Private car

First-party car insurance in Bangladesh 

Motor insurance Bangladesh

Definition of Motor insurance

Motor insurance, also known as car insurance, covers the risks of using a vehicle in the road. First-party car insurance is more popular than the third-party coverage. This covers the risks of the insured in respect of own damage of the motor vehicles. The government of Bangladesh has made this insurance compulsory for the owners or drivers of the motor vehicles. The motor vehicle ordinance 1983 defines ‘Motor Insurance’ the insurance for the vehicles with motor or engine.

First-party car insurance in Bangladesh

Two Types of Private Car Insurance:

Generally, motor insurances are of two types i.e. ‘Act Liability Insurance’ and First part or comprehensive insurance’.

Thirst party or Act Liability insurance policy covers the liability of motor vehicle owners imposed by law of the land.

On the other hand, ‘first-party insurance provides a comprehensive cover for the motor owners covering the own damage and act liability.

For insurance purposes, you motor vehicles are classified based on the types of registration & use of the vehicle for private purposes only. So, if you use your motor car for business purposes i.e. having registration of commercial use, it cannot be insured as the private car. Private motor car insurance is solely for the car used for family or private uses.

First party car insurance costs & cover

Unlike act liability coverage of motorcycle insurance, first-party insurance covers the risks of loss or damage to your car or automotive vehicles. It means the own damage of the vehicle by any fortuitous and accidental event in the road has been covered under this type of insurance. For this reason, this broad insurance is commonly called ‘comprehensive insurance’.

What is covered under First-party car insurance?

The scope of cover under first-party car insurance is compressive and wider, with fewer exclusions. This insurance covers the following perils/risks:

First party car insurance costs & cover

First party insurance’s cope of cover:

  • By Fire, explosion, self- ignition or lightning,
  • By Burglary, Housebreaking or theft,
  • By Riot & Strike including malicious damage and terrorist activities,
  • By Earthquake (fire and shock damage),
  • By flood,
  • By Typhoon, Hurricane, Storm, Inundation, Cyclone,
  • By Hailstorm,
  • By Frost,
  • By accident external means, if in transit by road, rail, inland waterway, Lift- elevator or Airs
  • By Act liability Insurance Risks (THIRD PARTY INSURANCE RISKS)

If and when your vehicles fall prey to the one or more of the above perils, and suffers loss or damage, then your insurance policy will indemnify or compensate you for the financial loss for the prescribled limit of liability. In most case, the insurance company will make your car repaired with the motor parts of equal quality and standard.

What is NOT covered under First-party car insurance?

The perils that are not covered under the traditional car insurance are called exclusions or excluded perils. ‘Exclusion’ is one of the tools for insurers or insurance company for designing an insurance cover. This is practiced worldwide.

‘Exclusion’ helps insurer avoid any hazard relating to the moral standard of insurance policyholders. Examples of moral hazard include ‘self-ignition or deliberate damage to own automotive’.

It is not possible or practical for the insurance company to compensate you while you deliberate damage your motor vehicles for getting the benefit of the insurance claims. So, these types of perils or risks are not covered.

 Here is a list of risks or perils not covered by first party car insurance in Bangladesh:

  • Wear and tear
  • Substantial loss,
  • Mechanical and electrical halt
  • Any damage suffered while using in uncovered geography
  • Any damage suffered while driving by un-authorized drivers
  • Any damage suffered while driving by drunken driving
  • Loss or damages caused by War
  • Loss or damages caused by nuclear risks

Car insurance calculator in Bangladesh

By giving input of your vehicle type, cubic capacity, seating capacity and loading capacity in our web-based application, you can calculate your cost for car insurance for your automotive here.

  • Vehicle type: here you have to insert the type of your automotive for example; motorbike, private car, bus, truck, crane, covered van, van, or other specialized vehicles.
  • Vehicle registration type: here you have to insert the type of registration done by the Bangladesh Road Transport Authority (BRTA) for your motor vehicles, such as private or commercial or special.
  • Cubic capacity (CC): This is known as CC in the motor insurance market. This describes the original cubic capacity of your vehicles. The cost of the car insurance varies as per the cubic capacity of a particular vehicle.
  • Seating capacity (SC): Yes, this is commonly known as SC. It tells of the number of people the vehicle can carry in its own seats. This is usually fixed by the manufacturer of the vehicles.
  • Loading capacity (LC): The load an automotive can carry is known as loading capacity or LC. In Bangladesh, this is expressed as ton/ metric ton, which is equivalent to 1,000 kilograms/Kg.

Motor tariff in Bangladesh

In Bangladesh, motor insurance is a tariff-based insurance product. Insurance tariff is the declaration of rates and terms for ensuring motor vehicles. The central rating committee of the Insurance Development and Regulatory Authority (IDRA) of Bangladesh is responsible for defining premium rates and terms for a particular type of motor insurance.

The latest motor tariff of Bangladesh was introduced in the year 2010. Afterward, there were curtain CRC circulars issued for revision of motor insurance premiums and limit of liability applicable to the third party or first party motor insurance policy so issued by insurance companies and/or its agents.

You can purchase our third or first party online insurance here or can talk to us: 019 8282 7875.