Publication: Motor Third-Party Liability Insurance
Date
2010-09
ISSN
Published
2010-09
Author(s)
Gönülal, Serap
Abstract
Motor Third Party Liability Insurance
(MTPL) ensures that damage to third party health and
property caused by an accident for which driver and/or owner
of the car were responsible is covered. A policy may be
taken out by the owner of a vehicle or by a lawful possessor
authorized by the owner on behalf of the owner. Compulsory
MTPL Insurance is a financial protection system built to
prevent any grievance that third parties could face, due to
lack of solvency of first party who caused bodily injury or
property damage following any event related to a car
accident. Motor insurance is generally measured non-life
insurers' strongest class of business in terms of
premium volume. In most markets, it is characterized by high
competition and cyclical fluctuations in results. Non-life
insurers' motor result is thus likely to have a
particularly strong impact on the overall result. In most
countries, MTPL insurance is compulsory in order to protect
the public. World Bank studies in Africa, Central Asia, and
Europe have shown that motor insurance premiums represent at
least 30 percent of all non-life premium income. This
phenomenon may be explained by the rapid rise of motor
fleets. MTPL insurance has been introduced in the formerly
centrally planned economies only in the past decade, but it
is poorly understood. Motorists are inclined to view it as a
form of tax that they are at liberty to evade, rather than
as a protection against their personal liability a concept
that is not familiar to the general public. Motor insurance
has the potential to be a powerful tool in the promotion of
personal responsibility. If communicated effectively, the
link between the consequences of causing an accident and the
economics of paying for those consequences will of itself
gradually lead to improved driving.
Citation
“Gönülal, Serap. 2010. Motor Third-Party Liability Insurance. Primer Series on Insurance;Issue 16. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/27732 License: CC BY 3.0 IGO.”