General Insurance

What is General Insurance? All insurance excluding life insurance comes under general insurance. General Insurance is, broadly, insurance, which does not include any investment element, and covers risk of other natural, individual, political and economic risks. The general insurance products for individuals include health, home, travel, student, motor, accident and other business insurance. What are the benefits of buying general insurance policies? Buying general insurance policies are a provision in case of any uncertain loss that might come up during the normal course of activities. Hence an insurance cover rids you of the tension and the financial burden that you would suffer in case of a calamity. What is premium? How often do I have to pay Premium? Premium is the amount that the insurance companies charge to issue a cover for you, your family or the assets / liabilities that are covered under the policy. The insurance premium is a one-time premium, which is paid before the issuance of a policy. This premium is payable again in case of renewal of the policy. What is policy period? Policy period is the duration of the Policy, from the inception till the expiry of the policy. The policy will cover the uncertain losses occurring between the issue date and the expiry date of the policy. What are the different ways to buy general Insurance? Through an agent, broker or any other such intermediary. Anyone using the title broker is usually independent and generally aims to find you the best deal on the market. Other intermediaries might just quote the best deal from a fairly small panel of insurance companies or represent a single insurance company. You can approach the insurance company directly. If you approach the company directly, the chances of getting a better rate are very high. What is the difference between an Agent and a Broker? An agent is the representative of Insurance Company whereas a broker is the representative of the consumer or the policyholder. An agent could be a paid employee of the Insurance Company or could be an independent businessman. Is it necessary to buy insurance through an agent? You can buy many insurance products without help from an agent. Typically potential policyholders will be contacted by mail, or they can call a toll-free number to apply for a product. The advantage of this type of distribution system is that expenses are usually much lower because there are no agent commissions to be paid. These savings can be

passed onto the consumer through lower premiums. The main disadvantage is that the policyholder does not receive as much, or sometimes any, personal service either when buying a product or filing a claim. What services does a broker provide? In general an insurance broker would: Provide pre sales and after sales service to customers Provide relevant information to the underwriters for risk assessment and ascertain the premium Structure product and design covers that meet the specific requirements of customers Recommend risk improvement and loss minimization measures Provide a collection of Premiums Provide risk management and insurance education. What factors affect the cost of Insurance? The factors that can affect the cost of insurance include: The likelihood of a loss occurring The greater the probability a loss will occur the higher the rate. E.g. Floods Insurance in parts of North-east India. Purchase of a large amount of coverage (that is, if the item you are insuring is quite valuable) -- The chances are there could be a large claim and the premium will need to cover that possibility. What is Underwriting? Underwriting of a risk involves the consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so, at what rate of premium. What is Reinsurance? Insurance companies practice the fundamental principle of spreading their risk too. Further reinsuring the risks that the insurance company has insured does this. Who do you file your claim with? You file a claim with the insurance company that issued your policy. In case of policies received on account of your employment you may have to file claims through the HR administrator. How to file a claim? Most companies offer a call centre facility. Alternatively, you can: a) contact your agent b) write to your insurance company intimating the claim. There is usually a claim form that needs to be filled. This can be: a) downloaded from the insurance companys website. b) be obtained by visiting the insurance companys office. c) provided to you by your agent.

What are the things to be taken care of while filing a claim? Be thorough and exact when reporting damage and always tell the truth. Withholding vital information or exaggerating the facts can, not only lessen your chances of the claim being settled to your satisfaction, but also may be considered a crime. (Insurance fraud costs consumers crores of rupees a year. What happens after a claim has been filed? Once your claim has been filed, the insurance company will assign a surveyor. He or she is charged with investigating your claim and then making a recommendation to the insurance company. The recommendation can be to accept the claim and pay the full amount requested, accept part of the claim and make partial payment, or refuse the claim and make no payment. The insurance company will then make a decision regarding your claim and notify you of its final decision. The amount of compensation offered can vary according to the surveyors analysis. What impact does a deductible have while settling a claim? If you have no deductible, the company will pay 100% on a covered loss. To understand how a deductible works, consider the following: If the deductible on your motor insurance is Rs. 1000 it means you agree to pay this amount first, and your insurance company will pay for damages exceeding this deductible. By increasing your deductible from Rs. 1000 to Rs. 2500 or even Rs. 3500 this decreases the insurance companys risk. This could mean a savings in your premium. Who keeps an eye on the Insurance companies? Insurance is a heavily regulated industry. The Insurance Regulatory and Development Authority controls insurance regulations in India. In addition to approving rates, the regulatory body is involved in all insurance matters on behalf of private citizens and businesses. It issues operating licenses to insurers and agents, based on among other things: a) ability to meet the requirements for conduct b) knowledge about insurance issues. Is Motor Insurance compulsory? Yes. Under the Motor Vehicles Act , all motor vehicle owners must have insurance cover. The type of insurance you take, however, may vary. What are the different types of Insurance Cover available? On the basis of the risks covered, Motor Insurance is divided into two basic types: Third Party Insurance Comprehensive Insurance What exactly does Third Party Insurance cover? Third Party Insurance cover for Personal Injury includes:

Liability for death or injuries to third parties - this means that you are insured against death or injury (caused by your vehicle) to pedestrians, occupants of other vehicles , and outsiders other than passengers, for unlimited amounts. Passengers of private vehicles and pillion riders are also deemed covered. Liability to employees connected with operation of the vehicle- this means you are insured against death or injury (caused by your vehicle) to the vehicle's drivers, cleaners, conductors, coolies, employees used in the operation of the vehicle. Liability to passengers carried in the vehicle for hire or reward - this means that as owner of a taxi, bus or auto-rickshaw, you are insured against death or injury (caused by your vehicle) to the passengers. What is Comprehensive Insurance Cover? This type of Insurance covers all the risks covered in the Motor Vehicles Act (as above) , plus loss or damage caused to the vehicle due to: Accident Fire, Explosion, self-ignition, lightning Burglary, house-breaking, theft Riots & strikes Earthquakes Flood, typhoon, hurricane, storm, cyclones Malicious acts Terrorism Transit by rail/road. air, waterways Also included is the towing charge (up to Rs.1,500/- for private vehicles and Rs.2,500/for commercial vehicles ) incurred due to accident to the vehicle. Are there any exclusions to this Comprehensive Insurance Cover? Yes. There are certain exclusions. This insurance does not cover loss or damage caused due to : Driver being under intoxication Vehicle being driven by a person not holding an effective, valid license. It also does not cover: Damage to tyres (unless the vehicle is also damaged). Wear & tear, mechanical breakdown. How is the premium calculated in the case of Comprehensive Insurance Cover? In the case of Comprehensive Insurance Cover, for the purpose of premium, vehicles are categorised as follows: PRIVATE CAR: This is used for personal purposes. The premium is computed on the following basis: Geographical area of use cubic capacity Value of the vehicle. Accessories are to be specified separately under electrical and non-electrical items. TWO-WHEELER: This is used for personal purposes only. Premium is calculated on cubic capacity and value of vehicle. Accessories are to be specified. Theft of accessories is not covered, unless the vehicle is stolen at the same time. COMMERCIAL VEHICLE: This is a vehicle used for hire and is classified into: Goodscarrying commercial vehicle: In this case premium is calculated on carrying capacity -gross vehicle weight and value of the vehicle. Accessories extra, as specified. Passengercarrying commercial vehicle: In this case premium is calculated on carrying capacity of the vehicle -Number of passengers and value of the vehicle. Accessories extra, as specified. Note: all commercial vehicles are subject to a compulsory excess in each and every claim for damage.

Is it possible to get additional benefits by paying additional premium? Yes. On payment of additional premium you can get additional benefits, such as: Wider cover on liability to rivers, cleaners, conductors, i.e. under Fatal Accidents Act, W.C. Act & Common Law P. Benefits to owner of vehicle, other family members on named or unnamed basis driving or traveling in the vehicle. P. Benefits to others traveling in the vehicle. Increased property damage cover: (This extension will not cover goods carried on the vehicle). What is " NO CLAIM BONUS"? No claim bonus is a special discount given for every claim-free year. Loading (Malus) is applied during the subsequent year of claims made. I hold comprehensive car insurance. In case of transport of the car by train or truck, should I take a marine policy to cover the transportation risks? A comprehensive car policy covers transportation risk by rail, road and inland waterways. There is a waiting period of 30 days for Hospitalization Insurance. If so, am I getting only 11 months of effective cover for 12 months premium? This waiting period will not apply for renewal policies, accidental claims and diseases which would have been contacted with in 30 days and which were not in the knowledge of the Insured. Can I include my newly born son into my existing mediclaim insurance ? Yes. you can include your son once he completes three months. My monthly salary is Rs 10,000/-.How much capital sum insured I will be offered under personal accident insurance? Approximately Rs 6,00,000 i.e. 60 times the monthly income . Can I insure my rented apartment for fire insurance? You cannot insure your rented apartments as you do not have insurable interest in it.