrespective of who was negligent, provided the damage is covered under the policy, the insurers covering the damage will not exercise subrogation rights against the party involved in the accident. They will indemnify their insured subject to the terms of policy.
The knock for knock agreement benefits: i. the insurers as they avoid intercompany litigation and thereby save costs; ii. it benefits the insureds because they recover the claims straightaway from their insurers; iii. it also benefits the insuring public because the reduction in the cost claims is eventually reflected in reduced premiums
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