Hand Book

of
General Insurance

Concept of General Insurance

 Foreward

Dear Friends,

In the ever-challenging environment of insurance ,it is very necessary to keep ourselves

abreast with the different policies available in the insurance market. An effort has been
made to make available the salient features of various retail insurance policies.

I would like to dedicate this book to all the sales persons of Velocity (VIBS ) ,who toil
hard to make the clients feel the importance of insurance.

I hope that this book will help each one of us create new dimensions in the Indian
Insurance Industry by helping our clients take superior and informed decisions for
coverage of their valuable possessions.

Lastly , I would thank Mr Subir Mukherjee and all my colleagues, Superiors and friends
for bestowing their knowledge , experience and support to make this reality a possibility.

With Regards,

Santosh K. Sahoo
MBA,PGDCA,LIII,CBE, LLB
Email Id : santosh.sahoo@velociti.in

Contents :
 Defination & Basic Principles of Insurance
 Fire insurance
1. Definition
2. Policy covers
3. Does not cover
4. Add-on cover
5. Type of policy
 6. Fire tariff Rules and Regulation
 Motor Insurance
1. Scope of cover
2. Type of Coverage
3. IDV
4. Depreciation
5. Geographical Zone
6. Cover Note
7. Cancellation of Insurance
8. Double Insurance
9. NCB
10. Sunset Clause
11. Compulsary Deductable
12. IMT

 Health Insurance
1. Mediclaim Insurance
2. Critical Illness Insurance
3. Personal Accident Insurance
4. Medical Expenses Extention
5. Educational Grant
6. Risk Group

 House Holder Package policy

 Shopkeeper’s package policy
 Office Package Policy
 Industry All Risk
 Marine Insurance
1. Type of Covers
2. Scope of Cover

 Machinery BreakDown Insurance

 Boiler and Pressure Plant Insurance
 Electronic Equipment Insurance
 Contractor All Risk
 Erection All Risk
 Contractor Plant And Machinery
 Money Insurance
 Portable Electronic Equipment Insurance
 Oversea Travel Insurance
 Farmers Package policy
  Workmen Compensation
 Public Liability
 Insurance Claim And Servicing

Insurance – Defination & Basic Principles

Meaning of Insurance:

Insurance provides financial protection against a loss arising out of happening of an

uncertain event. A person can avail this protection by paying premium to an insurance
company. A pool is created through contribution made by person seeking to protect
themselves from common risk. Premium is collected by insurance company which also
act as trustee to the pool. Any lose to the insured in case of happening of an uncertain
event is paid out of this pool. Insurance works on the basic principle of risk sharing. A
great advantage of insurance is that it spreads the risk of a few people over a large group
of people exposed to risk of similar type.

Defination :
Insurance is a contract between two parties whereby one party agrees to undertake the
risk of another in exchange for consideration know as premium and promises to
indemnify the other party on happening of an uncertain event.

The party bearing the risk is know as the “Insurer” or “assurer” and the party whose risk
is covered is known as “Insured “or “Assured”.

Concept Of Insurance / how insurance works :

The concept behind insurance is that a group of people exposed to similar risk come
together and make contributions towards formation of a pool of funds. In case a person
actually suffers a loss on account of such risk, he is compensated out of the same pool of
funds. Contribution to the pool is made by a group of people sharing common risks and
collected by the insurance companies in the form of premiums.

Meaning of General Insurance :

General Insurance includes those insurance policies which are not covered under the life
insurance . General insurance provides protection against risk of loss to assets like home,
motor vehicle etc. Common general insurance plans include motor insurance, fire
insurance, personal accident insurance, health insurance, marine insurance etc.

Basic Principle of General insurance :

Insurance requires for its validity that the insured shall be so related to the subject-matter
of the insurance that he will benefit from its survival or will suffer from loss or damage
to it or incur liability in respect of it. In the absence of such an interest, known as an
insurable interest, the insurance will be invalid. Everyone has an insurable interest n his
own life and spouses are deemed to have such an interest in the lives of each other.

In order for a risk to be insurable the proposer must have an insurable interest in the risk.
An example of insurable interest would be in order to insure a car it would need to be
yours or a member of your families. So you could not insure your neighbor’s car, as if it
is lost then you pose no financial loss.

In simple terms, insurable interest can be understood as that interest of a person in some
property, or life, where damage or loss to the property would lead to a financial loss to
the person, and the continued preservation of the property insures their financial benefit.
Insurance contracts without insurable interest have no sanction of the law as they amount
to speculation. Insurable interest of a person in a particular property can be understood as
the specific interest whereby a person stands to suffer a direct financial loss in the event
the particular property is damaged or lost, and thus has a financial interest in it’s
protection fro loss. The owner of a property has absolute insurance interest. when a
person insures a property, what is insured therein, is his interest in that property. By this
principle , insurance interest exists to other parties like lessor,lessee,financiers,etc., but
their interst is limited to the extent of their financial commitment only. The insurable
interest must exist both at the time of the proposal and at the time of claims.

However, in the case of Marine insurance contacts which are assignable without the
consent of the insurers, insurable interest must exist at the time of loss only( marine
insurance contracts are governed by marine insurance Act of 1963 ).

Principle of Indemnity :

Indemnity means that the insured person is placed, financially,in the same position, as he
was before the loss. The intention and purpose of insurance is to make good the loss. The
loss should be reimburshed in full, but no one should make a profit from the loss,by
gaining an amount that is greater than the value of the loss suffered. All insurance
contacts, with a few expectations, are based on this principle , and are called contracts of
indeminity. The principle of indemnity states that a person should be placed, through
insurance , in the same financial positin as he was before the occurrence of the loss.

The exceptions to the rule are found in personal accident poliies,agreed value policies in
marine insurance and valuables and reinstatement policies like in engineering policies.
These are also contracts of indeminity but by a special application of the principle, the
measure of indeminity is decided at the time of entering into the contract itself, and these
are called agreed value policies or contracts of modified indeminity.

Personal accident policies are called benefit policies. Basically all human life,
irrespective of economic-social status,has equal value. However, for the purpose of
practical issues as fixation of sum insured and payment of compensation, person with a
higher economic capacity justifiable needs a higher compensation as a benefit. Hat is also
the only realistic way to settle the issue sum insured. Hence personal accident policies
tend to link the sum insured to earning capacity, but within the limit allow a person
choice of sum insured and do not reopen the question of the value of loss suffered in the
event of claim. The sum insured is an agreed value reached at the time of insurance.

For different reasons, but with similar results, marine policies also fix the value at the
time of insurance, and once agreed to, this value is not re-examined or questioned at the
time of a claim. Adequacy of sum insured is therefore not tested.

Proximate Cluse :
Proximate cause is the initial act which sets off a natural and continuous sequence of
events that produces injury. In the absence of the initial act which produces injury ,no
injury would have resulted. Any time you act,you start a seriesof natural and continuous
events to occur ( for example, after swinging your arm with a ball in your hand, you
release it and the ball then rolls down a hill ).

Responsibility for injury lies with the last negligent act that produces the injury ( after
the ball rolls down the hill, a stranger pick it up, throws it through a window which
breaks the glass,causing the glass to shatter and strike a person who was seating next to
the window,cutting her arm and requiring her to obtain medical treatment).In this
example, although you caused the ball to roll down the hill,your act is not the proximate
cause of the injury to the lady sitting next to the window,the stranger’s act is the
proximate cause of the lady’s injury and stranger , not you , should be held responsible
for the injury that she suffered.

Proximate cause can be understood as the active and efficient cause that produces,
without the intervention of any other cause, an unbroken chain of events that culminate in
the occurrence of the said event or loss.

Subrogation :
Subrogation is the best known as a concept of insurance law. When an insurer is required
to pay a claimant a sum of money, it is almost always allowed to sue in the name of the
claimant against any person who was responsible for the loss. This concept allows an
insurance company to sue on behalf of its insured if it is required to pay the insured for a
loss caused by another person. However, it also allows an insurance company to recover
against its own insured when it is required to pay a third party claimant under the
authority of statute,where otherwise the insured would not be covered for the loss. In
most cases, subrogation is fought between two insurance companies disputing who was
ultimately responsible for the loss without putting a financial burden on the insured
parties.

The party seeking to enforce the rights of another is the subrogee. The party whose rights
the subrogee is enforcing is the subroger. The subrogee must usually sue the tortfeasor in
the name of the subrogor. Standard insurance contracts require the insured to cooperate
with their insurer in pursuing subrogation against third parties. If the insured refuses to
cooperate, the insurer can sue the insured for breach of contract as well as the third party
tortfeasor.

Subrogation also exists in the law of suretyship: when a surety pays or performs on
account of the principal’s default, he ordinarily has the right to recover the amount of his
payment or the costs of his performance from the principal, even in the absence of an
express agreement by the principal to do so.

The Law of Subrogation lays down that when one entity (insurance company) has made
good the loss of another (insured), or has accepted liability for it, then the Insurance
Company acquires all the related rights and duties of the Insured with respected to the
damaged property. The Insurance Company can proceed to sue and recover whatever was
due to the Insured from parties responsible for the loss, and can also takeover the
damaged property and sell it to realize the best price possible.

Subrogation lies in assuming the legal rights of a person for whom expenses or a debt has
been paid. Typically, subrogation occurs when an insurance company which pays its
insured client for injuries and losses then sues the party which the injured person
contends caused the damages to him/her.

Subrogation condition is another corollary to the principal of Indemnity. A loss may

occur accidentally or by the action or negligence of third party (not workmen). The
property owners have a right to proceed against the offending third party to recover the
loss /damage and also under their insurance policy but not under both. If the insured opts
to recover the loss under the insurance policy, which is faster and does not involve
litigation, he will surrender his rights against the third parties in favour of the Insurers
signing a ‘Letter of subrogation’ on an appropriate stamp paper.

Exceptions to this are life insurance policies wherein insured /beneficiaries can claim
under an insurance policy and also proceed against the offending third party.

Subrogation is the legal right of one person, having indemnified the other in a contractual
obligation to do so, to stand in the place of another and avail of all the rights and
remedies of the another, whether enforced or not.

Contribution
Contribution condition is a corollary to the Principle of indemnity. If an insured obtains
more than one policy covering the same risk, he cannot recover the same loss from more
than one source so that he is not benefited by more than ‘Indemnity’. Contribution
condition checks that each policy pays only a ratable portion under each separate policy.
Otherwise a Insured could recover multiple amounts from different policies and would
wind up making a profit, out of a calamity like a loss. This would defeat the spirit and
purpose of Insurance.

Utmost Good Faith

Both the parties to a contract are expected to observe good faith. However, the good faith
assumes utmost importance when Material Facts are concerned and therefore utmost
good faith should be observed on matters relating to Material Facts. (A material fact is
the information, which acts as a criterion for acceptance of insurance contract and the
price at which to do so. The insurers, who issue the contract document, have the same
duty to observe good faith while issuing the policy and should ensure that there is no
ambiguity in the contract wording).

All Contracts are based on Good Faith, and breach of this vitiates them. However in
Insurance, the Insurer is expected to know much less about the details of the property he
insures than the owner of the property itself is supposed to know. Hence it is the specific
duty of the Insured to declare all the facts known to him, or which he is expected to
know, about this property that would materially effect the risk and influence the judgment
of the Insurer to accept the risk and determine its pricing. Any mis-descreption,
misrepresentation, alteration, breach of any express warranty make the contract void, and
would allow the Insurer to refuse a claim.

Arbitration
When liability under the policy is admitted but the quantum is disputed, the insured
cannot rush to a Court of law without first referring the dispute to Arbitration as per
‘Indian Arbitration and reconciliation Act – 1996’. In keeping with the provisions of the
Act, the insured may appoint an arbitrator to be followed by appointment of another
arbitrator by the insurers. They can also appoint a single arbitrator, to represent both of
them. If the two separate arbitrators cannot reach an agreement, both the arbitrators can
appoint a third arbitrator called umpire. The award of the Arbitrators is binding on both
the parties to the dispute and cannot be challenged unless a point of law is involved.

The jurisdiction of arbitration proceedings is within Indian territory. However, when

foreign funding is involved, the financiers who are also joined in the policy as co-insured
may insist upon conducting the Arbitration proceedings in their own country. In such a
case, the insurers may agree to modify the arbitration condition suitably.

FIRE INSURANCE
Origin of Fire Insurance:
Often the Great Fire of London of 1966 is referred to as a historical catalyst in the
development of Fire Insurance. In reality several factors gave impetus to this
development. The growth of industries consequent to the Industrial revolution of the 17th
and 18th century further underlined the need protection of these Industrial assets against
the damage caused by catastrophic events like Fire, Earthquake, Storm and Floods, the
damaged caused by rioters or striking workmen. Captains of industry and Finance
quickly realised the importance of fire insurance in economic life. In the 20th century the
explosive expansion of industrial activity carried this process further and made “Fire
Insurance” a compulsory requirement for the industrial and financial sector. It now
provides the vital umbrella of protection against sudden losses and resultant economic
hardships.

Definition of Fire
Fire Insurance Business is defined in the Insurance Act, 1938 as “the business of
effecting, otherwise than incidentally to some other class of insurance business,
contracts of insurance against loss by or incidental to fire or other occurrence
customarily included among the risks insured in fire insurance policies”. In simple
words, “Fire Insurance” refers to the activity of granting-obtaining insurance against
damage caused by “fire” and several other perils like Riot, Strike & Malicious Act,
Earthquake, Storm, Floods, etc. which have come to be historically offered by Insures in
association with cover against “Fire”.
“Fire” is defined by the Oxford English Dictionary, which offers some dozen different
shades of meaning, chiefly describing it as
 State of combustion of substance with oxygen, giving out light and heat
 Destructive burning
 Undergo ignition
In everyday life, in simple terms, “Fire” refers to the actual burning of something or
object, with visible flames, smoke and heat. Often, smouldering or singeing,
accompanied by smoke, but without flames, also invites the description of being burnt,
though flames may not have been present.
The Fire Policy or the Tariff do not offer a definition of “Fire” in the conventional
manner. No single statement states what “Fire” can be defined as. Hence the dictionary
meaning of Fire must be taken and understood in the light of the terms & conditions of
the insurance policy. In the language of insurance, “Fire” is said to have occurred when
the following conditions are satisfied:
 There is actual ignition of property
 There is something on fire, which ought not to have been on fire (so logs in a
fireplace are not intended to be covered here.)
 The fire must be accidental as far as the person insured is concerned.
The Fire Policy covers several seemingly unrelated perils either as in built covers or as
additional covers available on payment of extra premium.

Variants:
As defined by the Insurance Act, the Fire Insurance Portfolio refers exclusively to
policies issued to cover Fire and allied perils under the rule of the All-India Fire Tariff. In
addition to this Insurance Companies now offer the “Fire” group of perils as a part of
“Package” for specific segments or requirements like Householder’s Package,
Commercial Package, Shopkeeper Package Policies.

Standard Fire and Special Perils Policy

The Policy Covers
 Fire, lightning, explosion /implosion
 Aircraft damage
 Riot, strike, terrorism malicious damage (RSTMD)
 Storm, tempest, flood, inundation (STFI)
 Impact damage, subsidence and landslide
 Bursting and /or overflowing of water tanks, apparatus and pipes
 Missile testing operations
 Leakage from automatic sprinkler installation,
 Bush fire
 Architect’s fees upto 3% of claim & Cost of removal of debris upto 1% of claim.
 Temporary removal of plant and machinery upto 60 days
The policy does not cover
Destruction /damage by own fermentation, natural heating or spontaneous combustion
Property undergoing any heating or drying process
Burning of property insured by order of any public authority
Explosion /implosion damage to boilers, damage caused by centrifugal forces
Forest fire, war and nuclear perils
Bullion, curios, works of art, cheque, currency etc (unless specified)
Electrical short circuits, consequential losses
Theft during /after operation of peril

Policy can be extended to cover

 Architect’s, Surveyor’s and Consulting Engineer’s fees exceeding 3% of claim
 Removal of debris exceeding 1% of claim
 Deterioration of stocks in cold storage resulting from accidental power failure due
to an insured peril
 Deterioration of stocks in cold storage consequent to change in temperature
 Forest Fire
 Impact damage due to insured’s own vehicle
 Spontaneous Combustion
 Omission to insure additions, alternation or extensions upto 5% if Sum Insured
 Earthquake (Fire and shock)
 Spoilage material damage, leakage and contamination, Loss of rent
 Temporary removal of stocks
 Additional expenses for rent for an alternative accommodation
 Start up expenses

Discounts Applicable
Reduction in rate is allowed due to deletion of STFI & RSMD perils
Good Feature Discount (E.g.: Favourable Claim Experience, Type of Construction, Age,
Maintenance & Housekeeping, Distance, Safety Parameters, etc.)

Basic of Sum Insured:

Market Value: The sum insured can be fixed to represent the current market value of the
assets as represented by its sales value in the market. A claim under this policy gets
settled after deduction of depreciation for the number of years of use from its new value.

Reinstatement Value: The Sum Insured here represents the cost of a brand new item of
identical specifications necessary to replace /reinstate the effected item. Here the claims
get paid without deductions for depreciation.
Escalation Clause: It will be in order for Insurers to allow automatic regular increase in
the sum Insured throughout the period of the policy in return for an additional premium
to be paid in advance. The terms and conditions for this extension shall be as follows:
a) The selected percentage increase shall not exceed 25% of the sum Insured.
b) The additional premium, payable in advance, will be at 50% of the full rate, to be
charged on the selected percentage increase.
c) The Sum Insured at any point of time would be assessed after application of the
Escalation Clause.
d) Escalation Clause will apply to policies covering Building, Machinery and
Accessories only and will not apply to policies covering stock.
e) Pro-rata condition Average will continue to apply as usual.
f) The Automatic increase operates from the date of inception upto the date of
inception upto the date of occurrence of any of the insured perils.

Type of Policies:
Floater Policy: Floater policies can be issued for stocks at various locations under one
Sum Insured. The rate shall be the highest rate applicable to insured’s stocks at any
location with a loading of 10%. In case Stocks in a process block is higher than the
storage rate, the process rate plus 10% loading shall apply. However, if the stocks
situated within Godowns /process blocks in the same compound are covered under floater
policy, no floater extra is chargeable.

Declaration Policy: To take care of frequent fluctuations in stocks / stock values,

Declaration Policy /policies ca be granted subject to the following conditions:
a) The minimum sum insured shall be Rs.1crore in one or more locations and the
sum insured shall not be less than Rs.25 lakhs in at least one of these locations. It
is necessary that the declared values should approximate to this figure at
sometime during the policy year.
b) Monthly declaration based on a) the average of the values at risk on each day of
the month or b) the highest value at risk during the month shall be submitted by
the Insured latest by the last day of the succeeding month. If declarations are not
received within the specified period, the full sum insured under the policy shall be
deemed to have been declared.
c) Reductions in sum insured shall not be allowed under any circumstances.
d) Refund of premium on adjustment based on the declarations / cancellations shall
not exceed 50% of the total premium.
e) The basis of value for declaration shall be the Market Value anterior to the loss.
f) If after occurrence of any loss it is found that the amount of last declaration
previous to the loss is less than the amount that ought to have been declared, then
the amount which would have been recoverable by the insured shall be reduced in
such proportion as the amount of said last declaration bears to the amount that
ought to have been declared.

Floater Declaration Policy:

Floater Declaration policy /policies can be issued subject to a minimum sum insured of
Rs.2 crores and compliance with the Rules for floater and Declaration policies
respectively except that the minimum retention shall be 80% of the annual premium.

All India Fire Tariff – General Rules & Regulations

 Only Standard Fire and special Perils Policy (hereinafter referred to as Policy)
with the permitted “Add-on” covers as appearing under Section VIII) if any, can
be issued. Note: - Unless otherwise specifically provided for, this tariff is
applicable to land-based properties only.
 The wordings of the policy shall be s shown in Section II of the Tariff.
 Policies should be read together with proposal form(s), schedule, specification,
endorsements, warranties and clauses as one contract.
 Policies covering Buildings and /or contents shall show blockwise separate
amounts on (i) Building (ii) Machinery (iii) Stock and Stock-in –Process and (iv)
Furniture and other contents.
 It is permissible to exclude Storm, Tempest, Flood and Inundation group of perils
and /or Riot, Strike, Malicious Damage perils at inception of the Policy only by
deleting the relevant perils from the Policy. The deletion shall apply for the entire
property in one complex /compound /location covering the entire interest of the
Insured under one or more policies without any option for selection. Reduction in
premium rates for such deletion(s) may be allowed as shown the relevant sections
of the Tariff. When these perils are deleted from the scope of the policy, the
general exclusions shall include these perils.
 Any risk, which has not been provided for in the Tariff, shall be referred to the
Committee for rating. Provisional rate of Rs. 2.50 per mille shall be charged in
such cases for covering the risks under Standard Fire & Special Perils Policy. No
discounts and /or agency commission shall be allowed on this rate. For add-on
covers, additional rates provided in section VIII shall be charged.

Valued Policies: Valued Policies can be issued only for properties whose Market Value
Cannot be ascertained e.g. curious, Works of Art, Manuscripts, Obsolete machinery and
the like subject to the valuation certificate being submitted and found acceptable by the
insurers.

Long Term Policies: Policies for a period exceeding 12 months shall not be issued
except for “Dwellings”.

Mid Term Cover: Generally, it is not permissible to grant mid-term cover for STFI and
/or RSMTD perils. The following provisions shall apply, where such covers are granted
mid-term:
 Insurers must receive specific advice from the insured accompanied by payment of
the required additional premium in cash or by draft. This additional premium shall not
be adjusted against existing Cash deposits or debited to Bank guarantee.
 Mid-term cover shall be granted for the entire property at one complex /compound
/location covering the entire interest of the Insured under one or more policies.
Insured shall not have any option for selection.
 Cover shall commence 15 days after the receipt of the premium.
 The premium rates as under shall be charged on short period scale (as per Rule 8) on
full sum insured at one complex /compound /location covering the entire interest of
the insured for the balance period i.e. upto the expiry of the policy.

Payment of Premium: Premiums shall be paid in full and shall not be accepted in
installments or by deferred payments in any form. It is not permissible to spilt sum
insured of the same property under various policies for different periods of insurance to
derive advantage of deferred installments for payment of premium. Notwithstanding the
above, necessitate issuance of such policies.

Partial Insurance: It is not permissible

a) To issue a policy covering only certain portions of a building. Notwithstanding
this, the plinth and foundations or only the foundation of a building may be
excluded.
b) To issue a policy covering only specified machinery (except Boilers), parts of
machine or accessories thereof housed in the same block /building. Where
portions of a building and /or machinery therein are under different ownership, it
is permissible for each owner to insure separately but to the full extent of his
interest on the building and /or machinery therein, In such cases, the Insured’s
interest shall be clearly defined in the policy.

Rules for Cancellation:

On the option of the Insured: Retention of premium shall be at Short Period Scale for
the period the policy been in force, subject to the retention of minimum premium by the
Insurer. During the currency, if a policy is replaced with the same insurer by a new
annual one covering the identical property, refund of premium may be allowed on pro-
rata basis at the original rates for the sum insured replaced. For the sum insured not
replaced, refund must be calculated after charging premium at short period scale on such
sum for the time the insurance has been in force subject to retention of the minimum
premium by the insurer. However, in case a policy is cancelled on account of a
Government Order or on completion of a “Building in course of construction” or where
Buildings are demolished, pro-rata refund of the premium may be allowed.

At the Option of the Insurer: Refund of premium shall be on pro-rata basis for the
unexpired term.

Mid term revision of Sum Insured: Mid-term revision in sum insured shall be allowed
as follows:

 Increase in sum insured : On pro- rata basis.

 Decrease in sum insured : On short period basis
Computation of Premium : Premium is calculated as per the following step down
formula-
 Basic rate
 5% reduction for sprinklered blocks if applicable( for risks rateable under
sections III, IV, V and VI ).
 Reduction in rates for deletion of STFI and/or RSMTD perils, if opted out.
 Tariff extra for Kutcha construction if applicable.
 Discount/loading for Good/ Adverse features
 Discount for voluntary deductable shall be applicable on the total premium
calculated on the basis of final rate worked out as above.

Rating parameters : Rating is done on the basis of the occupancy as described in the
following sections :

Section III : Dwellings, Offices, Hotels, shops etc

Section IV : Industrial / Manufacturing Risks
Section V : Utilities located outside the industrial / manufacturing Units
Section VI : Storage risks located outside the industrial /manufacturing units.
Section VII : Tank forms/Gas holders located outside the industrial/manufacturing units.
Section VIII : Add on Cover.

Motor Insurance :
Legality and Scope of Cover :
Motor Insurance in India can not be transacted outside the purview of the Indian Motor
tariff unless specifically authorized by the Tariff Advisory Committee. The Tariff
classified vehicles into 3 main categories according to use :

Private Cars : 4 wheeled vehicles registered as private cars by the R. T .O .,and used for
private purpose only.

Two Wheelers – 2 wheeled vehicles with an engine capacity exceeding 25cc.

Commercial Vehicles : Vehicles used for the commercial purposes only ( Profit and
gain) ,e.g. Transport vehicles.

Commercial vehicles are further classified into the following :

  Goods carrying vehicles ( Truck-public/private carriers , 3W , 2W )
 Passenger vehicles ( Buses, Taxis, Maxi- cabs,3w,2w )
 Miscellaneous & Special vehicles ( Tractor, Dumpers, Loaders, Road Rollers,etc)
 Trailers

The Indian Motor Vehicles Act, 1988 requires that the insurance policy must
- Be issued by a person who is an authorized insurer
- Offer cover ( Specified limits) against liability for death or bodily injury to any
person or damage to third party property arising out of use of vehicle
- Insures death or injury to any passenger of a public service vehicle out of use of
vehicle in public place.
The Act also defines the following :
Motor Vehicle – Mechanically propelled vehicle/ used upon roads/ power of propulsion
may be external or internal / above 25cc.
- Driving Licence
- 2-wheller with capacity upto 50 cc- 16 years and above
- Other vehicles excluding transport vehicles- 18years & above
- Transport vehicles – 20 years & above

The Act , further , states the following stipulations:

- Driving uninsured vehicles ( section 196 of MVA )- punishable by imprisonment
upto 3 months or fine upto Rs 1000/- or both.
- Transfer of certificate of insurance ( section 157 of MVA )- In case of transfer of
vehicle, the policy is deemed to have been transfer w.e.f. date of transfer and
transferee should make an application of transfer within 14 days to insurance
company.

Type of coverage :
Liability Only :
This covers Third Party Liability for bodily injury and/or death and property damage.
Personal accident covers for Owner- Driver is also included.

Package Or Comprehensive Policy :

This covers loss or damage to the the vehicle insured in addition to third party liability.

Proposal Form : Proposal form as specified in section 5 of the Indian Motor Tariff is
required to be submitted by the insured to the insurer before the commencement of cover
and at renewal in case of material alteration. For change of IDV at each renewal ,however
a fresh proposal is not necessary. Such changes may be advised by the insured to the
insurer by a letter signed by the insured /insured’s authorized signatory ( for
companies/body corporate ) and sent to the insurer by recorded delivery. In case of
change of insurer , a fresh proposal is required to be submitted to the new insurer. The
insurers may include additional questions in the proposal form for their information and
use.

Insured’s Declared Value :

The insured’s declared value ( IDV ) of the vehicle will be deemed to be the SUM
INSURED for the purpose of this tariff and it will be fixed at the commencement of each
policy period for each insured vehicle. The IDV of the vehicle is not fixed on the basis of
manufacturer’s listed selling price of the brand and model as the vehicle proposed for
insurance at the commencement of the insurance /renewal and adjusted for depreciation (
as per schedule specified below).The IDV of the side car (s) and/or accessories, if any
fitted to the vehicle but not included in the manufacture’s listed selling price of the
vehicle is also likewise to be fixed.

The schedule of age-wise depreciation as show below is applicable for the purpose of
Total Loss/ Constructive Total Loss ( TL/ CTL ) claims only. A vehicle will be
considered to be a CTL, where the aggregate cost of retrieval and/or repair of the vehicle
subject to terms and conditions of the policy exceeds 75% of the IDV.

SCHEDULE OF DEPRICIATION FOR ARRIVING ST IDV

% of Depreciation
Age of the Vehicle for fixing IDV
Not Exceeding 6 Month 5%
Exceeding 6 Month but not exceeding 1 Year 15%
Exceeding 1 Year but not exceeding 2 years 20%
Exceeding 2 Years but not exceeding 3 years 30%
Exceeding 3 Years but not exceeding 4 years 40%
Exceeding 4 Years but not exceeding 5 years 55%

The depreciation for replacement of parts in partial loss claim will be as per a separate
schedule as mentioned below:

Rate of depreciation for all rubber nylon/plastic parts, tires &

50%
tubes, batteries & air bags
Rate of depreciation for all fiber glass components 30%
Rate of depreciation for all parts made of glass Nil
As per Schedule
Rate of depreciation for all other parts including wooden parts
mentioned above

Geographical Zones
For the purpose of rating, the whole of India has divided into the following zones
depending upon the location of the office of registration of the vehicle concerned.
 1) Private Car/Motorized Two Wheelers/Commercial Vehicles- PCV upto 6
passengers

 Zone A : Ahmedabad, Bengalaru, Chennai, Hyderabad, Kolkata, Mumbai, New

Delhi & Pune

 Zone B : Rest Of India

2) Commercial Vehicles excluding PCV up to 6 passengers

 Zone A : Chennai, New Delhi, Kolkata, Mumbai

 Zone B : All State Capitals

 Zone C : Rest of India

Period of Insurance
Unless specifically stated otherwise, premiums quoted in the Schedules under various
Sections of the India Motor Tariff are the premiums payable on policies issued or
renewed for a period of twelve months. No policy is permitted to be issued or renewed
for any period longer than twelve months. It shall, however, be permissible to extend the
period of insurance under the policy for any period less than twelve months, for the
purpose of arriving at a particular renewal date or for any other reasons convenient to the
insured, by payment of the extra premium calculated on pro-rata basis, provided such
policies are renewed with the same insurer immediately after the expiry of such an
extension. All such extensions will require attachment of the following warranty to the
policy.

Cover Note
Cover Notes insuring Motor Vehicles are to be issued only in Form 52 in terms of Rule
142 Sub-Rule (1) of the Central Motor Vehicles Rules 1989. In terms of Rule 142, Sub-
Rule (2) of central Motor Vehicles Rules 1989, a Cover Note shall be valid for a period
of sixty days from the date of its issue & the insurer shall issue a policy of insurance
before the date of expiry of the Cover Note.

Cancellation of Insurance
A policy may be cancelled by the insurer by sending to the insured seven days notices of
cancellation by recorded delivery to the insured’s last known address & the insurer will
refund to the insured’s the prorate premium for the balance period of the policy.
A policy may be cancelled at the option of the insured with seven days notice of
cancellation & the insurer will be entitled to retain premium on short period scale of rates
for the period for which the cover has been iv\n existence prior to the cancellation of the
policy. The balance premium will be subject to:
 There being no claim under the policy, &
 The retain of minimum premium as specified in the Tariff.

A policy can be cancelled only after ensuring that the vehicle is insured elsewhere, at
least for Liability only after surrender of the original Certificate of the Insurance for
cancellation.
Insurer should inform the Regional Transport Authority (RTA) concerned by recorded
delivery about such cancellation of insurance.

Double Insurance

When two polices are in existence on the same vehicle with identical cover, one of the
police may be cancelled. Where one of the policies commenced at a date later than the
other policy, the policy commencing later is to be cancelled by the insurer concerned.
If a vehicle is insured at any time with two different offices of the same insurer, 100%
refund of premium of one policy may be allowed by canceling the later of two policies,
However, if the two polices are issued by the insurers, the insurer concerned & pro-rata
refund of premium thereon is to be allowed.
If however due to requirements of Bank/Financial Institutions, intimated to the insurer in
writing, the earlier dated policy is required to be cancelled, then refund of premium is to
be allowed after retaining premium at short period scale for the period the policy was in
force prior to cancellation.
In all such eventualities, the minimum premium as specified in the tariff is to be retained.
In either case, no refund of premium can be allowed for such cancellation if any claim
has arisen on either of the policies during the period when both the policies were in
operation, but prior to cancellation of one of the policies.

No Claim Bonus

NO claim bonus (NCB) can be earned only in the Own Damage section of Policies
covering all classes of vehicles but not on Motor Trade Policies ( Road Transit Risk /
Road Risk / Internal Risks) & policies which cover only Fire & / or Theft Risks. For
policies covering Liability with Fire and / or Theft components of the NCB will be
applicable only on the Fire and / or Theft components of the premium. An insured
becomes entitled to NCB only at renewal of a policy after the expiry of the full duration
of 12 months.

No Claim Bonus, wherever applicable, will be as per the following table.

% of Discount on own
All Types of Vehicles Damage Premium
No claim made or pending during the preceding full year of
20%
insurance
No claim made or pending during the preceding 2 consecutive
25%
years of Insurance
No claim made or pending during the preceding 3 consecutive
35%
years of Insurance
No claim made or pending during the preceding 4 consecutive
45%
years of Insurance
No claim made or pending during the preceding 5 consecutive
50%
years of Insurance

Sunset Clause:
If at the renewal falling due any time between 1st July 2002 & 30th June 2003, both days
inclusive, (after completion of the full policy period of 12th months) an insured becomes
entitled to an NCB of 55% or 65% in terms of the Tariff prevailing prior to 1 st July 2002,
the entitlement of such higher percentage of NCB will remain protected for all
subsequent renewals till a claim arises under the policy, in which case the NCB will
revert to ‘Nil” at the next renewal. Thereafter, NCB if any earned, will be in terms of the
above table.

The entitlement of NCB shall follow the fortune of the original insured & not the vehicles
or the policy. In the event of transfer of interest in the policy from one insured to another,
the entitlement of NCB for the new insured will be as per the transferee’s eligibility
following the transfer of interest.

The percentage of NCB earned on a vehicle owned by an institution during the period
when it was allotted to & exclusively operated by an employee if the ownership of the
vehicle is transferred in the name of the employee. This will however require submission
of a suitable letter from the employer confirming that prior to transfer of ownership of the
vehicle to the employee, it was allotted to & exclusively operated by the employee during
the period in which the NCB was earned.

In the event of the insured, transferring his insurance from one insurer tom another
insurer, the transferee insurer may allow the same rate of NCB which the insured would
have received from the previous insurer. Evidence of the insured NCB entitlement either
in the form of a renewal notice or a letter confirming the NCB entitlement from the
previous insurer will be required for this purpose.

If an insured vehicle is sold & not replaced immediately, or laid up, & the policy is not
renewed immediately after expiry, NCB, if any, may be granted on subsequent insurance,
provided such fresh insurance is effected within 3 (three) years from the expiry of the
previous insurance. The rate of NCB applicable to the fresh policy shall be that earned at
the expiry of the last 12 months period of insurance.
On production of evidence of having earned NCB abroad, an insured may be granted
NCB on a new policy taken out in India as per entitlement earned abroad, provided the
policy is taken out in India within three years of expiry of the overseas insurance policy,
subject to relevant provision of NCB under these rules.

No NCB can be allowed when a policy is not renewed within 90 days of its expiry.

Where the insured is unable to produce such evidence of NCB entitlement from the
previous insurer, the claimed NCB may be permitted after obtaining from the insured a
declaration.

Compulsory Deduction
Claims under Own Damage section of policies covering all classes of vehicles are subject
to a compulsory deductible as per the under noted table:-

TYPE OF VEHICLES

Commercial COMPULSORY DEDUCTIBLES

Goods Passenger
Vehicles (other
carrying carrying
than vehicles
Vehicles Vehicles
rate able under
Class– D, E, F Not
Not exceeding
and G of CVT) exceeding
17 passengers 500/-
7500 Kg.
GVW

Exceeding
7500 Kg. Exceeding 17
GVW but not passengers but
1000/-
exceeding not exceeding
16500 Kg. 36 passengers
GVW

Exceeding
Exceeding 36
16500 Kg. 1500/-
passengers
GVW

Vehicles rate able under Class D of the 0.5% of IDV of the vehicles subject to a
Commercial Vehicles Tariff (CVT) minimum of Rs.2000/-

Vehicles rate able under Class E, F and G of the Rs.50/- for two-wheelers and Rs.500/- for
Commercial Vehicles Tariff (CVT) others

Taxis And Three Wheelers rated as Commercial

500/-
Vehicles (Not exceeding 1500cc)

Taxis And Three Wheelers rated as Commercial

1000/-
Vehicles (Exceeding 1500cc)

Private Cars including three wheelers rated as

500/-
Private Cars (Not exceeding 1500cc)

Private Cars including three wheelers rated as

1000/-
Private Cars (Exceeding 1500cc)

Motorized Two Wheelers 50/-

Compulsory Personal Accident Cover for Owner-Driver

Compulsory Personal Accident Cover shall be applicable under both Liability only and
Package policies. The owner of insured vehicle holding an ‘effective’ driving license is
termed as Owner-Driver for the purposes of this section.

Cover is provided to the Owner-Driver whilst driving the vehicle including mounting
into/ dismounting from or traveling in the insured vehicle as a co-driver. This provision
deals with Personal Accident cover and only the registered owner in person is entitled to
the compulsory cover where he/ she holds an effective driving license. Hence compulsory
PA cover cannot be granted where a vehicle is owned by a company, a partnership firm
or a similar body corporate or where the owner-driver does not hold an effective driving
license. Where the owner-driver owns more than one vehicle, compulsory Pa cover can
be granted for only one vehicle as opted by him/ her.

The scope of the cover, Capital Sum Insured (CSI) and the annual premium payable
under this section are as under:-

TYPE OF CAPITAL SUM

PREMIUM COVER
VEHICLES INSURED

1.100% of CSI for

Motorized Two
1Lakh 50 Death, Loss of Two
Wheelers
Limbs or sight of
both eyes or one
limb and sight of
Private Car 2 Lakh 100
one eye.
Commercial 2 Lakh 100
2. 50% of CSI for
Loss of one Limb or
Vehicles
sight of one eye.

Indian Motor Tariff- Endorsement.

Extension of Geographical Area (IMT- 1)

The geographical area of motor policies may be extended to include:

a) Bangladesh.
b) Bhutan.
c) Nepal.
d) Pakistan.
e) Sri Lanka.
f) Maldives.
As the case may be, by charging a flat additional premium, as stated below for a period
not exceeding 12 months.

For Package Policy Rs.500 per vechicle, irrespective of the

class of vehicle.
For policies other than Package Policy Rs.100 per vehicle. Irrespective of
the class of vehicle.

Value policies (IMT 2):

Under an Agreed Value Policy a specified sum agreed as the insured value of the
vehicle is paid as compensation in case of the total loss/Constructive Total loss of the
vehicle without any deduction for depreciation. It is not permitted to issue agreed value
policies under this tariff excepting for policies covering vintage cars as defined under 5
above.

Transfer of Ownership (IMT 3):

On transfer of Ownership, the Liability Only Cover, either under a liability only policy
or under a package policy is deerned to have been transferred in favour of the person to
whom the motor vehicle is transferred with effect from the date of transfer. The
transferee shall apply within fourteen days from the date of transfer in writing under
recorded delivery to the insurer who has insured the vehicle, with the details of the
registration of the vehicle, the date of transfer of the vehicle, the previous owner of the
vehicle and the number and date of the insurance policy so that insure may make the
necessary changes in his record and issue fresh Certificate of insurance.

In case of Package policies, transfer of the “Own damage” section of the policy in the
favour of the transferee, shall be made by insurer only on receipts of specific request
from the transferee along with consent of the transfer. If the transferee is not entitled to
the benefit of the No. claims Bonus (NCB) shown on the policy, or is entitled to a lesser
percentage of NCB than that existing in the policy, recovery of the difference between
the transferee’s entitlement, if any, and that shown on the policy shall be made before
effecting the transfer.

A fresh proposal form duly completed is to be obtained from the transferee in respect of
both liabilities only and Package policies. Transfer of package policy in the in the name
of transferee can be done only on getting acceptable evidence of sale and a fresh proposal
form duly filled and signed. The old certificate of insurance for the vehicle, is require to
be surrounded and a fee of Rs.50/- is to be collected for issue of fresh Certificate in the
name of the transferee. If for any reason, the old certificate to that effect is to be taken
from the transferee before a new Certificate of insurance is issued.

Changes of Vehicle (IMT 4):

A vehicle insured under a policy can be substituted by another vehicle of the same class
for the balance period of the policy subject to adjustment of premium, if any, on pro- rata
basis from the date of substitution is not a total loss, evidence in support of continuation
of insurance on the substituted vehicle is required to be submitted to be insure before
such substitution can be carried out.

Vehicle Subject to Hire Purchase Agreement (IMT 5):

Policies and Certificate of insurance are to issued in the name of hirer only and issuance
in the joint names of the hirer and owner is prohibited.

Vehicle Subject to Lease Agreement (IMT 6):

Policies and certificate of insurance are to be issued in the name of lessee only and
issuance in joint names of the lessee and less or is prohibited.

Vehicle subject to Hypothecation Agreement (IMT 7):

Policies and certificates of Insurance are to be issued in the name of registered Owner
only and insurance in the joint names of the Registered Owner and pladgee is prohibited.
However, for all the three cases, the policy, the personal Accident cover for the Owner-
Driver granted under policy, the registered owner named in the policy relating to this
cover.

Optional Personal Accident Cover for person other than Owner – Driver:

The cover under this section is limited to maximum capital sum insured (CSI) of Rs.2
lacs. Per person.

Cover is available only in respect of following persons:-

1. IMT 15 :- private Cars including three wheelers rated as Private cars and
motorized two wheelers with or without side car (Not for hire or reward) : For
insured or any named person, other than the paid driver and cleaner.

2. IMT 16 :- private cars, three wheelers rated as private cars and motorized two
wheelers (Not used for hire or reward) with or without side car : For unnamed
Passengers limited to the registered carrying capacity of the vehicle other than
the insured, his paid driver and cleaner.

3. IMT 17:- In respect of all classes of vehicles: For paid drivers, cleaners and
conductors.
4. IMT 18:- Motorized two wheelers with or without side car (used for hire or
reward) for unnamed hirer/driver.

Cover for Lamps/ Tyres/Tubes/Mudgards/Bonnet/side parts/Bumpers/Head &

Tail lights/Paintwork of Damaged portions only (IMT 23):

Unlike private vehicles, coverage for the above under commercial vehicles can be
taken only on payment of additional premium@15 % of the total gross OD premium
(before application of any discount)

Electrical/ Electronic fittings (IMT 24):

If electrical and electronic items fitted to the vehicle but not included in the
manufacture’s selling price of the vehicle are to be insured. It can be done separately
under Section – I (loss of or damage to the vehicle insured) of the package policy at
an additional premium @ 4% on the value of such fittings to be specifically declared
by the insured in the proposal form and or in a letter forming part of the proposal
form.

Loss of Accessories – IMT 33 (For Motorized Two Wheelers Only)

Loss of accessories, the property of the insured, by Theft may be covered at an

additional premium @ 3% on the value of the accessories specifically declared by the
proposal/ insured in the proposal form and or in a letter forming part of the proposal
from, subject to a minimum premium of Rs.50/- for this extra benefit only.

Legal Liability to employees/ occupants/others associated with the vehicle as per

its usage:

Legal Liability of various parties associated with a vehicle as per its usage can be
covered on payment of addition premium of Rs.25 per person. Premium for each of
the following extra benefit opted for by the insured is to be shown separately in the
premium computation table.

Private Car & Motorized Two Wheeler.

I. Legal liability to paid drivers/and/or cleaner employed in connection with

the operation and/or maintained of motor vehicle under the Workmen’s
Compensation Act, Fatal Accident Act and at common Law – IMT 29.

II. Legal liability to employees of the insured traveling in and/or driving the
employer’s vehicle-IMT 29.
 Commercial Vehicle.

1. IMT -37 : Legal Liability for accidents to Non fare paying passengers
including employees of the Insured who are not “Workmen” under the WC
Act : Additional premium is to be collected in respect of such passengers as
follows:

a. For goods carrying Commercial Vehicles Rs.75/- per person

b. For Passenger Carrying Commercial Vehicle Rs.125/- per Passenger.

2. IMT -39: Legal Liability to person employed in connection with the

operation &/or maintenance &/or loading &/or unloading of the insured
goods carrying vehicle ( incl Tractors and other class D miscellaneous vehicle)

3. IMT -40 : legal liability to paid Driver &/or Conductor &/or cleaner
employed in connection with the operation &/or maintained &/or loading
&/or unloading of the insured goods carrying vehicle (inc Tractors and other
Class D miscellaneous vehicle)

Miscellaneous & Special Type of vehicle.

IMT -46 : The liability for accidents to passengers carried for hire or reward in the
Ambulances/Hearses are to be covered by charging an additional premium per
passenger as indicated below. This premium is in addition to the premium applicable
for “Liability Only” Cover shown under this tariff.

Ambulances Rs.60/- per passenger

Hearses Rs.115/- per passenger

IMT 47: Package policies issued to the following mobile units can be extended to cover
damage to the unit by overturning during operational use as a tool of trade at an
additional rate of 0.5% of IDV of the vehicle subject to a minimum additional premium
of Rs.100/-

a) Mobile Cranes
b) Mechanical Navies, Shovels, Grabs, Rippers and Excavators.
c) Dragline Excavators
d) Mobile Drilling Rigs
e) Mobile Plant.

List of miscellaneous & Special Types of Vehicle as defined under TAC.

Agriculture Tractors Gritting Machines Road Rollers

Ambulance Hearses Road Scrapping, Surfacing
& Pre- Mix Laying
Equipment road sweepers
Angle Dozers
Anti Malarial vans Lawn Mowers Road Sprinklers used also
as fire fighting vehicles.
Breakdown Vehicle Ladder Carrier Carts Scrapers
Bulldozers, Levellers Scientific Vans
Bull graders
Cinema Film Recording and Letourna Dozers Sheep Foot Tamping Roller
Publicity Vans
Clark Tractor Elevators Mechanical Navvies, Shovels.
Shovels, Grabs and
Excavators
Compressors Military Tea Vans Site clearing and Levelling
Plant.
Cranes Milk Vans (Insulated) Spraying Plant
Delivery Tracks Pedestrian Mobile Plant Tankers
Controlled
Dispensaries Mobile Shops and canteens Tar Sprayers (Self
Propelled)
Dragline Excavators Mobile Surgeries and Tippers
Dispensaries
Drilling Rigs Oil & Petrol Transport Tower Wagons
Vehicles
Dumpers Plane Loaders & Other Traction Engines Tractors
Vehicle
Dust carts Water Carts Prison Vans Trial Builders, Tree Dozers
Road Sweeper Electronic Trolley’s & goods carrying
trolleys or Tractors. Refrigeration/Pre-cooling tractors.
Unit
Electronic Driven goods Rippers Footpath Rollers
Vehicle
Excavators Fire bridge and salvage Fork lifts Trucks.
corps vehicle.

In addition to the above, the TAC provides for insurance of the following motor risks:

1. Motor Trade: Road Transit.

2. Motor Trade: Road Risks.

3. Motor Trade: Internal Risks.

Rating Parameters:

Private Commercial- GCV Commercial – PCV Commercial- PCV

Car/Motorized Two with LCC less than with LCC more than
Wheelers 6 passengers 6 passengers
Insured Declared Insured Declared Insured Declared Insured Declared
value value value
Cubic Capacity Gross Vehicle Cubic Capacity Licensed carrying
Weight Capacity
Geographical Zone Geographical Zone Geographical Zone Geographical Zone
Age- Year of Age- Year of Age- Year of Age- Year of
Manufacture Manufacture Manufacture Manufacture

Health Insurance.

The term “Health Insurance” is generally used to describe a form of insurance that pays
for medical expenses. It is sometimes used more broadly to include insurance covering
disability or long-term nursing or custodial care needs. It may be provided through a
government – sponsored social insurance program, or from private insurance companies.
It may be purchased on a group basis (e.g. by a firm to cover its employees) or purchased
by individual consumers. In each case, the covered groups or individuals pay premium or
taxes to help protect themselves from high or unexpected healthcare expenses.

Variants
Mediclaim Insurance:

This policy covers hospitalization and domicillry hospitalization expenses incurred by the
insured (including family members) for illness/ disease or accidental injury and shall
include hospital charges (room & boarding and operation theatre), fees of surgeon,
anesthetist, nurses, cost of medicine, oxygen, blood, cost of appliance like pacemaker,
artificial limbs and cost of organs.

Critical Illness Insurance.

Critical Illness Insurance provides for payment of amount equal to sum assured, if illness
strikes, irrespective of expenses incurred on treatment. Most insurance companies are
providing this insurance as an addition to life insurance; additional premium payable for
critical illness. It is introduced as a value addition to meet the demands and also as
marketing strategy. The insurance covers surgery cost, critical illness cover and post-
hospitalization. The insurance is different in paying only for prolonged hospitalization.
One of the unique features of the insurance is that a lump is that a lump sum allowance
paid irrespective of the actual medical expenses.

Personal Accident Insurance:

The policy covers physical loss to an individual due to an accidental injury (including
fatal). The policy pays for death or disablement from accidental bodily injury happening
anywhere in the world. When an accidental injury being the sole and direct cause results
(within 12 calendar months) in death or disability the compensation under the policy
would be as per table of benefit given below:
  Table A – Death – 100% of capital Sum insured (CSI)

 Table B – Permanent Total Disablement (Loss of two limbs/loss of one limb or

one eye )- 100% of CSI

 Table C – Permanent partial Disablement varies from 1% to 75 % of CSI as per

policy.

 Table D – Temporary total disablement 1% of CSI per week, subject to a

maximum of Rs.5, 000 per week for a maximum period of 100 weeks.

Medical Expenses Extension:

This policy can be extended to cover actual medical expenses arising out of the accident
up to an amount not exceeding 40 % of the compensation paid in settlement of a valid
claim under this policy or 20% of the relevant CSI whichever is less, on payment of 20%
of extra premium.

Education Grant:
In the event of death or permanent total disablement of the primary insured due to
accident, the policy pays as education grant for the dependent children as below:

a) if the insured has one dependent child below the age of 25 years, an amount equal
to 10% of the CSI subject to maximum of
Rs. 5,000/-

b) if the insured has more than one dependent child below the age of 25 years, an
amount equal to 10% of the CSI subject to maximum of Rs.10,000/- irrespective
of number of dependent children.

Carriage of dead body:

In the event of death of the insured person due to accident outside his/her residence, the
Company in addition to the CSI payable under the policy, also pays for transportation of
insured person’s dead body to the place of residence a lump sum of 2% of CSI or
Rs.2,500/- whichever is less.

Premium Rating:
Rating is done on the basis of the occupation of the insured as follows:

 Risk Group I :
 Accountants, Doctors, Lawyers, Architects, Consulting Engineers, Teachers,
Bankers, and Persons engaged in administrative functions, Persons primarily
engaged in occupations similar hazard.

 Risk Group II :

Builders, contractors and Engineers engaged in superintending functions only.

Veterinary Doctors, paid drivers of motors cars and light motor vehicles and
persons engaged in occupations of similar hazard and not engaged in manual
labour. All persons engaged in manual labour (Except those falling under group
III)cash carrying Employees, garage and motor machines, machine operators,
Drivers of truck or lorries and other heavy vehicles, professional Athletics and
Sportsmen, Woodworking Machinists and person engaged in occupations of
similar hazard.

Risk Group III:

Person working in underground mines, explosives, magazines, workers involved

in electrical installation with high tension supply, Jockeys, Circus personnel,
Persons engaged in activities like racing on wheels or horseback, big game
hunting, mountaineering, winter sports, skiing, ice hockey, ballooning, hand
gliding, river rafting, polo and persons engaged in occupations/ activities of the
similar hazard.

Package policies

With the development of the insurance industry and on the basis of the growing
needs of the people, the insurers have designed and customized various ‘Package
Policies’ as per individual requirement.
The following are some of the popular and widely accepted Package policies:

Householders Package.

This is a package policy of various sections which covers a proposal’s

household/domestic property including items of property therein for which the
proposer is accountable and legal liability, if any, incurred in relation thereto.

Scope of Cover:
Section I – Fire & Allied Perils.

 Sub – section I A of the policy covers buildings (i.e. the structure wherein the
house of the proposer is located) against fire and allied perils. The section also
 covers earthquake (Fire and Shock) risks additionally. The basis of the valuation
shall be on reinstatement value or market value or market value, as opted by the
proposer.

 Sub –Section I B of the policy covers items of the property in the proposal’s
house including items of property for which the proposer is accountable, against
fire and allied perils including earthquake (Fire and shock). The basis of valuation
in respect of contents shall be on reinstatement value or market value, as opted by
proposer.

 Items declared under section V, VI and IX of the policy i.e. electronic appliances,
Television etc and pedal cycle need not be covered under this sub- section.

 Terrorism cover is optional under this section.

Section II – Burglary & Housebreaking.

This section covers.

a) Contents being items of property in the proposal’s house including items of

property therein for which the proposer is accountable, against burglary,
housekeeping, larceny and theft. The basis of valuation in respect of content shall
be on reinstatement value or market value, as opted by the proposer.

b) Damage to the proposal’s house and /or safe resulting from burglary and/ or
housebreaking or any attempt thereat, subject to a maximum of 5% of the sum
insured under this section.

Section III – All Risks (Jwellery & Valuable)

This section covers jwellery and valuable against loss or damage by accident or
misfortune whilst anywhere in India subject to liability of the company in respect of any
one item in any one period of insurance not exceeding the sum insured set against such
items and not exceeding in the aggregagate the total sum insured under this section of the
policy. It is essential that area Offices collect list of articles, with individual description,
weight (in case of jwellery) and value, proposed for coverage under this section.

Section IV – Domestic Mechanical & Electrical Appliance.

This section covets all domestic electrical and mechanical appliances, apparatus or
gadgets and / or any mechanical or electrical installation while contained or fixed in the
purpose’s house against loss or damage due to unforeseen and sudden accidental physical
damage caused by and/ or solely due to mechanical and/ or electrical breakdown. The
sum insured will be equal to the current new replacement cost including ordinary freight,
customs duty, other dues, if any, and erection cost (CNRV basis). Complete particulars
about the various items proposed for coverage – viz make, year of make, Description,
Serial Number, model etc. Shall be collected at the time of acceptance of the proposal
itself and incorporated in the policy.

Section V – Domestic Electronic Appliance.

This section covers personal computers (Including accessories and printer), other
domestic electronic appliances and / or any electronic installation while contained or
fixed in the proposal’s house. The sum insured in respect of each item for coverage under
this section shall be equal to the cost of replacement of such item by a new item of the
same kind and capacity which shall mean its current new replacement cost including
ordinary freight, customs duty, other dues, if any, and erection cost (CNRV basis).
Complete particulars about the various items proposed for coverage- viz make, year of
make, description, serial number, model etc. Shall be collected at the time of acceptance
of the proposal itself and incorporated in the policy.

Section VI – Television Set.

1. this section covers loss or damage to television set, accessories forming part of the
set and antenna (collectively referred to as
“Television Apparatus” whilst contained or fixed in the house of the proposed by:

a) Fire, lighting, explosion of gas in domestic appliances.

b) Busting and overflowing of water tanks, apparatus or pipes.

c) Aircraft or articles dropped there from.

d) Earthquake (Fire and/ or shock.)

e) Flood, inundation, typhoon, storm, tempest, hurricane, tornado and cyclone.

f) Riot, strike, terrorism or malicious act.

g) Burglary and/or house breaking or theft.

h) Accidental external means.

i) Mechanical or electrical means.

2. This section further covers damage to property belonging to or in the custody or

control of the proposer caused by breakage or collapse of the antenna fitting or
 must forming part of the television apparatus in so far as such property is not
otherwise insured.

3. this section also covers legal liability to pay compensation and litigation expenses
incurred by the proposer with the company’s written consent in respect of
accidental death of or bodily injury to any person other than a member of the
proposal’s service and accidental damage to property not belonging to or in the
custody or control of the proposer or any member or thepeoposer’s family or
person in the proposal’s service arising out of accident happening through or in
connection with the television set or to breakdown or defect in the Television
Apparatus or breaking or collapse of the internal fitting or mast forming part of
the television apparatus.
In addition to accidental damage and mechanical and electrical breakdown, this
section covers loss or damage due to fire group of perils including earthquake,
burglary, housebreaking, theft. Complete particulars about the various items
proposed for coverage- Viz. make, year of make, Description, serial number,
Model etc. Shall be collected at the time of acceptance of the proposal itself and
incorporated in the policy.

Section VII – Fixed Plate Glass.

This section covers loss or damage due to accidental breakage of
a) Fixed plate glass.
b) Frames or framework.
c) Lettering consequent upon the breakage of glass.

The sum insured shall be on reinstatement value basis. The liability of the
company in respect of any one loss or all losses in any one period of insurance
is limited to the sum insured set against each items of property in the schedule
to the policy.

Section VIII – Baggage.

This section covers loss of, destruction or damage to personal baggage of
proposal and /or family members who are permanently residing with the proposer
due to accident or misfortune during any journey undertaken in India whilst on
tour on holidays outside the city, town or municipal limits of the place where the
proposal’s house is situated. “Baggage’ shall mean and include personal articles
and belonging necessary for the journey undertaken and articles or things
acquired during the journey.

Section IX – Pedal Cycle.

The section covers loss of or damage to pedal cycles belonging to the proposal or
any member of the proposal’s family who is permanently residing with the
proposer by:
 1) Fire, lighting or external explosion.
2) Riot, strike, terrorism or malicious act.
3) Burglary and /or house breaking or theft.

Marine Insurance – Cargo:

A marine cargo policy covers loss or damage to cargo in relation to and in connection
with its carriage by :
1-Land ( whether by motor vehicle or by railway )
2- Waterway ( that is to say by ship which includes every description of Vessel used in
navigation )
3- Air ( that is to say by aircraft used for the transport of cargo, among others )

Cargo means any movable , tangible property ,animates or inanimate,and including

money , valuable securities and other documents. The policy provides cover against loss
or damage to cargo during the transit from from one place to another by any one or more
aforesaid modes of transport on strict liability basis, that is to say , whether or not fault or
negligence on the part of the carrier is provided.

Now a days a considerable amount of cargo is hypothecated/ mortgaged to banks and

other financial institutions,which obviously require insurance as collateral security and
marine cargo policies are obligatory in most of the transactions.

A contract of sale involves mainly a seller and buyer, apart from other associated parties
like carriers, banks , clearing agents etc. the question as to who is responsible for
effecting insurance on the goods which are the subject for sale,depends on the terms of
the sale contract.

Types of principal contracts in Marine Insurance :

1-Free on Board ( FOB ) : The seller is responsible till the goods are placed on board the
steamer. The buyer is responsible thereafter. He can get the insurance done wherever he
likes.
2- Free on Rail ( FOR ) : The provisions are the same as in above.This is mainly relevant
to internal transactions.
3- Cost and Freight ( C&F ): The buyer is responsible once the goods are placed on
board.
4- Cost, Insurance andFreight ( CIF): The seller is responsible for arranging the
insurance.

Marine Polices :

For export/import policies the institute cargo clauses (ICC) are used. These clauses are
drafted by the Institute of London underwriters and are used in insurance companies in a
majority of countries including India. For inland transit Local clauses are used.

Institute Cargo Clauses (C ):

Details of the risk Covers are given below:

1-fire or explosion
2-Vessel or craft being stranded,grounded,sunk or capsized
3-overturning or derailment of land conveyance
4- Collision or contract of vessel ,craft or conveyance with any external object other than
water
5- Discharge of cargo at a port of Distress
6- general Average Sacrifice
7-Jettision
Institute Cargo Clauses (B ):
This clause provides cover as under ICC (C ) plus the following additional risk are
covered.
1-Earthquake, Volcanic eruptionor Lighting
2-Washing overboard
3- Entry of Sea, lake or river water into vessel, craft ,hold,convenyance,container,liftvan
or place of storage
4- Total loss of any package lost overboard or dropped whilst loading on to or unloading
from vessel or craft.

Cargo is also subject to many other risk which are known as extraneous risks.These risk
which can be added to ICC (B) on Payment of extra Premium are:
1-Theft , Pilferage and /or non delivery
2- Fresh water and rainwater damage
3-Hook and/or oil Damage
4- Heating and sweating
5-Damage by Mud,Acid and other extraneous substances
6-Breakage
7-Leakage
8-Country Damage
9- Bursting /tearing of bags
Institute Cargo Clauses (A ):
This clause provides cover for all risks of loss or damage to the subject matter insured.
The term all risk means losses which are caused by accidental circumstances only. Under
ICC ( C ) and ( B) the risk covered are specified ,Under A clauses the risks covered are
not specified and all risk are covered.

General Exclusion :
1-Loss caused by wilful misconduct of the insured
2-Ordinary Leakage,Wear and Tear etc
3-Loss caused by inherent vice or nature of the subject matter
4- Loss caused by delay even though the delay be caused by an insured risk.
5-Loss or damage due to inadequate packaging
6-War and kindred perils (can be coverd paying Extra Premium )
7- strikes,riots,luck out ,civil commotion and terrorism( can be coverd paying Extra
Premium ) .
8- loss arising from insolvency or financial default of owners,operators etc. of the vessel.
This is not an accidental loss. The insured has to be cautious in selecting the vessel for
shipment.
9- Deliberate damage by the wrongful act of any person. This is called malicious damage
and can be covered at extra prem. Under B And C clauses. Under A this is automatically
covered.

Institute Cargo Clauses (Air ):

( Excluding sending by post )

The risk coverd are all risks of loss or damages and the exclusions are more or less the
same as under ICC ( A ) clauses.
The duration of Cover is the same as under ICC ( A ) except that the period of cover after
unloading of cargo from the aircraft at the final place of discharge is limited to 30 days (
as against 60 days under the ICC (A ) war and SRCC risk can be covered at extra Prem.

Inland Transit ( Rail/ Road ) Clause: ITC ( C ):

Risks covered :
Risks of Physical loss/ damage caused by Fire and Lighting

Inland Transit ( Rail/ Road ) Clause: ITC ( B):

Risks Covered:
Physical loss or damage to the loss of Goods to the insured goods by
Fire,lighting,breakage of Bridges,coillsion with or by the carrying veicle,overturning of
the carrying vehicle,derailment or accidents of like nature to the carrying railway
wagon/vehicle.
Extraneous risk like theft,pilferage,non-delivery etc can be added to the cover at the extra
prem. SRCC risks can also be added.

Inland Transit ( Rail/ Road ) Clause: ITC ( A):

Risks covered: All risks of loss or damage to the insured goods.

General Exclusion :
1-Loss caused by wilful misconduct of the insured
2-Ordinary Leakage,Wear and Tear etc
3-Loss caused by inherent vice or nature of the subject matter
4- Loss caused by delay even though the delay be caused by an insured risk.
5-Loss or damage due to inadequate packaging
6-War and kindred perils (can be coverd paying Extra Premium )
7- strikes,riots,luck out ,civil commotion and terrorism( can be coverd paying Extra
Premium ) .
8- loss arising from insolvency or financial default of owners,operators etc. of the vessel.
This is not an accidental loss. The insured has to be cautious in selecting the vessel for
shipment.
9- Deliberate damage by the wrongful act of any person. This is called malicious damage
and can be covered at extra prem. Under B And C clauses. Under A this is automatically
covered.

Type of Marine Policies :

Specific Policy :

A specific policy covers policy a particular risk proposed by the an insured with specific
reference to an individual proposal.

Open policy :

At the request of commercial firms and industrial establishments with substantial volume
of trade and a number of transactions, an open policy would be issued for ensuring
automatic insurance protection. In such policies the insurance is described in general
terms and the insured is required to provide other particulars of cargo,carriers etc. by
subsequent declarations. An open policy is issued usually for one year for a sum insured
representing aggregate of dispatches likely to take place during the policy period. Prem is
collected in advance and declarations made by the insured are duly recorded and
accounted, diminishing the estimated sum insured under the policy. The open policy
ceases to operate upon the expiry of the policy period, or on exhaustion of the sum
insured under the policy, whichever shall first occur. If the periodical declarations made
by the insured exhaust the sum insured before the actual expiry of the policy period the
sum insured can be increased by suitable amount.

Open Cover :
This is an arrangement similar to open policy to cover loss or damage to cargo in
accordance with an agreement and deposit of money to be made by the insured with
respect to payment of prem. An open cover is not a stamped document and the insurer
will issue a specific policy under the agreement as and when the insured provides the
requisite details with respect to the vessel, cargo etc. along with the prem.

A marine cargo policy also provide for cover in respect of customs duty and /or increased
value. Marine cargo policies can also be issued on a special declaration basis and an
annual policy basis. Under a special declaration policy the prem. On the estimated annual
turnover would be collected right at the inception of the policy period and as the entire
prem. Is paid in advance, suitable discounts are given with regard to prem based on the
turnover. Declarations can be made even once in 3 months. An annual policy is normally
issued to manufacturers to cover inter depot movements and the prem. Is charged on
value at risk at any one point of time, irrespective of the turnover.

Basis of Valuation :

Cargo for insurance purposes would be on the following basis:

Cost of Cargo + Freight + Insurance ( CIF ) + 15% of CIF towards the incidential
charges.
Sum insured for customs duty shall be the actual duty payable. For insurance of increased
value cargo, the sum insured shall be an amount not exceeding the difference between the
market value at the destination and the CIF + duty, provided such increased value does
not exceed 100% of CIF value of cargo Insured.

Premium payable for the policy is determined by the company from time to time having
regards to : nature of cargo, mode of conveyance, nature of packaging, Risks to be
covered, destination and past experience with respect to claims under any policies.

Industrial All Risk

This is a package policy of various sections available to small and medium size business
houses with manufacturing / industrial risks having sum insured upto 100 crores.

Scope of Cover :
Section I – Fire and Allied Perils
Section II- Fire Loss of Profit
Section III- Machinery Breakdown
This section covers all electrical and / or mechanical appliances,apparatus,gadgets
and/or any electrical or mechanical installation pertaining to the business while contained
or fixed in the proposer’s business premises against loss or damage due to unforeseen and
sudden accidental physical damage caused by and /or solely due to mechanical and/or
electrical breakdown. The sum insured in respect of each item for coverage under this
section shall be equal to the cost of replacement of such item by a new item of the same
kind and capacity which shall mean its current new replacement cost including ordinary
freight,custom duty, other dues,if any and cost of eraction ( CNRV basis ).

Section IV- Electronic equipments/appliances

Section V- Burglary & Housebeaking
Section VI- Money Insurance
Section VII- Goods in Transit
This section covers all transit of goods consisting of raw material, finished goods, semi
finished goods, spares, consumables etc. It covers transit of raw material etc. into the
premises and transit of finished goods out of the premises i.e inland transit ( inward and
outward), imports and exports. This section covers loss or damage to the insured’s cargo
in transit against all risk except those specifically excluded under the applicable clauses
and relevant warranties attached and subject to per bottom limit not exceeding Rs 5
crores. Other modes of transport of transit such as registered post, courier can be covered
subject to specific request in advance. Similarly, duty insurance on import , excise duty
exemption for export and duty draw back on exports can covered on specific request
under the relevant clauses. FOB extension can be given for inland outward consignments
on specific request. Premium under the policy will be calculated on the total sum insured
/turnover.

Section VIII- Personal Accident

Section IX – Infidelity / Dishonesty of employees
Section X – Legal Liability
Sub Section X A – Towards employees
Section X B – Towards Third Parties.

Machinery Breakdown Insurance.

This policy covers various types of machinery, plant and equipment

(machinery/electrical breakdown. Any type of installed machinery can be covered under
this policy. The insured has an option to insure/cover only selected equipment. This
policy covers the insured machinery, plant and equipment while at work/rest, being
dismantled or removed or re-erected, if performed in the same premises including
damage to electrical machinery due to fire originating within itself. It covers loss or
damage due to faulty operation, adjustment, casting, vibrating, and entry of foreign
objects, loosening of parts, self-heating, centrifugal force, and short circuit. The policy
can be insured either by the owner or by the financiers of the machinery.
The policy pays as follows:

 Partial loss: Full cost of parts plus the labor charges, to and fro freight, customs
duty and charges for dismantling and re-erection.Excess applicable to the affected
items is deducted from claim. Depreciation is items with limited life.

 Total Loss: Actual value of items immediately before the occurrence of loss. If
under insured, claim is paid only on proportionate basis.

Addon Covers:

 Escalation up to 25% of sum insured.

 Express freight, overtime and holiday rates of wages.
 Air freight.
 Owners surrounding property.
 Third party liability.
 Additional customs duty.

Boiler and Pressure Plant Insurance.

Under this policy various type of boilers, pressure vessels, machinery or apparatus in
which steam is generated /pressure is used can be covered.

Coverage:

The cover provided under this policy is towards damages caused by an explosion or
collapse. The policy can be extended to cover the damages to the insured’s surrounding
property and third party legal liability arising out of explosion or collapse.

Basis of indemnity:
In case of damage, which can be repaired, necessary repair charges, cost of dismantling
and re-erection incurred for the purpose, cost of materials and ordinary freight are
payable. In case of the loss, settlement will be based on actual value immediately before
loss less salvage plus ordinary freight cost of erection.

Electronic Equipment Insurance.

The policy covers electronic equipment like computers, CNC machinery and Medical
Diagnostic Equipment. The coverage is available under three sections.

 Material Damage (Equipment)

 External data media including information stored thereon and
 Increased cost of working.

The policy offers coverage against unforeseen and sudden physical loss or damage from
fire and allied perils, breakdown, short circuiting etc. The policy can be issued to the
owner of the equipment. Interest of any financier may be protected by issuing a policy in
the joint names.

The basis of indemnity under various sections is as follows:

Section 1: Partial loss: Actual expenses incurred to restore the damaged equipment to its
former state cost of dismantling, re-erection, ordinary freight, duty (Depreciation only on
parts with limited life.)

Total Loss: Actual value of the equipment immediately before the loss plus ordinary
freight.

Erection charges, duty in both the cases, there will be deduction towards salvage, under –
insurance and excess.

Section 2: Expenses incurred within 12 months from the date of occurrence of loss and
strictly necessary for restoring the issued data media to pre-accident condition.

Section 3: All additional costs incurred to ensure continued data processing of substitute
equipment not exceeding the limit of indemnity opted.

Contractor’s all risk Insurance.

This policy offers a continuous cover for civil engineering projects i.e. the projects where
the value of civil works is more than 50% of the total contract value. The cover operates
during storage, erection/construction till the completion and handing over of the works to
the principal. This policy is continuous comprehensive cover offering protection to the
insured in any contingency during construction period. The cover available for loss or
damage to the property insured against sudden and unforeseen causes. In the case of total
loss, settlement will be actual value immediately before loss less salvage. The policy also
reimburses insured’s legal liability to third party apart from material damage cover.

Add – on covers.

1. Breakage of glass.
2. Storage Risks at Fabricators premises/workshop.
 3. Site located in EQ Zones I & II
4. Express freight, Holiday & Overtime rate for wages.
5. Air freight, additional customs Duty.
6. Clearance & Removal of debris.
7. Third party liability, Surrounding property
8. Escalation.
9. Construction plant & machinery
10. Maintenance visit and extended maintenance.

Erection All Risks Insurance.

This policy offers a continuous cover for various projects starting from the time the
consignments leave the warehouse till they are received and erected at the site. It operates
during transit, storage, erection, completion of erection, testing and commissioning.
This policy is continuous comprehensive cover offering protection to the insured in any
contingency during erection period. The cover is available for loss or damage to the
property insured, against sudden and unforeseen causes. In case of repair and
replacements, the settlement is based on production of bills. In the case of total loss,
settlement will be actual value immediately before loss less salvage. The policy also
reimburses insured’s legal liability to third party apart from material damage cover.

Add – on covers.

1. Express freight, air freight, additional customs duty, testing period extensions.
2. Contractor’s plant and Machinery equipment up to sum insured of Rs.25 lakhs or
5% of Ear/SCE sum insured whichever is lower.
3. Storages risk at the fabricators premises/workshop.
4. Expenses towards clearance and removal of debris.
5. Cross liability, Civil works, surrounding property coverage.
6. Escalation upto 50% of Ear/Sce sum insured
7. Earthquake.
8. Damages during maintenance period.
9. Liability of principals, contractors as well as subcontractors.
10. Transit of project materials from suppliers to the site, additional transits to/from
fabricators, makes this cover seamless.

Contractor’s Plant & Machinery.

This policy offers comprehensive cover for various types of contraction plant and
machinery used at contraction sites. Some of the machinery which can be insured under
this policy is cranes, excavators, road rollers, bulldozers etc.

Coverage:
This policy affords protection to the insured against sudden and unforeseen physical
damage to the machinery insured by any causes not specifically excluded. The policy can
be given only after the successful commissioning of the machinery and applies to the
insured items whether they are at work or at rest or being dismantled for cleaning and
overhauling.

Basis of indemnity:
In case of damages which can be repaired, necessary repair charges plus cost of
dismantling and re-eraction incurred for the purpose and cost of materials and ordinary
freight.
In the case of total loss, settlement will be based on actual value immediately before loss
less salvage plus ordinary freight. The policy also reimburses insured’s legal liability to
third party apart from material damage cover.

Add – on cover.
1. Owner’s surrounding policy
2. Clearance and removal of debris
3. Additional customs duty
4. Express freight
5. Dismantling and shifting to a new location
6. Escalation
7. Earthquake.

Money Insurance.

This policy covers “Money” carried by the insured or the authorized messengers of
the insured while in transit from the time it is taken out till received at the destination
– points of the origin and destination being specified before hand. Undisturbed
money retained in a burglar- resistant safe against burglary –risks is also covered.

Money shall mean and include cash, bank drafts, Currency notes, Treasury notes,
cheques, postal Orders and current postage stamps.

Bank shall mean and include bank of every description, post office and Government
Treasury.

Money in Transit shall mean

(a) Money for, the payment of wages, salaries & other earnings or for petty cash, in
direct transit from the bank to insured’s premises from the time the money is
received from the bank by the insured or the authorized employees of the insured
until delivered at the premises or other place of the disbursement and whilst there
until paid out provided that out of business hours, such money shall be secured in
locked safe or locked strong rooms on the premises. Cheques drawn by the
insured to provide for such money are also covered whilst in transit from the
premises to the bank.
 (b) Money (Other than described in (a) above) in personal custody of the insured
or the authorized employees of the insured whilst in transit from/to insured’s
premises /bank/P. O/any other specified premises.

(c) Money (Other than described in items (a) & (b) above) collected by and in the
personal custody of the insured or the authorized employees of the insured whilst
in transit to the premises or bank within a period not exceeding 48 hours from the
insured’s premises outside business hours.

Money in safe shall mean money (other than described in section III (a) above)
whilst on the premises during the business hours or whilst secured in locked safes or
locked strong room on the insured’s premises outside business hours.

Scope of cover.
The policy indemnifies the insured against

 Loss of money in transit, defined above, by the insured or the insured’s

authorized employees, occasioned by Robbery, Theft or any other fortuitous
cause.

 Loss of money in safe, defined above, by Burglary, Housebreaking, Robbery

or hold –up, provided always that the limit of the Company’s liability for any
day loss shall in so case exceeds the amount specified against any respective
section in the said schedule.
Portable Electronic Equipment Insurance.

The policy covers portable electronic equipment like laptop, digital cameras, mobile
phone and other similar equipments.

Scope of Cover

The policy covers physical loss of or damage from any causes, other than those
specifically excluded under the policy subject to the excess specified under the policy.

Basis of Sum Insured

Sum insured shall be equal to the cost of replacement of the insured property by new
property of the same kind and same capacity, which shall mean its replacement cost
including freight, dues and customs duties, and assembling costs, if any.

Burglary & Housebreaking Insurance

This policy covers property continued in business premises, stocks owned, or for which
insured is responsible or held in trust and/ or commission. It also covers cash, valuables,
securities kept in a locked safe or cash box in locked steel cupboard on specific request.
Scope of cover

It covers the property against loss/damage by burglary /House breaking. It also covers
damage to premises caused by burglars during burglary or attemeds at burglary. The
policy pays actual loss/damage to the insured property caused by burglary/house breaking
subject to limit of sum insured. If sum insured is not adequate, policy pays only
proportionate loss. There is also provision in the policy to cover bulk items on ‘first loss’
basis wherein a percentage of total stock stored can be taken as that exposed to the risk of
burglary and housebreaking. The premium is charged on this percentage selected only. A
nominal premium is charged on the balanced stock. The policy can be extended to cover
Riot, Straike malicious damage, Terrism and Theft. Further policies can be issued on
declaration basis and floater basis for stocks.

Overseas travel Insurance.

Overseas Travel care is casters to the long felt need of the Insdian insurance market for
an innovative and comprehensive travel policy. This policy for persons undertaking
overseas travel. The policy provides cover for emergency medical expenses incurred in
relation to bodily injury, sickness, diseases or death outside the Republic of India. And
for repatriation of the Insured person during the period of insurance. It also provides for
personal accident and other travel related losses such as loss of checked baggage,
passport.

Scope of Cover
Emergency Medical Expenses.

The policy covers, up to the limit of the sum insured, your emergency medical expenses,
reasonably and necessarily incurred outside the republic India for bodily injury, sickness,
disease or death during the period of insurance. In addition, if the Third Party adminastror
recommends your continued treatment on return to India, your medical expenses incurred
in India for treatment up to 30 days following the first manifestation abroad of the bodily
injury ,sickness or diseases will also be payable subject to the policy terms and
conditions. The sum insured under this Section ranges from US$50,000 to US$ 5, 00,000
(US$50,000, US$100, 000, US$250,000 and US$500,000) the cover is subject to a
deductible of US$50.

Dental care Expenses.

The policy covers the dental expenses, if any, incurred by you towards acute anesthetic
treatment of a natural tooth or teeth. The limit of sum insured here is US$200, subject to
a deductible of US$50. Where you require dental care as a result of an unfortunate
accident/illness, we pay for the same as emergency medical expenses subject to the
policy terms and conditions.

Transportation
The policy also reimburse the extra costs of medically necessary and prescribed
transportation of the insured person to

(a) His/her permanent place of residence in India.

(b) The nearest hospital in the event that it is not possible to guarantee adequate
medical treatment within a responsible distance of the Insured Person’s current
location and consequently his health would be in jeopardy. It also pays for the
additional extra costs for an accompanying person if it is medically necessary that
the insured person be accompanied in this way; this might be a physician, nurse,
relative, friend or colleague.

In the unfortunate event of the death of the Insured Person, we shall also reimburse
the extra cost of transporting the mortal remains of the deceases back home or the
extra costs required for burial at the place of death abroad.
Total loss of checked baggage

Under this section, the policy pays compensation for the total loss of checked
baggage caused by carrier (i.e. airline, coach, operator, Ferry Company etc.) subject
to a limit of sum insured of US$1,000 per policy.

Loss of Passport

Under this section, the policy reimburses you the actual expenses necessary and
reasonably incurred by you. In the event of loss of passport for obtaining a duplicate
passport. The limit of sum insured is US$150 with a ductable of US$30.

Personal Accident.

Under this cover, the policy pays you compensation subject to the limit of sum
insured, in the unfortunate event of your sustaining bodily injury during the foreign
trip caused, solely and directly, by accidental, external, violet and visible means. Such
bodily injury should be within 12 months of the date of the injury and should be the
sole and direct cause of death or loss eyes or limbs or other permanent partial
disability.

Personal Liability.

The policy compensates in case you in you in private capacity become legally liable
to pay for accidental bodily injury to third parties or for accidental damage to third
party properties during the foreign trip.

Types of covers available.

The following types of policies are available:

Short term policy is designed for all your short duration travel up to a maximum of
180 days per trip.
 Annual Cover – Groups.

This cover is designed where you are frequent traveler for business purpose. You may
also include your spouse for coverage under this cover. Any number of the foreign
trips undertaken by you during the period of insurance is covered. However, your
maximum number of days in any trip should not be more than 30/45 days.
Based on destination of travel, the cover is classified into the following two plans:

For worldwide travel excluding USA/Canada.

For worldwide travel including USA/Canada.

Farmer Package.

this is a package policy of various sections which covers a farmer’s building and household
items therein including those for which he may be accountable, agricultural implements, stock
of farm produce and legal liability, if any, incurred in relation thereto.

Scope of Cover.

Section I: Building, Contents and other items.

This section covers the building of the farmer (of standard construction only), household items
(excluding jewellery and valuables) including those for which he may be accountable,
agricultural implements and stock of farm produce (grain and/or seeds of all kinds) against loss
or damage due to

(a) Fire and allied perils including lighting, explosion of gas in domestic appliance.

(b) Earthquake (Fire and or shock) subsidence and landside (including rockslide)
damage.

(c) Flood, induction, strom, tempest, typhoon, hurricane, tornado or cyclone.

(d) Bursting and overflowing of water tanks, apparatus or pipes.

(e) Aircraft or articles dropped there from.

(f) Riot, strike or malicious act.

(g) Impact Damage.

(h) Burglary, housebreaking including theft save where any member of the farmer’s
family is connected as principal or accessory.
Coverage under this section is on first loss basis. The liability of the company shall be
limited to the amount of sum insured and for this insured depending upon his
requirement.

Workmen’s Compensation Insurance.

This policy provides for two forms of insurance under Table A and
Table B.

Table A : Indemnity against legal liability to all employees (whether or not coming
within the definition of the term workmen) under the WC Act 1923 and subsequent
amendments to the said Act prior to the date of issue of the policy, the fatal accidents
Act,1855 and at common law.

Table B: Indemnity against legal liability under the fatal accidents act, 1855 and
common law.

The policy indemnifies the insured i.e. the employer against his liability as an
“employer” to accidental injuries (including fatal) substained by the “workmen”
whilst at work. On payment of extra premium, medical, surgical, and hospital
expenses including the cost of transport to hospital for accidental employment
injuries are also covered. Liability in respect of diseases maintained in Part
C/schedule III of WC. Act which arise out of and in the course of employment, are
also covered on payment of additional premium.

The policy can be taken by any employer whether as a principal or contractor to cover
his liability towards employees under the statute and common law. The policy also
provides for payment of legal costs and expenses incurred with the Company’s
consent. The policy reimburses the amount of compensation subject to the provisions
WC act as follows:

1) Where employment injury results in death, 40% of the monthly wages of the
deceased workman multiplied by the relevant factor or Rs.20, 000/- which ever is
more.

2) In the case of permanent total disablement, 50% of the monthly wages of the
injured workman multiplied by relevant factor or Rs.24, 000/- which ever is more.

3) In case of permanent partial Disablement,

(a) For an injury specified in part II of schedule I, the percentage of loss of

earning capacity caused by the injury applied to the compensation payable
for permanent total disablement.
 (b) For an injury not specified in schedule I, the percentage of permanent
loss of earning capacity as assessed by a qualified medical practitioner
applied to the compensation payable for permanent total disablement.

In the case of temporary disablement, total or partial, a half monthly payment

equivalent to 25% of monthly wages of the workmen to be paid in accordance
with the provisions of the act.

Public Liability (Act) Insurance.

The public liability Act, 1991 was made effective from, 01.04.1991 to provide though
insurance, immediate relief, by owner who control or handle hazardous chemicals, to
persons affected due to accident due to handling such hazardous substances on ‘Not
Fault Liability’ basis. As per the act, anyone who owns controls or handles hazardous
chemicals as detailed in the provisions of the act should take public liability (Act)
insurance.

Indemnity limit for

Any One Accident (AOA): Not less than the paid up capital of the insured subject to a
maximum of Rs.5 crores.

In case of claims exceeding the above statutory limits, it is to be met by the

Environmental Relief Found (ERF).

Insurance Claims and Servicing.

Auto Claims.

Auto claims are broadly of three types:

 Own damage Claims.

 Theft claims.
 Third party claim.

Procedure of claims Settlement.

1) Reimbursement Basis: furnished all bills voucher in original as relating

to the claims with the insurance company & within a stipulated period.
The claims will be paid to the insured or the financer as the case may be.

2) Cashless Facility: Sign across the claims discharge cum satisfaction

voucher and pay the insured liability (Viz.compulsory excess,
Depreciation, Voluntary Excess, if any such other liability as stated in the
insurance policy Document) as assessed by the insurance company.

Documents Checklist:
Claim for accident damages:

1. Proof of insurance- policy /cover note copy.

2. copy of registration book, Tax Receipts (Please furnish original for

verification)

3. Copy of motor Driving License (with original) of the person driving the
vehicle at the material time.

4. Police FIR (In Case of third party property damaged/death/body injury)

5. Estimate for repairer where the vehicle is to be repaired.

6. Repaired bills and payment receipts after the job is completed.

Claim for theft cases:

1. Original Certificate/policy Document.

2. Original Registration Book, with Theft endorsement from concerned

RTO and Tax Payment Receipts.

3. Previous Insurance Details – policy No., Insuring Office/company,

period of insurance.

4. All the sets of keys/services booklet/warranty cards

5. Police FIR and final investigation report/JMFC report.

6. Acknowledged copy of letter address to RTO intimating theft and

making vehicle Non-Use.

The insurance may submit following on admission of liability.

1. Form 28, 29 and 30 signed by the insured & Form 35 signed by the
financer, as the case may be, (Undated and blank), on admission of
liability be insures.

2. Letter of subrogation.
 3. Consent towards agreed claim settlement value from the insured and
financer.

4. NOC of the financer if the claim is to be settled in insured’s favour.

5. Claim Discharge Voucher signed across a Revenue stamp (Format

attached below.)

Health Insurance Claims.

To provide prompt claims servicing, insurers have appointed third party administrator
duly licensed by IRDA.
The TPA will be happy to provide you with services in a hassle free manner within the
terms and conditions of your Health policy. They will provide you the following claims
services:

 “Cashless service” at all our Network providers for all eligible

ailments/conditions.

 Processing and settlement of claims under the mediclaim policy with the time
approach.

 24 hours Call Center Service.

As soon as a claim occurs, please intimate to the TPA help line/Toll free number as
mentioned in your health Card. Following information needs to be furnished by you
while intimating a claim:

 Your contact Number.

 Policy number and membership ID number (as reflecting on the health card)

 Name of insured person who is sick or injured.

 Nature of sickness/accident.

 Date & time of disease in case of accident, commencement date of symptom of

disease in case of sickness,

 Location of loss.

 Place & contact details of the insured Person.

Claim Procedure:
 Procedure for Reimbursement claims:

To avail inpatient hospitalization services, you services, you can go to any hospital of
your choice, either a hospital on our network or a hospital outside the network. The
difference between the two being that TPA can authorize for “cashless services” in the
hospital on our network whereas you will have to settle all the bills in the hospital which
is outside our network.
However you have to follow the procedure listed below to get the services in different
situation.

(A) Emergency hospitalization.

Step 1: Take admission into the hospital.

Step 2: As soon as possible, inform TPA about the hospitalization.

Step 3: At time of discharge, settle the hospital bills in full and collect all the
bills, documents and reports.

Step 4: Lodge your claim with TPA for processing and reimbursement.

(B) Planned hospitalization

Step 1: inform TPA about the planned hospitazation.

Step 2: Get admitted into the hospital.

Step 3: At the time of discharge, settle the hospital bills in full and collect all the bills,
documents and reports.

Step 4: Lodge your claim with TPA, for processing and reimbursement.

Procedure for Cashless Claims:

Cashless Service is the service wherein your need not pay any amount either as a
deposit at the time of admission or for the hospital bills at the time of discharge. This
facility is available only at our network hospitals. To avail the “Cashless Service” you
need to fill “Cashless request form” available in the network hospital get an
authorization from TPA. This authorization along with provider at the time of
admission. Please Note: TPA will authorized “Cashless Service” at the network
provider in all cases eligible under the insurance policy.
“Cashless Service” may be denied in some of the situation as listed below.

 In case of any doubt in the policy terms with respect to the present aliment.
  If the information sent to TPA is insufficient to confirm coverage.

 The ailment/condition etc.not being covered under the policy.

 If the request for preauthorization is not received by TPA in time.

Denial of “cashless services” is not denial of treatment. You can continue with the
treatment, pay for the service to the hospital, and later send the claim to TPA for
processing and reimbursement.

A) Emergency hospitalization

Step 1: Take admission into the hospital.

Step 2: As soon as possible, please obtain the pre- authorization form from
hospital and get the same filled in and signed by the attending doctor.

Step 3: Fax the pre- authorization form by you/hospital along with necessary
medical details like investigation report etc to TPA at the number mentioned in your
health card.

Step 4: A) If authorization for “cashless services” from TPA has been received by
hospital.

At the time of the discharge settle the hospital bills in full and collect all the bills
documents and reports

 Pay for those items that are not reimbursable under the mediclaim policy.

 Verify the bills and sign on all the bills.

 Leave the original discharge summary and other investigations reports with the
hospital. Retain a Xerox copy for your records.

B) In case “Cashless Service” was denied by TPA at the time of discharge lodge
your claim with TPA for processing and reimbursement.

Planned Hospitalization

Step 1: please co-ordinate with your doctor and the hospital and send in all the details
planned hospitalization including the plan of treatment, cost estimate etc. to TPA. This
should be sent to TPA at least 2 days prior to the admission.

Step 2: A) If authorization for “cashless Service” from TPA has been received.
At the time of admission, hand in the authorization letter and a photocopy of your ID card
to the hospital.

a) Pay for those items that are not reimbursable under the mediclaim policy.

b) Verify the bills and sign on all the bills.

c) Leave the original discharge summery and other investigations reports with the
hospital. Retain a Xerox copy for your records.

OR
B) In case “cashless service” was denied by TPA

a) At the time of discharge settle the hospital bills in full and collect all the bills
documents and reports.

b) Lodge your claim with TPA for processing and reimbursement “Please Note: Failure
to intimate TPA as soon as the claims occur may invalidate your claim.”
Document check list for Health & critical illness:
Hospitalization/ Day care Treatment.

 First prescription of doctor with commencement date of the symptom of disease.

 Treatment papers along with doctors prescriptions

 Investigation reports (X-ray/Scan/ECG, laboratory Etc.)

 Original medical bills and receipt of Hospital, doctors, medical shops, diagnostic
centre etc supported by Doctor’s advice.

 Hospital discharge cards.

 Copy of FIR (if any in case of accident)

Critical illness Claims:

 Claim form duly completed.

 Original Specialist Doctor’s certificate confirming the diagnosis and when the
symptoms first occurred.

 Relevant investigation reports (Radiology, pathology etc) confirming the

diagnosis.

 Hospital admission & discharge card/certificate.

Domiciliary Hospitalization

 First prescription of doctor with commencement date of the symptom of disease.

 Treatment papers along with doctor prescription.

 Investigation reports (X-ray/scan/ECG, laboratory etc.)

 Original medical bills and receipt of Hospital, doctors, medical shops, diagnostic
centre etc supported by Doctor’s advice.

 Copy of FIR (if any in case of accident)

 Certificate from attending doctor/physician stating the condition of the patient is

not permissible for him/her to be removed to Hospital/Nursing Home or
documentary proof of lack of accommodation in hospital/nursing home.
Disclaimer:

The contents of this book are complied from various sources i.e. internet, Insurance
Journals,Magazines,course material of III etc. and are exclusive and not exhaustive. The
contents are just for reference and does not hold any relevance to a particular company,
Institution or Organization.