Question 1

Is motor insurance mandatory in Nepal?

Accepted Answer

Yes, third-party liability insurance is mandatory under Nepal's Motor Vehicles Act. Driving without valid insurance is a punishable offence with fines and vehicle impoundment.

Question 2

What is the difference between third-party and comprehensive motor insurance?

Accepted Answer

Third-party only covers damage you cause to others (people and property). Comprehensive covers both third-party liability AND damage to your own vehicle from accidents, theft, fire, and natural disasters.

Question 3

How does no-claim bonus (NCB) work for motor insurance?

Accepted Answer

You earn 20% discount for the first claim-free year, increasing to 25%, 30%, 40%, and 50% for consecutive claim-free years. NCB is transferable when you switch insurers.

Question 4

Does motor insurance cover flood and earthquake damage?

Accepted Answer

Comprehensive plans typically cover natural disaster damage including floods, earthquakes, and landslides. Third-party-only plans do not cover own vehicle damage from any cause.

Question 5

What should I do immediately after a vehicle accident?

Accepted Answer

File an FIR at the nearest police station, take photos of damage, notify your insurer within 24-48 hours, and don't authorize repairs until the surveyor inspects the vehicle.

Question 6

Is electric vehicle (EV) insurance different?

Accepted Answer

EV insurance follows similar principles but premiums are based on motor power (kW) instead of engine CC. Battery coverage and specialized EV component protection may require specific add-ons.

Motor & Vehicle Insurance in Nepal

Motor Insurance FAQs