Private vehicle insurance policy

The insurer shall provide compensation to the insured for loss/damage to the private vehicle mentioned in the schedule of this insurance policy, hereinafter referred to as the “vehicle,” or to any parts or accessories attached to it, caused by any of the following:

(a)Fire, lightning, explosion or self-ignition of the vehicle or parts attached to it;

(b)Earthquake;

(c)Flood/inundation;

(d)Landslide/landslide collapse;

(e)Storm, hail, snow or frost;

(f)Accidental or accident-related causes, or mechanical or electrical failure/malfunction/breakdown resulting in an accident to the vehicle;

(g)Theft, burglary or housebreaking;

(h)While being loaded onto or unloaded from a road, railway, inland waterway, lift or elevator.

Where, due to any of the causes mentioned in Clause 1, the parts of the vehicle are required to be replaced, depreciation shall be deducted as follows:

(a)All types of rubber, lights, batteries, tires and tubes

50%

(b)Parts made of fiber glass

30%

(c)Materials made of glass and air bags (including sensors)

0%

Where, due to any cause mentioned in Clause 1, loss/damage occurs and parts of the vehicle other than those mentioned in Clause 2 have to be replaced, depreciation shall be deducted according to the following rates, calculated from the date of registration in Nepal:

When compensation is provided for partial loss/damage to the vehicle arising from any cause mentioned in Clause 1, the depreciation specified in Clause 2 or 3 and the total of the mandatory excess and voluntary excess specified in the schedule of this insurance policy shall be deducted, and the insurer shall pay the remaining amount.

Notwithstanding anything stated in Clauses 1, 2 and 3, the insurer shall not make payment in the following circumstances:

(a)Depreciation resulting from use of the vehicle, mechanical or electrical failure/malfunction/breakdown;

(b)Damage to tires/tubes where no vehicle accident has occurred;

(c)Loss/damage caused because the driver consumed alcohol or narcotic substances;

(d)Loss/damage occurring after 35 days from the date on which the insured's interest in the vehicle has changed or ended.

35 days

If the vehicle becomes immobile due to any cause mentioned in Clause 1, the insurer shall bear the necessary and actual expenses required to take the vehicle to a safe place or to the nearest repair location.

Up to 100 km

Rs. 10,000

More than 100 km

Rs. 15,000

In respect of loss for which the insurer may be liable under this insurance policy, the insured may have the vehicle repaired after fulfilling the following conditions:

(a)The estimated cost of such repair shall not exceed Rs. 5,000;

Rs. 5,000

(b)Detailed particulars of the repair expenses shall be immediately made available to the insurer;

(c)The insured shall provide the insurer with the necessary evidence and assistance to establish that such repair was necessary and that the expenses incurred for it were reasonable.

The sum insured of the vehicle shall be determined as follows:

(a)At the beginning of each insurance period, the value declared by the insured shall be considered the sum insured of the vehicle for that insurance period.

(b)When determining the declared value mentioned in Clause (a), where the vehicle distributor or manufacturer provides a price list, depreciation shall be deducted from the price list of the vehicle and the parts attached to it, according to the following rates, and the declared value shall be determined:

(c)If the distributor or manufacturer of the vehicle has stopped providing a price list, the declared value mentioned in Clause (a) shall be determined by mutual agreement between the insured and the insurer at the beginning of each insurance period.

(d)For one insurance period, the declared value determined under Clause (b) or (c) at the beginning of that period shall be considered the market value of the vehicle, and no additional depreciation shall be deducted from it in a claim for Total Loss or Constructive Total Loss occurring during that period.

(e)If the cost required to repair a vehicle damaged due to any cause mentioned in Clause 1 exceeds 75% of the declared value, the vehicle shall be considered to have suffered Constructive Total Loss.

The insurer shall pay compensation for a vehicle that has suffered Total Loss or Constructive Total Loss due to any cause mentioned in Clause 1.

No mandatory excess or voluntary excess shall be deducted when making such payment.

The value of the salvage shall be determined on the basis of the surveyor's recommendation and with the written consent of the insurer and insured.

Subject to the maximum liability limit mentioned in the insurance policy, the insurer shall pay expenses arising from liability that may be incurred by the insured as a result of an accident caused by the vehicle or its use, in the following circumstances:

(a)In the event of death, bodily injury, disability or physical injury to a third party.

(b)In the event of loss/damage to the property of a third party, other than property being transported in the insured vehicle, owned by the insured, entrusted to the insured in confidence, or under the custody or control of the insured.

The insurer shall pay all expenses for which it has given written approval.

Subject to the liability limits and conditions under this Chapter, the insurer shall also provide compensation for the liability of the driver driving the vehicle with the insured's ordinary knowledge or consent, provided that:

(a)The driver is not entitled to compensation under any other insurance policy.

(b)The driver has acted in accordance with the meaning, exclusions and conditions applicable under this insurance policy, to the extent applicable to the insured.

If the insurer considers it necessary, it may appoint representatives to investigate or inquire into any death, disability, physical injury or property damage for which a claim may arise under this Chapter. It may also conduct proceedings in court for the defense of any action arising from or connected with any act or proceeding that may give rise to a claim under this Chapter.

In relation to death, disability or physical injury suffered by a third party in respect of which a claim may arise under this Chapter, the insured shall bear such liability, within the limits and conditions specified in this insurance policy. Where such liability is required to be paid to the injured person, or, in the event of death, to the nearest heir of the deceased, the insurer shall make such payment. The recipient of such payment shall comply with the conditions of this insurance policy in the same manner as the insured.

No provision or restriction of this insurance policy shall adversely affect the right of any person to receive compensation under the prevailing law relating to vehicles and transportation.

(a)Where a vehicle accident occurs, the insurer shall pay compensation as follows: In case of injury or disability: Where a third party suffers physical injury, disability or medical treatment expenses, the insurer shall, on the basis of the medical report and certification by the authorized body or officer, pay compensation per person as follows:

If more than one of the injuries mentioned above occurs, the insurer's liability shall not exceed Rs. 500,000, and for each injury the amount shall be equal to the proportion of the amount determined for the respective injury.

Rs. 500,000

(b)If a third party is injured as a result of a vehicle accident and is admitted to a hospital for treatment, upon certification of such hospitalization, the insurer shall pay kurwa expenses at the rate of Rs. 500 per day, for a maximum of 45 days, within the limit of medical treatment expenses.

Rs. 500 per day; maximum 45 days

(c)If it is necessary to take the injured person from the accident site or from the initial treatment hospital to another hospital, Rs. 10,000 or the actual expense, whichever is less, shall be paid for the relevant ambulance expenses, and such expense shall remain within the limit of medical treatment expenses.

Rs. 10,000 or actual expense, whichever is less

(d)Whether or not the vehicle was at fault, if a third party dies as a result of an accident directly involving the vehicle, the insurer shall immediately pay Rs. 50,000 per deceased person as funeral expenses, within the overall liability limit of Rs. 500,000 per deceased person.

Rs. 50,000 per deceased person; overall liability limit Rs. 500,000 per deceased person

(e)Where the fact that a third party died as a result of a vehicle accident is certified by an authorized body or officer according to law, the insurer shall pay a total of Rs. 500,000 per deceased person, including funeral expenses.

Rs. 500,000 per deceased person

ExplanationWhere the insured has paid an additional insurance premium to increase the insurance amount of the driver and passenger, and has requested the insurer to issue the policy after increasing the insurance amount, the insurer shall pay the claim on the basis of the insurance amount mentioned in that same insurance policy.

In the event of the following circumstances arising from a vehicle accident, the maximum compensation limit per accident shall be as follows:

1Private vehicle

Rs. 8,000,000 bodily injury; Rs. 8,000,000 property damage

If third-party property is damaged due to a vehicle accident, the insurer shall pay compensation subject to the conditions of the insurance policy. No depreciation shall be deducted while making such payment.

No depreciation

Where, in relation to an accident in which more than one person or property has suffered loss/damage, the compensation exceeds the liability limit specified in Clause 8, the insurer shall pay compensation according to the priority determined by the insured, subject to the liability limit specified in Clause 8 and the conditions and endorsements of this insurance policy.

Other exclusions, conditions and limits mentioned in the insurance policy shall remain as they are.

Under this insurance policy, if no insurance claim has been made, the insurer shall, at the time of renewal of the insurance policy, provide the following discount on the renewal premium, except for insurance relating to the risk group and personal accident:

If no claim has been made, the discount shall be as specified in Schedule–20.

Schedule–20

Where no claim has been made, the discount shall not become effective as a lump sum. Without counting the year in which a claim was made, when renewing the insurance policy after the year in which no previous claim was made, the period without a claim shall be maintained for the purpose of granting the no-claim discount. The discount shall continue from the renewal period following the period after the year in which the claim was made. However, where Total Loss or Constructive Total Loss has occurred and the claim has been paid, the insured shall not receive the above-mentioned discount.

Such discount shall not be based on the insurance policy but shall be based on the discount received for having made no claim under the original insured's claim. If the insurable interest of one insured mentioned in the insurance policy is transferred to another insured, such discount shall begin from the period in which the insurable interest of the new insured begins.

If, within 365 days from the date on which ownership of the vehicle was changed from the previous insured, the purchaser purchases and insures a vehicle of the same classification and declares that no accident has occurred, the discount for no claim shall be provided under the old insurance policy (issued by a domestic or foreign insurer), up to the maximum limit specified in this Directive, until the old policy is presented.

Within 365 days

If a new insured renews the insurance policy within 365 days from the date on which the insurable interest was transferred, the discount shall be provided according to Sub-clause (3).

Within 365 days

If the insured transfers the insurance of his/her vehicle from one insurer to another insurer, the new insurer shall provide the insured with the discount received from the previous insurer at the applicable rate.

For a new insurance policy, if the insured wishes to obtain the discount for no claim made under the old insurance policy (domestic or foreign), the insured shall submit, for renewal, the notice issued by the previous insurer stating the applicable discount percentage for no claim. All insurers shall compulsorily provide the insured with a renewal notice or certificate clearly stating the percentage of discount applicable for no claim.

If an insurance policy for a vehicle whose insurance period has expired is renewed within 35 days from the date on which renewal should have been made, the insured shall receive the no-claim discount. The discount rate applicable to the new insurance policy shall be based on the discount earned under the insurance policy for the preceding full year.

Within 35 days

If an insured entitled to receive a no-claim discount renews the insurance policy for a short period, or, after renewing the insurance policy for twelve months, requests cancellation of that same insurance policy during the period, the no-claim discount to be provided shall be calculated proportionately.

Except where otherwise provided in this Directive, the insurance shall be uninterrupted only where the discount is to be provided.

Where ownership of a vehicle is transferred by an organization into the name of an employee, such employee shall also be entitled to receive the no-claim discount. However, the vehicle must have been insured with evidence of an agreement between the organization and such employee that the vehicle shall be used only by that employee.

Where, after the death of the insured, the vehicle is transferred into the name of the insured's legal heir, such heir shall also receive the no-claim discount.

Even if different vehicles are covered under the same insurance policy in the insurance policy schedule, each vehicle shall be considered as having been separately insured for the purpose of receiving the no-claim discount.

The no-claim discount shall apply only to a comprehensive insurance policy.

The insurer shall not be liable under this insurance policy in the following circumstances:

(a)Any accident, loss/damage or liability occurring or taking place outside the geographical area specified in the schedule of this insurance policy.

(b)Any claim arising under any other contract.

(c)Except in the case of theft of the vehicle, any accident, loss/damage or liability occurring or arising while the vehicle is being driven by a person other than the driver specified in the schedule of this insurance policy.

(d)Any loss/damage occurring directly or indirectly from contact with radioactivity arising from radioactive materials remaining after the combustion of nuclear fuel, including the combustion of self-sustaining nuclear fission.

(e)Any accident, loss/damage or liability arising from or caused directly or indirectly by nuclear weapons, or from any cause directly or indirectly connected with nuclear weapons.

(f)Any accident, loss/damage or liability arising directly or indirectly, closely or remotely, or symbolically, from the consequences of volcanic eruption, foreign enemy action, hostile acts or war-like acts (whether war has been declared or not), civil war, military rebellion, military insurrection, military rule, or the events mentioned above.

The insurer shall not be liable for Consequential Loss arising as a consequence of a vehicle accident covered by this insurance policy.

Unless the insured has paid the additional insurance premium specified for such purpose, the insurer shall not bear any accident, loss/damage or liability arising from or caused by strike, riot, malicious acts, and terrorist/destructive acts, as an extension of this insurance policy.

Words or phrases having a special meaning when used in any part of this insurance policy shall have that meaning wherever they are used in this insurance policy.

If any accident or loss/damage occurs that may give rise to a claim under this insurance policy, notice thereof shall be given to the insurer in writing without delay. The insured shall provide the insurer with all information and assistance necessary regarding such accident. Any letters, claims, notices, summons, warrants, or information relating to proceedings received by the insured shall immediately be forwarded to the insurer. If the insured receives any information regarding any lawsuit, investigation, or inquiry into an injury/fatal injury in respect of which a claim may arise under this insurance policy, the insured shall immediately notify the insurer in writing. If the insured receives information regarding any theft or other criminal offense in respect of which a claim may arise under this insurance policy, the insured shall immediately notify both the insurer and the police and shall assist in tracing the offender.

No person may, without obtaining the insurer's written consent, make any proposal, give any promise, make any payment, or grant any discount in relation to a claim under this insurance policy on behalf of the insured or any other person. If the insurer wishes to make a claim payment on behalf of the insured, settle a dispute, conduct a defense, take legal proceedings, or conduct negotiations, the insurer shall have full independence in doing so, and the insured shall provide all information and assistance required by the insurer in this regard.

The insurer may, according to its discretion, repair or replace the vehicle or any parts attached to it, or pay cash equal to the amount of the loss/damage.

The insured shall take all reasonable measures to protect the vehicle from loss/damage and to maintain it in proper condition. The insurer shall always have the right to inspect the vehicle, any of its parts, the driver, or any workman of the insured. Where the vehicle has been involved in an accident or has suffered loss/damage, the insured shall take the necessary and appropriate care and safety measures to prevent further loss/damage. If the vehicle involved in an accident is driven without carrying out the necessary repairs, the insured shall itself be responsible for any additional damage caused to the vehicle as a result.

The insurer may cancel this insurance policy by giving seven (7) days' notice by registered post to the insured at the insured's last address. In such circumstances, the insurer shall refund to the insured the premium corresponding proportionately to the remaining period from the date of cancellation of the insurance policy.

Seven (7) days

The insurance policy may be cancelled at any time at the request of the insured. In such circumstances, after deducting the premium amount applicable at the short-period rate specified below for the period for which the insurance policy remained in force, the insurer shall refund the remaining premium:

However, for the purpose of refunding the premium, there must have been no claim during the entire period for which the insurance policy remained in force.

Where the insured receives claim payment for the loss/damage/liability covered by this insurance policy from any other existing insurance, the insurer shall not be required to pay compensation or other expenses exceeding the proportionate amount based on the sum insured.

Where loss/damage occurs to the vehicle and it is found that the insured or any other person has also insured the same vehicle with another insurer, the insurer shall not pay more than the proportionate compensation payable on the basis of the sum insured for that vehicle.

The insurance policy shall expire at 12 midnight local time on the date specified in the schedule as the date on which the insurance period ends.

12 midnight local time

The date and time from which risk-bearing under this insurance policy begins shall be as specified in the schedule of the insurance policy.

If the insured provides false particulars regarding the vehicle, or conceals necessary facts required for assessing the risk, or states false particulars, or if any material fact is omitted while stating the facts, or if the insured fails to comply with any condition of this insurance policy, the insurer shall not be liable to pay any claim under this insurance policy.

If ownership of the vehicle changes and the new owner does not insure the vehicle against the relevant risk within 35 days from the date of change of ownership, this insurance policy shall automatically become ineffective. However, even if the insurance policy becomes ineffective due to a change in ownership, insurance protection for liability toward passengers, the driver and third parties shall be considered to remain in force for the remaining insurance period, and the insurer shall pay claims accordingly.

Within 35 days

If the insured gives written notice to the insurer within 35 days from the date of sale of the vehicle, the insurer may transfer this insurance policy into the name of the new owner of the vehicle as follows:

Within 35 days

(a)For transfer of the insurance policy, the new owner of the vehicle shall immediately complete the insurance proposal form, and the insurer may issue an endorsement and transfer the insurance policy.

(b)If the insured has received a no-claim discount, the new owner of the vehicle shall not receive that discount.

(c)Notwithstanding anything written in Clauses (a) and (b), where ownership is automatically transferred to an heir according to prevailing law, this insurance policy shall be considered automatically transferred.

Payment of premium shall not be considered to have been made until a receipt bearing the proper stamp/signature of the insurer has been issued.

If the insured or a person authorized by the insured fails to follow the required procedure or obstructs the exercise of any right under this insurance policy, the insured shall be deprived of all benefits under this insurance policy.

If any claim is fraudulent, or if, in the course of a claim, the insured or any person authorized to act on behalf of the insured gives a false statement, or attempts to obtain any improper benefit under this insurance policy, or if any loss/damage occurs intentionally through collusion between the insured and another insured or any other person, the insured shall be deprived of all benefits under this insurance policy.

If, within three months after a claim for loss/damage under this insurance policy has been rejected by the insurer, no complaint or grievance is filed, or if, after the Insurance Committee makes a decision in favor of the insurer pursuant to the Insurance Act, 2049, no appeal is filed before the court within the period prescribed by prevailing law, the insured shall be deprived of all benefits under this insurance policy.

Three months

If the insured receives compensation for loss/damage under this insurance policy and has the right to receive compensation for the same loss/damage from another party, the insured shall assign that right to the insurer. Before or after receiving compensation from the insurer, whenever the insurer considers it reasonable and necessary, the insured shall, at the insurer's expense, carry out or permit the insurer to carry out the necessary action.

Except where a claim is pending or suspended, the insurer shall not be liable for any loss/damage occurring more than three months after the date on which the loss/damage occurred.

Three months

All notices and other correspondence, whether written or printed, given to the insurer under the conditions of this insurance policy shall be submitted in accordance with the conditions of this insurance policy.

The insured shall be responsible for collecting the necessary evidence to establish any claim made under this insurance policy.

If any dispute arises regarding an insurance claim under this insurance policy, it shall be resolved in accordance with the Insurance Act, 2049.