Types of General Insurance Policies

8/3/2019 Types of General Insurance Policies

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DIFFERENT PRODUCTS OF

GENERAL INSURANCE

BUSINESS


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AUTO INSURANCE


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Auto Insurance Auto insurance is a kind of insurance, specially

designed to protect the vehicle and vehicleowners against the financial loss caused by an

accident. As per laws of auto insurance in India, it is a

legal requirement to have auto insurance whenowning a vehicle. It also states that every

automobile that is used for a social,recreational or individual purpose has to beinsured


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Types of Auto Insurance

1. Two Wheeler Insurance

2. Car Insurance

3. Commercial Vehicle Insurance


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Two Wheeler Insurance Two wheeler insurance provides a kind of

personal accidental cover for two wheelerowners, while driving the vehicle.

The policy basically provides protection fromany loss or damage to the vehicle arising out ofnatural calamity like fire, protection againstthird party injury, burglary etc.

The amount insured will depend on the currentshowroom price multiplied by the depreciationrate fixed by the Tariff Advisory Committee atthe time of commencement of policy period.


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Car Insurance

Car insurance is the fastest growing category

in the auto insurance segment.

Car insurance includes loss or damage by

accident, third party insurance, insurance

against burglary etc. The amount of premium

will depend on value of the car, state where the

car is registered, year of manufacture etc. Insurance companies are trying hard to make

the claim process simpler and quicker to widen

the existing customer base.


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Commercial Vehicle Insurance

Commercial Vehicle Insurance provides cover forall the vehicles which are not used for personalpurposes, such as Trucks and Heavy MotorVehicles (HMVs).

Commercial Vehicle Insurance protects thevehicle against damage caused due to accident,third party injury, natural calamity, theft etc.

The amount of premium depends on theshowroom price of the vehicle at thecommencement of the insurance period, the placeof registration of the vehicle, etc.


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On the basis of coverage Vehicle insurance is

again divided into two categories:

1. Full coverage auto insurance

2. Third party auto insurance


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Full coverage Auto Insurance Full coverage auto insurance is a kind of

comprehensive insurance. It provides third partyliability services in addition to coverage for damagessustained by car of insured.

In the event of an accident, full coverage autoinsurance will protect the car and any other cars orproperty damaged.

Types of damages covered in this policy consist ofthefts and accidents to certain types of risks.

These insurance policies also provide coverageagainst floods, riots, earthquake and strikes.

If insured pays extra premium, various accessorieswithin a car can be insured by Full coverage autoinsurance.


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Third party auto insurance

Third party or liability auto insurance will onlyprotect another party in the event of anaccident.

So if a car with third party auto insurance hitsanother car, the other car's damages, and allother expenses would be paid by the thirdparty insurance. However, any damage to your

own car would have to be borne by the carowner.

Naturally, these policies are less expensivethan full coverage, as it carries very less risk.


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FIRE INSURANCE


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Fire Insurance Fire insurance is the oldest form of insurance,

it is as old as marine insurance. Its originated

because of the age old fear of fire and humans

failure to control fire. Fire insurance is designed to provide for

financial loss to property due to fire and a few

other related hazards. The fire insurance is

governed by Tariff Advisory Committee

(TAC).


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Examples1. Buildings2. Contents of buildings such as

(a) machinery, equipments, accessories,

(b) Goods, raw materials, semi finished goods,

finished goods. Packing materials etc stored infactories and godowns

3. Electrical Installation of a building,

4. Goods in the open,

5. Dwellings and contents of dwellings,6. Furniture, fixtures and fittings,

7. Pipelines located inside and outside buildings,dwelling and compounds.


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The standard Fire policy covers the following

hazards1. Fire: Usually this excludes destruction or damage caused to

the property by

(i) Its own fermentation, natural heating or spontaneous

combustion (though the spontaneous combustion can becovered at an extra premium)

(ii) Its undergoing any heating or drying process.

(iii) Burning of any property insured, by order of any public

authority.

2. Explosion: This would exclude destruction or damage caused

to boilers or other vessels in which steam is generated. Such

explosion can however be covered by covering boilers under

Boiler Explosion policy under Engineering Insurance.


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3. Aircraft damage: Destruction or damage caused byAircraft, other aerial devices and articles dropped fromthem

4. Lightening5. Riot, strike, malicious and terrorism damage: Direct

visible physical loss, destruction or damage by externalviolent means caused to property but excluding thosecaused by:

(a) Total or partial cessation of work, stoppage,retardation/slowdown, or interruption or cessation ofany process or operation or omission of any kind.

(b) Permanent or temporary dispossession of any building

or plant or factory or unit or machinery resulting fromunlawful occupation by any person or prevention ofaccess to the same.

(c) Permanent or temporary dispossession resulting fromconfiscation, destruction by order of the Government or

any lawful constituted authority.


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6. Impact Damage: Impact by any rail/road vehicle oranimal by direct contact not belonging to or owned by

(a) The insured or any occupier of the premises.(b) Their employees while acting in the course of their

employment.

7. Storm, cyclone, typhoons, hurricane, tornado, andflood

8. Landslide, rockslide etc: Destruction or damagecaused by landslides or rockslide etc. excluding:

(a) The normal cracking, settlement or breeding orbedding down of new structures.

(b) Settlement or movement of made up ground.

(c ) Coastal or river erosion.

(d) Defective design or workmanship or use of defectivematerials.


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9. Missile testing operations

10. Bursting and / overflowing of water tanks,

apparatus and pipes

11. Leakage from automatic sprinkler

installations.12. Bush fire excluding fire caused by forest

fires.


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HEALT

H

INSURANCE


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Health Insurance Health Insurance mainly covers two types of

benefits:

One related to the reimbursement of medical

expenses related to specific disease and the other

is related to hospitalization. Globally the health

cover operate in two ways- Cashless and Cash

reimbursable ones.

Mediclaim is one of the first Health Insurancein India


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Individual Mediclaim Policy This policy covers the hospitalization and domiciliary

hospitalization expenses for disease suffered during period of

policy.

The policy covers the following expenses:

Boarding expenses in a approved hospital or nursing home- as

per the policy terms.

Surgical fees, anesthetist fees, medical practitioner and

consultants fees, specialist fees.

Nursing expenses.

Anesthesia, blood, oxygen, operation theater charges, surgical

appliances, medicines and drugs, diagnostic reports, dialysis etc.

The total liability covered under the policy does not exceed

the total sum assured under the policy.


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Individual Mediclaim Policy

To recover claims, the claimant should be

hospitalized for a minimum period of 24 hours

and also expenses incurred for a period up to

30 days prior to hospitalization and 60 days

after hospitalization could be considered as

part of the claim.


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DomiciliaryHospitalization

This is a medical treatment where the patient

cannot be moved to a hospital or nursing home

due to his condition of lack of

facility/accommodation, and the treatment is

carried out by professional doctors at home.


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Exceptions to Mediclaim

All the pre-existing disease at the time of

taking the policy.

Any disease contracted by the insured within

30 days of taking out the policy. Vaccination or inoculation of any kind

Cosmetic surgery or aesthetic treatment other

than that which is necessitated due to accidentor part of any illness.

Cost of spectacles, contact lenses, hearing aids


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Exceptions to Mediclaim

Dental treatment, or dental surgery of any kindunless requiring hospitalizations

Self injury, use of intoxicating drugs, general

debility etc. Various conditions such as AIDS

Expenses on Vitamins and tonics unless formingpart of the treatment.

Treatment arising from child birth.

Voluntary medical termination of pregnancy.

Naturopathy


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Conditions applicable to Mediclaim Policy Mediclaim is available to persons between 5

and 80 years of age.

Children below 5 years are covered only if one

of the parents is covered concurrently. A 10% discount is available if the entire family

avails of the cover at the same time. Familyincludes spouse, dependent children and

dependent parents. The sum assured is increased by 5% for each

year of claim free insurance, subject tomaximum accumulation for10 years.


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Conditions applicable to Mediclaim Policy The insured is allowed for free health check up

for every four years of coverage, the cost ofwhich should not exceed 1% of sum assured.

The cover could be extended to Nepal andBhutan also.

In claim processing the first intimation ofclaim must be given to the company within 24

hours of admitting in a hospital. Final claim must be filed within 30 days of

completion of treatment.


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Pre -Acceptance Health Checkup

Pre- acceptance health check-up is mandatory

when age is 50 years and above and he/she is

seeking insurance cover for the first time as an

individual or as a member of a family. Proposer/Insured Person will be required to

undergo the following Medical Check-up or

any other medical test as required by theCompany either on his/her own or from its

authorized Network Diagnostic Centre in

prescribed format.


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Medical Test Required

Age (in years) 50 and above

MEDICAL TEST PHYSICAL EXAMINATION

BLOOD TEST

URINE SUGAR

BLOOD PRESSURE

ECHO CARDIOGRAPHY

EYE CHECKUP INCLUDING

RETINOSCOPY


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Group Mediclaim Policy The Group Mediclaim policy is available to any

corporate, association and group of people, there

should be minimum number of persons to be

covered under this policy. The policy holder in this type of insurance is the

group itselfand the premiums are payable by the

group. The individual members may enter and exit the

policy upon their becoming or ceasing to be the

members of the group.


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HOME INSURANCE


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Home Insurance

Home is a cover against the possible damages

to your house. If any damage occurs to your

home, company will pay for that.

In standard home insurance package you mayfind different kinds of coverage but most of the

package covers repairing and rebuilding the

house. But now due to concentratedcompetition in this sector companies are

providing other benefits also.


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Types of Home Insurance in India

Building Insurance

Content Insurance


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Building Insurance

Insuring the building or building structure is

important since it provides you security against

foreseeable losses in case your building is

destructed and harmed in any natural or man-made calamities.

A home insurance policy must cover

expenditure to rebuild your home in the eventof it being totally destroyed or damaged to the

point that complete rebuilding is essential (in

eventualities like earthquake, fire accident,

etc).


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Building Insurance

This coverage includes only the cost incurred

to reconstruct the home if it is damaged and

not for its market value such as the cost of land

etc.

Sum insured is calculated by multiplying the

built up area of your home with the

construction rate per sq. feet.


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Content Insurance

Contents insurance normally offer coverage

against the natural calamities, is optional in

home insurance policy but due to increased

risk of natural calamities, fire and burglaries,

demand for content insurance is increasing.


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Protections under Content Insurance

Contents insurance for home insurance plans generallyincludes the following protections;

Protection to movable goods

Anything that is not a fixed parts of your home, for

example your appliances, electronic goods, furnitureand clothing, etc.

The insured amount given against the perils forbuilding or structure and its contents is assessed eitheron 'reinstatement value basis or 'market value.

Reinstatement value - Is the value for replacing theitem with a new item of same type and make.

Market value - Is the reinstatement value lessdepreciation depending on the age of the item.


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List of loss/damages which are covered under

Home insurance Fire, Explosion, lightning, thunder bolt, earthquake.

Burglary, house breaking or any attempt of threat.

Riot strike, labour disturbance and malicious act.

Aircraft and other Aerial devices or articles droppedthere from as well as falling trees.

Bursting or overflowing of underground water orsewerage pipes.

Flood, Typhoon but excluding rain damage except

when occurring during or immediately after typhoon. Impact by Road Vehicle.

Home insurance provides you with financial protectionagainst any damage your property might occur.


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MARINE

INSURANCE


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Marine Insurance Insurance was first introduced to the world by the

concept of Marine Insurance. There were greatestdangers while travelling or sending the goods viasea. They were exposed to unknown risks such as

sea conditions, pirates, war, weather, disease,spoilage, etc.

Insurance was devised by early sea going tradersas a form of mutual monetary pool that was used

by the participating ships to make good the lossesof members.

The marine insurance is considered to be themother of insurance.


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Type of marine insurance

1. Cargo, and

2. Hull insurance.


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Cargo insurance Cargo insuranceprovides cover for losses or

damages that could occur to goods in transit onsea, rail, road or air. The insurance is purchasedby the owners of cargo/shipments.

Cargo Insurance can cover: Shipments by inland ships, streamers, boats and

crafts.

Coastal shipments by streamers, sailing vessels,

mechanized boats etc. Export and import shipments by ocean-going

vessels of all types.

Consignment shipped by rail, road or air and

articles sent by post or couriers.


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Hull insurance Hull insurance concerns the insurance of the

carrier of goods. This type of insurance is

usually purchased by the owner of the

transportation vehicle. In cargo insurance, the big question is who is

responsible for purchase of insurance on the

goods, which are subject to sale, depends on

the terms of sale contract.


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The responsibility for the purchase of

insurance is that of the buyer of the goods in

case of Free on Board (FoB), Free on Rail

(FoR), and Cost and Freight (C&F) policies.

In Cost, Insurance and Freight (CIF) policies,

however, the seller is responsible for arrangingthe insurance.

In export/ import trade, the normal practice is

for the exporter to ask the importer to open aletter of credit L/C with a bank in favour of the

exporter.


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REINSURANCE


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Reinsurance Reinsurance provides financial cover to insurance

companies in case of substantial losses sufferedby them.

Through reinsurance, insurance companies can

spread and share the risk of losses with anothercompany.

This general insurance policy is especially usefulwhen insurance companies face the risk of payingnumerous claims simultaneously, for examplewhen a natural disaster strikes.

In such situations, there is a high risk ofinsurance companies going bankrupt.


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Types of Reinsurance

1. Proportional: In this type of insurance,reinsurers receive a specific share of risks andpremiums on each policy that an insurerunderwriters

2. Non-proportional (Excess of Loss): In this typeof insurance, an insurer takes on all the losses tilla specific limit (retention) is reached. After thatlevel, the reinsurer takes on all the losses.

3. Risk-attaching basis: In this type, a reinsureraccepts only those claims that were made forpolicies bought before the reinsurance policystarted.


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Types of Reinsurance

4. Claims-made basis: This policy covers all claimsreported to an insurer within the policy period,

irrespective of when the event causing the loss

occurred.

5. Loss-occurring basis: This is a type of

reinsurance policy, wherein all claims occurring

during the period of a contract, regardless of the

time when the policy was bought, are covered.Losses due to any claims made after the expiry

of a contract are not covered.


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Types of Proportional Reinsurance Policies

1.Quota share: Through this insurance, an

insurer cedes a specific percentage of losses

and premiums. For example, an insurance

company can purchase a 50% quota share

treaty and share half of all premiums and

losses with the reinsurer.

2. Surplus reinsurance: Through this insurance,an insurance company cedes those insurances

where risks are higher than a specified amount.


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Types of Non-Proportional Reinsurance Policies

1. Per risk: In this type, an insurance company

might insure a policy with a specific limit and

then buy per risk reinsurance to cover losses

of more than a limit within the policy.2. Per occurrence: Also called catastrophe

excess of loss, this policy has insurance

policy limits less than the reinsuranceretention.

Documents

Types of General Insurance Policies