Insurance Policies and Claims

The use of large deductible policies has increased dramatically during the last 5 to 10 years for the following reasons:

1. Insurance cost savings;
2. Loss control incentives;
3. Reduced residual market burdens; and
4. Cash flow advantages.

In Public Liability Policy, the sum insured is referred to as Limit of Indemnity. This limit is fixed per accident and policy period which is called Any One Accident (AOA) limit and Any One Year (AOY) limit, respectively. The AOA limit which is the maximum amount payable for each accident, should be fixed taking into account the nature of activity of the insured and the maximum number of people who could be affected and the maximum property damage that could occur, in the worst possible accident in the insured's premises. 

Vehicle insurance (also known as car insurance, motor insurance or auto insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or any bodily injury resulting from traffic collisions and against liability that could also arise from there. Thus, it is mandatory to be kept in the vehicle (motor car). 

The administrator of motor third party insurance is General Insurance Corporation of India.

A health underwriter needs to understand the risk profile of the insured, age, medical aspects, fitness levels and family history and measure the effect of each factor affecting the risk. The objectives of underwriting are achieved, in short, by deciding the level of acceptability, adequacy of premium and other terms.

A claim will arise under an insurance policy when the insured events happen. 

After settlement of claims, the insurers under subrogation rights applicable to insurance contracts, are entitled to the rights and remedies of the insured and to recover the loss paid from a third party, who may be responsible for the loss under respective applicable laws. Thus, insurers can recover the loss from shipping companies, railways, road carriers, airlines, port trust authorities etc.

MRI is an insurance policy that provides financial protection for home loan borrowers and their families. Specifically, MRI helps settle outstanding home loan amounts in the event of death or total disablement of the borrowers.

A function of a direct broker as per IRDA Regulations is to assist clients in paying premium under section 64VB of Insurance Act, 1938. Other functions are:-  (a) obtaining detailed information of the client's business and risk management philosophy; (b) familiarising himself with the client's business and underwriting information so that this can be explained to an insurer and others; (c) rendering advice on appropriate insurance cover and terms; (d) maintaining detailed knowledge of available insurance markets, as may be applicable; (e) submitting quotation received from insurer/s for consideration of a client; (f) providing requisite underwriting information as required by an insurer in assessing the risk to decide pricing terms and conditions for cover; (g) acting promptly on instructions from a client and providing him written acknowledgements and progress reports; (h) assisting clients in paying premium under section 64VB of Insurance Act, 1938 (4 of 1938); (i) providing services related to insurance consultancy and risk management; (j) assisting in the negotiation of the claims; and (k) maintaining proper records of claims; 

The coverage and the sum assured depend on the different covers opted and the type of individual availing the plan. All the options are true in the context. 

Benefits of Householders insurance:

• comprehensive coverage to both content and structure of home. -Securing assets in any mishap. -Home insurance policy is at comparatively lower premium rates than other insurance policies. etc. 

Fire insurance policy is suitable for commercial establishments as well as for the owner of property, and for individuals / financial institutions who have financial interest in the property.

Personal Accident cover for Owner-driver : (a) the owner-driver is the registered owner of the vehicle insured. (b) the owner-driver is the insured named in this policy. (c) the owner-driver holds an effective driving license. (d) capital sum insured Rs.1 lac (two wheelers) capital sum insured Rs.2 lacs.(private cars and commercial vehicles.)

The main features of underwriting are as follows

i.    To identify risk based upon the characteristics ii.   To determine the level of risk presented by the proposer iii.  To ensure that the insurance business is conducted on sound lines

This policy offers a solution by covering profit lost due to reduction in turnover arising from interruption of business following damage to the property insured. This policy can be taken only in conjunction with Fire Policy or Machinery Breakdown policy.