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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

Caselet: Ms. Nair, a 34-year-old software professional, owns a car and a flat, and drives to work daily. Her car's insured declared value (IDV) is Rs 6 lakh. Her car is stolen and never recovered. Which statement about the claim under a standard comprehensive motor policy is correct?

In a total loss or theft under a comprehensive motor policy, the claim is generally settled on the insured declared value, which is the depreciated market value fixed at inception. Invoice-value payment needs a specific add-on, and third-party cover does not compensate own vehicle loss.

  1. ASettlement is generally based on the IDV, subject to policy termsCorrect
  2. BSettlement is based on the original purchase invoice price regardless of age
  3. CSettlement is paid only if a third party was injured
  4. DSettlement is limited to the third-party liability limit

Explanation

For total loss or theft, a comprehensive own-damage cover pays up to the IDV, which reflects market value after depreciation. Invoice price applies only with add-ons such as return-to-invoice. Third-party liability cover does not pay for own vehicle theft.

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