ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In India, as per the Motor Vehicles Act, it is mandatory that all vehicles that operate in any public space must have a motor vehicle insurance cover. Policyholders must have at least ‘third party liability’ motor insurance cover even when opting for the basic insurance plans.

Detailed explanation-2: -Liability Only Policy covers any legal liability you may face that occurs out of damage or loss to a third party only-including death, injury, and/or property damage in the event of an accident that involves your insured vehicle. This is following the stipulations laid out by the Motor Vehicles Act, 1988 .

Detailed explanation-3: -A legal liability cover for a paid driver implies that if you have hired a driver to drive your vehicle and he meets with an accident while driving it, then the insurance company will provide compensation for his injury/loss of life.

Detailed explanation-4: -Third-party liability insurance is a type of coverage that financially protects you if you’re considered responsible for damages or injury to another person or their property. This type of coverage is available for both home and car insurance.

Detailed explanation-5: -Liability limits are the maximum dollar amount of damages (“indemnity”) an insurance carrier will pay on your behalf. Limits are broken down into two categories: the per claim limit and the aggregate limit.