In India Motor vehicle insurance is being provided in two forms

1. Public Risk Insurance.
2. Package policy.

Public Risk Insurance is compulsory for all motor vehicles registered and plying on road. This gives protection to the owner of the vehicle from the Third Party legal liability which may arise at the time of using the vehicle, in case of accident causing injury / Death and also property damage.

Under this policy the Insured (Individual) is to be covered against personal accident which is mandatory in two wheeler and Private Cars.

The package policy covers in addition to the above coverages the “Own Damage “portion of the vehicle is also covered, including theft of the vehicle.

In passenger carrying vehicles all the passengers are to be insured for the legal liability which is also mandatory.

In the package policy nowadays so many other add on covers such as:

• Nil depreciation cover
• Return to invoice cover
• Courtesy Car ( Private car only )
• Medical expenses ( Private car only )

are being provided with additional premium.