Coverage: It provides the policyholder protection against 'Legal Liability arising from an accident involving the Insured Vehicle for
(1) Bodily Injuries to 'Third Party' (2) Damage to property of a Third Party (3) Bodily injuries to Passengers travelling in Public Service Vehicles. Personal Accident Cover for Owners who also drive their vehicles is mandatorily provided for specified amounts. The limit of cover for Legal Liability is defined. For bodily injury, the policy offers unlimited liability irrespective of the type of vehicle. Liability for damage to property of third parties is limited to (1) Rs. 1.00 lac for Two-wheelers (2) Rs. 7.50 lac for Private Cars (3) Rs. 7.50 lac for all Commercial Vehicles. Duration: The policy must compulsorily be issued for an Annual period, and cannot be issued for a shorter period.
The 'Own Damage' policy is the one which customers mostly buy.
Coverage: In addition to the Legal Liabilities insured under the 'Liability Only' policy, it offers compensation for damage to the Motor Vehicle by a very wide range of eventualities, or 'perils, such as (1) Accidental External Means, e.g. collisions (2) Burglary and Theft (3) Malicious Act (4) Fire, lightening, explosion, self-ignition (5) Flood, Storm and allied perils (6) Earthquake (7) Landslide (8) Riots and Strikes (9) Terrorist Activity (10) While in transit by Rail, Road, Air or Inland waterway, or elevator.
Exclusions: Compensation under the policy is not payable if the vehicle is driven by (1) Unlicenced Driver (2) Driver who is under the influence of alcohol or drugs, or the loss is due to (3) Electrical of Mechanical Breakdown (4) Wear and Tear (5) War (6) Nuclear perils (7) Contractual Liability.
Additional Coverage: Option is available to cover (1) Accessories (2) Electrical and Electronic additionally fitted to the vehicle (3) Wider Legal Liability for Drivers and Workmen (4) Personal Accident for Passengers. Many Insurance Companies also offer an option called 'Nil Depreciation' to remove deduction for depreciation from claims for partial losses or ‘repair' claims.
Sum Insured: The value for which the vehicle should be insured, the Sum Insured, is called the Insured's Declared Value (IDV). For vehicles up to five years old the IDV is calculated by deducting depreciation on a fixed scale from the cost of a new vehicle of similar make and model. For vehicles more than five years old or for obsolete models, the IDV is a value determined by mutual consent between Insurer and policyholder. The IDV once recorded in the policy remains fixed for its entire duration.
Claims Compensation: In case of theft of the vehicle or its total loss, the Insured is compensated with payment of the full amount of IDV. For partial losses, or ʻrepair' claims the Insured receives the cost of parts and labour after deduction for depreciation based on a fixed schedule of rates which is mentioned in the policy. From the Amount of Compensation calculated a fixed amount termed 'Excess' or 'Compulsory Deductible' is deducted before the net amount is paid as claim.
Additional Features: The policy offers a 'No Claim' Discount if the vehicle has an accident free history and no claims have been made on the previous policies. The Insured can also avail of the option to have a 'Voluntary Deductible' imposed in addition to the Compulsory deductible on claims and thus receive a further discount in premium payable.
Health Insurance Hospitalization Insurance
Health Insurance is of two types (1) Hospitalization Insurance and (2) Critical illness Insurance.
Hospitalization Insurance was started about three decades ago, in 1986, as a policy for individuals with the name 'Mediclaim,' which has now become the generic name for this type of policy.
Coverage: It offers compensation for costs of (1) 'Hospitalization' (2) Domestic Hospitalization where treatment in a hospital is not possible (3) ‘Day Care' treatment for specified procedures, taking less than a day, that have to performed under supervision at a medical facility (4) Pre and Post Hospitalization treatment. Any treatment falling under one of these four classifications is covered.
Exclusions: The policy specifically excludes some conditions and diseases, most significant of which (1) Pre-existing disease (2) AIDS (3) Naturopathy Treatment (4) Dental Treatment, unless requiring hospitalization (5) Plastic Surgery unless required as result of are a some accident or illness (6) Specified Diseases during the first year of Insurance, with some Insurers varying this period of restriction, also called
'Waiting Period, from a duration of 1 month, 3 months, or even over a year. Eligibility Criteria and Sum Insured: The policy can be taken by, or for, (1) Individuals (2) Families (3) Groups. Different Insurance Companies have place varying restriction for the Minimum and Maximum age for taking the policy, but generally allow coverage to extend beyond such maximum age, or allow even new born children to be insured along with parents. The ‘Group' Policy can be purchased by Employers for their employees or recognized Organization for their members, and for these the terms and conditions are suitably customized by Insurers to accommodate wider requirements.
The choice for Sum Insured per individual varies from Rs.15,000/- to Rs. 5,00,000/- and more, with some Insurers even offering coverage up to Rs. 1,00,00,000/-. The premium payable depends upon the age of the Insured person and the Sum Insured. Claim Payment: The usual mode of
claim payment is reimbursement of
Bills after the treatment has been Critical illness Insurance completed. However, most Insurers also extend 'Cashless' settlement, at least up to a defined limit. Under this mode, if treatment is taken a 'network' facility, that is, a hospital with which the Insurer has a contractual arrangement, then the Insurer offers to settle the Bill directly with the hospital without the insured having to first pay them and then claim reimbursement.
The Critical Illness policy offers compensation if the Insured person is diagnosed to be suffering from any one of the major diseases listed as 'Critical Illnesses' by it. Most policies cover between ten to twenty critical illnesses, a sample of which are (1) Cancer (2) Transplant of Major Organ or Bone Marrow (3) Multiple Sclerosis (4) Third degree Burns (5) Aorta graft surgery (6) Open Heart Replacement or Repair of Valves (7) Coma (8) Quadriplegia (9) Total Blindness (10) Kidney Failure.
The policy is sold to individuals, and is not sold to groups. Different Insurance companies have varying restrictions for minimum and maximum age for 'entry,' or original purchase of insurance, but once purchased, a policy can be renewed during the entire lifetime of a policyholder.
The compensation is paid out as a lump sum' if the Insured person lives beyond the “Survival period” mentioned in the policy. Usually the survival period is around 30 days from the date of first diagnosis or treatment, but can stretch up to sixty days under some policy variants. The compensation is meant to be payment of a 'benefit' and not a 'reimbursement of actual expenses incurred.
Exclusions under the policy are made for (1) Pre-existing illnesses (2) Critical Illnesses contracted or evidenced within three months of policy inception (3) Illnesses resulting from use of alcohol, smoking, tobacco or drug abuse (4) Treatment for a Congenital disease, and others that are specifically listed.
The Critical Illness policy can be purchased as a 'stand alone product, but is positioned as a buffer to the Hospitalization insurance policy.
Personal Accident Insurance
The Personal Accident Insurance policy can be purchased for individuals and also for groups. It covers persons between the age of five years to seventy years, providing structured compensation against Death, Permanent Total Disablement (PTD) or specified degrees of Permanent Disablement arising from an accident. An option to cover Temporary Total Disablement (TTD) is also available.
The policy can be purchased for any value, but Insurers like to link Sum Insured to a person's earnings from gainful employment. Usually cover is granted for seventy to hundred times of a person's monthly earnings. The premium depends on the type of cover chosen and the classification of Insured's occupation as more or less hazardous.
The Compensation offered is (1) 100% of Sum Insured for Death (2) 100% of SI for Permanent Total Disablement, or loss of any 2 limbs, hands or legs (3) 50% of SI for Permanent Partial Disablement (PPD), or loss of any one limb (4) between 1% to 50% of si for specified permanent disablements (5) 1% of SI per week for Temporary Total Disablement. Along with Temporary Total Disablement, Medical expenses for a limited amount can also be covered. The policy only excludes events related to pregnancy, war, nuclear hazards, actions under the influence of intoxicants, and criminal acts.
The PA policy is an uncomplicated insurance product that offers compensation in the form of a benefit that is payable once the contingency has occurred, and is not an indemnity or reimbursement of actual expenses.
Travel Insurance
Travel insurance originated with the objective of providing assistance and compensation to Indian citizens travelling out of India to foreign countries for perils and losses they may face while abroad. The product, designed and marketed by the four PSU Insurers, covered specified contingencies
1. Medical Exigencies (a) Hospitalization due to sickness or accident (b) emergency dental treatment (c) evacuation to the nearest medical facility, or if required (d) Evacuation to medical facility in India (e) Repatriation of mortal remains to India, in the event of death 2. Personal Accident resulting in (a) Death (b) (b) Permanent total Disablement (c) Loss of two eyes, or any two limbs, or one eye and one limb
3. Loss of Checked-In Baggage
4. Delay of Checked-In Baggage beyond twelve hours
5. Loss of Passport, leading to costs for issue of a duplicate Passport or Emergency Travel Documents
6. Personal Liability incurred towards Third Parties for personal injuries and property damage
The payment of compensation, with full decision making authority, under the policy was delegated to Authorized Agents who were located abroad and positioned to ensure on-location delivery of service.
The most attractive component of this policy was the coverage of medical contingencies. Indeed, the policy was named 'Overseas Medical Policy' or 'OMP. To this basic configuration Private Sector Insurers have added some new features and a few tweaks to create a differentiated product. Some of the additional features are more like an amplification or extension of the original features, while others are a new dimension to the risks now faced by travelers. We may now look at some of these features.
The ’Daily Hospitalization Allowance compensates for small expenses that are incurred during a person's hospitalization but not included in formal Bill for Hospital expenses. .'Compassionate Visit benefit covers the to-fro ticket of one person from Insured's family who may have to visit him during emergency hospitalization and convalescence.
• The 'Financial Emergency Allowance provides immediate cash liquidity to a person whose wallet is stolen, and who now does not have cash and, or, credit cards.
• The “Trip Delay and 'Trip Cancellation' features provide for the extra expenses incurred for alternative accommodation and onward travel arrangements.
. The 'Missed Connection' benefit provides for compensation of similar expenses.
· The Home Burglary Insurance' benefit covers the Furniture, Fixture, Fittings and personal effects of the policyholder at his home in India against Burglary and
Theft during the period of his visit abroad.
Many Insurers have also developed special variants of the Travel policy for special segments such as Students travelling abroad for higher studies, or Company employees and Businessmen going abroad in connection with their employment or business.
Thus while for the leisure traveler there is a product which covers a single visit, for business travelers there is also a ‘Multi-Trip' policy.
Package Policies
The 'Homeowner's Package Policy and the 'Shopkeeper's Package Policy' were designed by the PSU Insurers to provide customers with a single product that offered multiple options covering all their possible requirements for insurance cover. Prior to this, a person wishing to ensure comprehensive protection for their assets had to go through repetitive and often tedious paperwork and obtain at least three or even five or six insurance policies. The Package policies changed that and made it possible to select desired options and take one single policy for all requirements. These two policies have provided a template which has been used by the Private Sector players to create variants like an 'Office Package policy or an 'Industry' Package policy. However, essentially the idea and design remains the same. We shall therefore confine ourselves to discussing these two policies.
The 'Homeowner's Package Policy' and the 'Shopkeeper's Package Policy,' both, consist of ten or more 'sections. Each Section offers cover against a particular group of perils. The configuration of cover under each section is fixed, and the perils covered and excluded, are not open to change by addition or deletion. However, the coverage is extensive, and would usually have been available only under a full-fledged ‘stand alone policy. The first section of both policies covers 'Fire' and other perils from the fire group such as Riot and Strike, Malicious Damage, Flood Storm losses, Earthquake damage, Terrorism damage, and this section is 'compulsory' or 'mandatory.' The buyer can select a minimum of two out of the other sections.
The Sections of the Homeowner's Package Policy are (1) Fire, and allied perils (2) Burglary, Housebreaking and
Theft (3) All Risks for Jewellery and Valuables (4) Plate Glass (5) Breakdown of Domestic Appliances (6) TV Set (7) Pedal Cycles (8) Baggage insurance (9) Personal Accident and (10) Public Liability.
The Sections under the Shopkeepers Policy are (1) Fire, and allied perils for Building and Contents (2) Burglary and Housebreaking (3) Money Insurance (4) Pedal Cycles (5) Plate Glass (6) Neon Sign or Glow Sign (7) Baggage insurance (8) Personal Accident (9) Fidelity Guarantee (10) Public Liability and (11) Loss of Profits.
The two policies are designed to offer options for the different requirements of a Homeowner and a Shopkeeper, but the similarities in concept and design are evident. The various Sections represent individual products most of which we are either going to examine as separate products, or which we have already examined. Hence we shall not expend effort at this point in discussing coverage under “Fire, 'Burglary, 'Money, “Machinery Breakdown,' Personal Accident, 'Fidelity Guarantee,''Public Liability'or 'Loss of Profits.' However, it would be appropriate to offer a brief explanation for:
Pedal Cycle Insurance: This covers pedal cycles against any unforeseen physical loss or damage. The usual types of losses experienced, and which are covered, are those by theft, fire, malicious act, terrorism, etc. Personal legal liabilities of the Insured to third parties are also covered.
Baggage Insurance: The personal baggage of the Insured, or their family members, for the specified value, is insured against theft during travel in India. Baggage lost while kept in a car is also covered provided the car's doors and windows are properly locked at that time. The cover does not extend to a situation where the baggage is being transported by a carrier under a contract of affreightment.
Pate Glass Insurance: This provides for compensation for breakage of Plate Glass or mirrors that are properly fixed, to supporting structure, framework or masonry. Glass which is not properly and securely fixed or mounted, and is in a movable condition, is not covered.
Neon Sign Insurance: Neon Signs are covered against loss by fire, storm and floods, earthquakes, riots and strikes,
terrorist damage, theft and accidental external means.
Corporate Business Segment Property and Indemnity Insurance Products
We shall review six policies under the 'Property and Indemnity' business category. Burglary Insurance: This policy is a product of long standing, which was originally designed for commercial or industrial establishments, but was then extended to individual customers for domestic assets. It offers cover for contents and stocks' in any business against loss by 'Burglary & Housebreaking,' which are defined as theft by means of a forceful entry or exit from a premises, or the threat of use of Force against the Insured and his employees or representatives. It should be noted that the use or threat of use, of force is an essential part of the definition of 'Burglary. Unless this condition is met, the loss, even if it is caused by theft, would not qualify as payable under the policy. Therefore, an ordinary theft, or one where a key was used to gain entry to or to exit from the premises would not be payable under the policy which also excludes all acts where the Insured or his employees or family members are an accomplice or accessory to the crime. However, when this policy is issued to individuals for covering domestic assets then the ordinary cover against Burglary and Housebreaking is extended to include ordinary theft committed without any element of force.
Corporate Segment Property & Liability Engineering Burglary Workmen's Machinery Money Public Liability Electronic Fidelity Guarantee Product Liability Erection All Risks All Risks Directors & Officers --Contractor's P&M Jewelers' Insurance Professional < --- Boiler & P. Plant Bankers Indemnity
0 Comments