What you need to know about your Motor Insurance (2)
The first motor car to appear on a British road was Benz in 1894. According to law, the vehicle was not to operate on a public road with a speed exceeding 5km per hour. A man has to carry a red flag and walk in front of the car. In 1896 the law was changed. They could now travel 20km per hour. There were many accidents involving damage to property and injury to people. Often the person responsible for the accident had no insurance. They also did not have enough money to settle the claim.
Motor insurance was available from around 1898 and to 1903. Motor vehicles appeared in larger numbers on road after the First World War. In 1909 there were less than 100,000.00 vehicles in Britain. In 1919 there were 330,000.00 vehicles. In 1929 there were 2,130,000.00. By 1929, over 6000 people were killed annually in road accidents.
Many accident victims and their dependents were unable to recover damages because the motorist concerned with the accident was uninsured. To protect accident victims, many countries acted by making third-party liability insurance compulsory. Norway was the first country in 1912. Followed by Swiss in 1914, Denmark in 1917, Massachusetts in 1927
New Zealand and Sweden in 1929. In the UK, the road traffic act 1930 made it compulsory to have insurance to cover personal injury to third parties other than passengers carried free of charge. There was an amendment in 1972 which included this exemption.
In Ghana, the third party act is Act 1958. The following are a few of the things you need to know about your motor insurance;
- Third-party motor insurance is compulsory:
The motor third party risks act defines a road as any means or parochial road and includes bridges over which a road passes, and any roadway to which the public is granted access and any roadway declared to be a road by the minister. The same act mandates a person not to use, or permit any other person to use a motor vehicle on a road unless there is in force such a policy of insurance or such a security in respect of third party risks. These third-party risks are all covered under the motor third-party insurance policy offered by most non-life insurers. This policy covers the person who is not part of the contract that is the public who also uses the road and the vehicles. These third parties include; fare-paying passengers, pedestrians, members of our household, and other occupants. The policy pays for compensation for bodily injury or death sustained by any member of your household, fare-paying passengers, pedestrians, or any other occupants, other than you or the driver whilst getting into, on or getting out of your vehicle which results from an accident.
This means, for a third-party insurance policy, the general public should be more concerned and make sure especially all commercial drivers have done this insurance because this policy protects them. There should not be at any point that we should support drivers when they make the statement that, “if not the police, they would never do their insurance because they do not see any good in it”. The good is for us the fare-paying passengers, pedestrians and other occupants.
- There is a limit on the third party property damage
One component covered under the motor insurance is the damage the insured or the driver permitted by the insured to the driver could cause to the properties belonging to other people who are not part of the contract. In simple terms, a driver could run into someone’s building, kiosks, shop, vehicle, building a wall, traffic light or any other property belonging to someone else other than the insured. The motor insurance covers the cost of replacing or reinstating the property but there is a limit which is normally around GHS 2,000.00. Any amount that exceeds this would be paid by the insured himself.
Where the insured thinks the amount to cover damage to third-party property is insufficient, he has the option of increasing the limit by paying an additional premium. The rate for the additional premium ranges between 1% – 2.5% on the additional amount or benefit one would like to add and this is based on the risk category or the use of the vehicle.
- Third-party injury or death benefit is unlimited
Usually, people confuse themselves with the third party property damage which has a limit and the third party injury or death which is unlimited.
The most important coverage, and which also made motor insurance compulsory in most countries is the cover for third party injuries and death as a result of an accident from/to the vehicle. The moment you put your vehicle on road, you are responsible for the injury or death you could use your vehicle to cause to fare-paying passengers in your vehicle, pedestrians, members of your household and other occupants.
The third-party motor insurance is not for the driver or the insured but for the public who sit in vehicles and also use the road. We are the main beneficiaries. With this, I believe we should then be more concerned about vehicles that are not insured. We need to check the insurance stickers before we board a vehicle. This is for our safety when there is an accident.
- Personal accident is limited in motor insurance
Most drivers are at risk. When there is an accident, the driver of the vehicle is not considered a third party and as such is not entitled to the unlimited benefit. The driver then benefits from the Personal Accident cover which is capped at GHS 2,000.00. There is no way this amount would ever be sufficient. The driver only becomes a third party when the accident was caused by another vehicle. The vehicle that caused the accident driver would also not benefit from the unlimited third-party amount.
This is why it is so important why drivers need to have a standalone Personal Accident policy that can give them a bigger limit. With the standalone Personal Accident policy, the driver can take a bigger limit by paying an additional premium. Just talk to your insurer about this.
- Emergency treatment
The insurers will pay the reasonable medical expenses incurred in connection with any bodily injury by violent accidental and external means sustained by you the driver or the insured and/or any occupants of your vehicle as to the direct result of an accident to your vehicle but such amount shall not exceed the authorized medical expenses limit shown in the schedule. The amount normally ranges from GHS40.00 – GHS60.00 per person. The period within which liability is admissible shall be 48 hours after an accident.
It is true that most people purchase motor insurance just to satisfy the law and also not to have problems with the Police. The public who uses the road and vehicles should see more than just satisfying the law. It is always sad when people suffer in life because of road accidents because they were not well compensated. Everyone should be concern about motor insurance because we are all at risk. Our children use school buses, we use commercial vehicles and private vehicles to move to our destinations every day. We could be victims tomorrow. Let’s all be our brother’s keeper and make sure the right thing is done. Watch out for part two as we bring you more things you need to know about your motor insurance. Thank you!!
Ref:
http://insurance-for-secure.blogspot.com/2012/01/history-of-motor-insurance.html
http://www.carinsurance.org/guide/history/
