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Types of motor insurance policy in Bangladesh

Types of motor insurance policy in Bangladesh

Types of motor insurance policy in Bangladesh

 

Insurance is the mechanism for transferring the legal liabilities of the motor vehicle owners to the insurance companies. In Bangladesh, motor insurance is one of the compulsory types of insurance. However; motor insurance policy can be arranged in various ways for various types of the vehicles involved.

Motor insurance policies are insurance contracts concluded between the motor vehicle owner and the insurers. This contracts would act for the owner if they get involved in the physical loss or damage to any third party i.e. passers-by and any property owned by the person other than the vehicle owners. We should note that the insurance premium for all types of the motor vehicles is driven by the Bangladesh Motor Tariff.

 

Primarily motor insurance policies are divided into 02 broad classes based on the purposes and uses of the motor vehicles. This classification is based on the use of the vehicle, which is also mentioned in the vehicle registration card issued by BRTA.

  1. Insurance for private motor vehicle: This policy is offered to the vehicles that would solely be used for private use by the owners. It may be personal use for daily use or for pleasure purposes. For your private vehicles, you can opt for any of the two types of policies:

 

  • Comprehensive Policy:

It has wider coverage for your vehicles. You can get insurance claims money in respect of:

 

  1. i) Own damages or loss of the Motor Vehicle and/or its accessories whilst thereon,

 

  1. a) by fire explosion, self-ignition or lighting
  2. b) by burglary housebreaking or theft
  3. c) by Riot and Strike including malicious activities d) by Earthquake (Fire & Shock damage)
  4. e) by Flood, Typhoon, Hurricane, Storm, tempest, inundation, cyclone, hailstorm, frost.
  5. f) by accidental external means
  6. g) whilst in transit by road, rail, inland waterway, lift, elevator or air.

 

  1. ii) Third Party Liability in respect of accident committed by the driving of the motor vehicles. This includes all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of,

 

  1. a) death of or bodily injury to any person except the person who is under
  2. b) damage to property other than property belonging to the insured or held employment of the insured.

 

Limit of liability under the insurance policy would be limited to the followings:

 

  • Maximum payable BDT 20,000 (death). in trust by or in the custody or control of the insured.

 

  • Maximum Payable BDT 50,000 (property damage).

 

  • Act Liability Policy :

It involves third party liability in respect of accident usually caused by the motor vehicles. The coverage are similar to those described in the above paragraph.

 

 

  1. Insurance for commercial motor vehicles: This insurance is suitable for vehicles which are used for business purposes. It may be for business organization or for rent etc.

There are two types of insurance policies found in Bangladesh.

 

  • Comprehensive Policy: It covers loss or damage in respect of
  1. i) Own damages or loss of the vehicle and or its accessories whilst thereon,
  2. a) by fire explosion, self-ignition or lighting
  3. b) by burglary housebreaking or theft
  4. c) by Riot and Strike including malicious activities d) by Earthquake (Fire & Shock damage)
  5. e) by Flood, Typhoon, Hurricane, Storm, tempest, inundation, cyclone,
  6. f) by accidental external means
  7. g) whilst in transit by road, rail, inland waterway, lift, elevator or air.

 

  1. ii) Third Party Liability of the insured against all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of the followings, hailstorm, frost.

 

  1. a) against any liability which may be incurred by him in respect of the death or bodily injury to any person or damage to property of a third party caused by or arising out of the use of the vehicle in a public place. the vehicle caused by or arising out of the use of the vehicle in a public place.
  2. b) against the death of or bodily injury to any passenger of a public services.

 

  • Act Liability Policy:

Third Party Liability of the insured against all sums including claimant’s costs and expenses if and when the policyholders are liable for

  1. a) and death
  2. b) the death of or bodily injury to any passenger of a public service or bodily injury to any person or damage to property of a third party caused by or arising out of the use of the vehicle in a public place.

 

To sum up, the use and purpose of vehicle use determine the types of insurance policy to be purchased. The premium is dominated by the insurance tariff in Bangladesh.

 

 

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