ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Third-party insurance, which is also sometimes referred to as ‘act-only’ insurance is a statutory requirement for all vehicle owners as per the Motor Vehicle Act. It is a type of insurance cover where the insurer offers protection against damage to the third-party vehicle, personal property and physical injury.

Detailed explanation-2: -Premium-The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Detailed explanation-3: -Insurance contracts are unilateral, meaning that only the insurer makes legally enforceable promises in the contract. The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions.

Detailed explanation-4: -The insurance company is responsible for paying the total compensation awarded by the Tribunal. The owner and the Insurance Company have an absolute duty to pay the compensation under Section 149(1) of the Motor Vehicles Act, 1988.