The third-party cover has a limited liability of Rs. 7.5 lakh in case of damage to the vehicle or property of the third person.
The GIC Re as administrator shall be paid a fee of 2.5% of the total premium on motor third party insurance business in respect of the business underwritten for the pooled account.
In India, motor insurance has the highest claim ratio due to Third Party Liability, predominately due to Commercial Vehicles.
Motor Vehicle has been defined in the Motor Vehicle Act 1988, Section 2 (27) as a mechanically propelled vehicle adapted for use upon roads, whether power of propulsion is transmitted thereto, from an external or internal source and includes a chassis to which a body has been attached and a trailer, but does not include a vehicle running upon fixed rails.
Trailer is any truck, cart, carriage or other vehicle, without means of selfpropulsion including agricultural implements drawn or hauled by self-propelled vehicle.
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