You must be aware that your motor insurance policy does not simply cover any loss or damage and that there are exceptions. Most of these exceptions are listed out in the policy wording, especially under the section titled ‘General Exceptions’ or ‘Exclusions’

The general exceptions in the Motor Insurance Policy are applicable to all sections of the policy. The one which is being discussed reads as follows:

“The company shall not be liable under this policy in respect of any accidental loss or damage and / or liability caused, sustained or incurred whilst the vehicle insured herein is being used otherwise than in accordance with the’ limitations as to use’.”

But what are these ‘limitations as to use’?

You could scour the policy wording in an attempt to find what this means, but there is no explanation/definition for the phrase ‘Limitations as to Use’. BUT, you will find a brief and unhelpful definition of the phrase ‘Limitations as to Use’ in the Policy Schedule.

That definition is as follows:

These ‘Limitations as to Use’ dictate that your car is insured for the use of vehicle for purposes other than those stated above. ‘Limitations as to Use’ are so vague and subjective that an insurance company could deny any claim on the basis of these.

Consider the following scenarios:

1. A saloon car has a seating capacity of five. Generally, in India, five people never sit in a car. 8 or 9 people would be more plausible. With 9 people in a saloon car, if there were to be an accident, would the insurer pay? It would not, because the car is being used beyond the stated ‘Limitations as to Use’.  
2. On a motorcycle, generally in India, 3 to 5 people sit and travel. If the vehicle were to meet with an accident resulting in total loss and death of all, would the insurance company pay? It would not because the motorbike is being used beyond the stated ‘Limitations as to Use’.
3. On a regular Road Transport Corporation (RTC) bus, people who are unable to find a seat will stand, or precariously hold on while standing on footboard or any other such place which would normally not be used for such purposes. A bus is typically intended to transport 50 people (for example). If the bus is transporting 100 people and were to have an accident, would the insurer pay? It would not because the vehicle is being used beyond the stated ‘Limitations as to Use’. (But, the government would usually step in, announce compensation to the families of the deceased. By doing so don’t you think the government is encouraging people to travel negligently while leaving every safety rule to the wind?)
4. If a saloon car in India which actually is intended to transport maximum 5 passengers including the driver were to transport goods, would the insurer pay? It would not because the vehicle is being used beyond the stated ‘Limitations as to Use’.

To conclude:  the phrase ‘Limitations as to Use’ is dangerous. We need to ensure that everything falls within these ‘Limitations as to Use’. Or else we have a problem.

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