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Insurance: Ways to reduce your motor insurance premium
Apr 29, 2016
While the third-party motor premium rates are fixed by the regulator, you could control the cost on own damage.
Keep no claim bonus intact
A no claim bonus (NCB) is a discount the insured is entitled to get on his premium during renewal of the motor insurance policy, depending on the number of years he has not made a claim. It is earned only in the own damage (OD) section of motor insurance policies. If you avoid filing small claims and pay for minor repairs yourself, your premium at the time of renewal will be lower.
It is advisable that when your car gets damaged, get an estimate for the repairs. If the amount that you need to spend towards repair of damages is lower than the amount you could end up saving during the renewal of your policy through the NCB you can earn, you could avoid making the claim. If your claims are of a negligible amount for issues such as a broken taillight or scratches on your vehicle, not filing them can help you keep your no claim bonus intact. For instance, if your motor own damage premium is R11,000 and you are entitled to a 35% NCB discount (Rs 3,850) during renewal due to a claims-free policy period, it would make monetary sense to avoid filing for a claim for a repair cost of Rs 3,000.
Another way to protect your accumulated NCB is to buy the NCB protector add-on cover that comes by paying an additional premium. This keeps your NCB protected even if you make a claim during your policy period and restores it at a slab lower. For instance, if you have accumulated an NCB of 40% but file a claim, the add-on cover would make sure your NCB doesn’t become nil at the time of renewal, and reinstates it at 30%.
Get vehicle repaired at a network garage
You should take your vehicle to a network garage of the insurer to get the damages repaired at a lower, negotiated cost. You might be able to get the damages repaired at a cost around 20% lower than that charged by your local garage. For instance, if the repair cost is Rs 5,000, you could get the work done at Rs 4,000. So you would not only get better and convenient service, but would also end up saving on your out-of-pocket expenses towards the repairs. Also, the lower the repair cost, the lower would be the depreciation amount borne by you.
Avail long-term motor insurance policy
Products in the market offer a long-term cover for two-wheelers with an option of two and three-year coverage, along with 24×7 roadside assistance. If you avail such a policy, not only would your vehicle be insured for a longer duration, but you would also save your expenditure towards your motor premium as compared to a single-year policy. Also, third-party motor premium and service tax hikes would not affect such a policy.
Opt for voluntary deductible
Another way of reducing your outgo towards motor premium is by opting for a higher voluntary deductible component in case of a claim. A deductible is a specified amount that the insured has to bear when he files a claim, following which the insurer pays the balance. Opting for a higher deductible earns you a discount in your premium. So, you could opt to contribute towards your claim and pay a lower premium, discounts for which could go up to 20% to 35% subject to the voluntary deductible amount you choose.
For instance, the defined deductible in the motor insurance policy is R1,000/1,500. However, if you avail a higher voluntary deductible say of R7,500, you would be entitled to 30% discount in your own damage premium. There are different ranges of deductibles depending on factors such as the size of your car as well as the risk exposure. Ideally, if the insured is confident of his driving skills, then he should opt for a higher deductible.
Damage-cost control
If you avoid filing small claims and pay for minor repairs yourself, your premium at the time of renewal will be lower
One way of protecting your accumulated no claim bonus (NCB) is by buying the NCB protector add-on cover that comes by paying an additional premium
You should take your vehicle to a network garage of the insurer to get the damages repaired at a lower, negotiated cost. You might be able to get the damages repaired at a cost around 20% lower than that charged by your local garage
The writer is chief technical officer, Motor, Bajaj Allianz General Insurance
Source: The Financial Express
United India inches closer to win Goa's Health scheme bid
Apr 26, 2016
The United India Insurance company has come quite close to win the bid for Goa government's Health Insurance scheme named Din Dayal Swasthya Seva Yojana.
"United India Insurance Company is the lowest financial bidder in comparison to other rivals. The company has a bid of Rs 3263.25 per family," State Health Minister Francis D'Souza said as the Health department opened financial bids for the flagship scheme.
The department will now send the comparative statement to the state government for finalisation, he said.
D'Souza said unlike the health insurance schemes in the past, the upgraded one (scheme) would provide quality medical care, hospitalisation and surgery both in government and private hospitals.
"The scheme will cover 15 lakh population of Goa, which includes three lakh families from the State," he said.
"Before finalising the scheme, the government is working out the modalities including effective benefit of this scheme to the people," he added.
Goa government in the proposal inviting bidders for the scheme had said the insurance cover will be up to Rs 2.5 lakh per annum for a family of three or less members and up to Rs 4 lakh for a family of four and more.
Source: Business Standard
Why One Must Go for Fire Cover, Public Liability
Apr 18, 2016
We all are well prepared to get our vehicle insurance renewed every year. The renewals or fresh vehicle insurance are being done by most of us just to avoid penalties being imposed by the traffic authorities. What if we are hurt or lose our lives due to accidental fires whether in temples or educational institutions or residential complexes or anywhere else? The only alternative is to take adequate life coverage from the insurance companies.
Insurance enables risk transfer from the beneficiary to the insurance company, which undertakes to indemnify the insured for the financial loss suffered due to accidental death, loss of limb.
Generally people know that the fire insurance covers only fire whereas this is not the case. The insurance companies offer ‘Standard Fire & Special Perils Policy’ and just Fire Insurance. This policy not only includes accidental fire but also covers lightening, explosion and implosion, impact damage, aircraft damage, RSMD (riot, strike, malicious and terrorism damage), subsidence and landslide including rock slide, missile testing operations, leakage from automatic sprinkler installations, bush fire. All these coverage are in built.
Add on covers like STFI (storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation), earthquake etc. can be taken by paying additional premium apart from the base premium.
For dwelling units, long-term policies can be taken up to ten years. There are two methods for availing long-term policies.
Method A: Premium will be charged in full without any discount. However, sum insured under this policy shall be deemed to have increased by 10% of the original sum insured at the end of every 12 months period.
Method B: There shall not be any automatic increase in sum insured as in Method A. However, appropriate discounts shall be allowable on applicable gross premium up to 50%.
Public Liability: Since it is for the building or canopy, insurance companies will compensate for the building or canopy and the contents that have been lost, and not for the human lives. Human lives can be covered only after having an additional Public Liability policy. It will indemnify the insured against all the sums which the insured shall become legally liable to pay in the event of: -
Accidental bodily injury to any person and it would include fatal injuries too. Even nervous shock, which is not in the nature of a physical injury, is with in the expression. Illness is also embraced by the expression. Some policies make specific reference to these types of injuries to make position abundantly clear.
Policies issued under this agreement, all sums which the insured becomes legally liable to pay as damages to third party in respect of accidental death / bodily injury / and loss of or damage to property arising out of claims against the insured during the policy period including legal costs and expenses incurred with prior consent of insurers, subject always to the limits of indemnity and other terms, conditions and exceptions of the policy. Premium will depend on the indemnity taken by the insured.
Personal Accident: This policy is suitable for individuals like professionals, executives, administrative staff etc. Policy pays the sum insured in the event of unfortunate death/ permanent total or partial disability due to accident.
Addition to this compensation is given by the insurer @ 1% of sum insured (Max Rs 5,000) for every week of temporary total disability.
This policy is given along with Road Safety Policy, which provides medical expenses coverage due to accident up to Rs 1 lakh. Premiums are very small. Total combo premium is approximately Rs 1,100.00 + applicable taxes per annum per employee (sum assured: Rs 6 lakh).
To sum up, in my opinion institutional insurance must be in combination of ‘Standard Fire and Special Perils Policy’ and ‘Public Liability Policy” in order to cover un-named human lives too. Whereas in residential buildings it must be in combination of ‘Long-term Policy for Dwellings’ and ‘Personal Accident Policy’ in order to cover family members lives by name.
(The writer is a certified professional financial advisor & senior insurance consultant)
Source: The New Indian Express
General insurance industry misses Rs 1 lakh-crore premium target; garners Rs 96,400 crore in FY16
Apr 17, 2016
The general insurance industry has missed the ambitious target of crossing the Rs 1 lakh-crore mark in premium collection by a small margin at Rs 96,401 crore, up almost 14% in the just concluded fiscal.
In FY15, the general insurance industry had clocked a premium income of Rs 84,715 crore.
The growth this fiscal was driven by motor and health insurance segments, which are traditionally the largest segments of the industry.
The four public sector players notched up a premium income of Rs 47,717 crore while 18 private players garnered Rs 39,701 crore and the two specialised operators netted Rs 4,830 crore and health insurers added up with Rs 4,153 crore, a General Insurance Council data showed.
The general insurance industry has 30 players with four state- run players, one state-owned reinsurer GIC Re, two specialised government-run entities -- Export Credit Guarantee Corporation (ECGC) and Agricultural Insurance Company -- five standalone health insurers and 18 private players.
"We have achieved total premium of Rs 96,400 crore in FY16, falling short of our ambitious target of Rs 1 lakh crore by a small margin," General Insurance Council general secretary R Chandrasekaran said.
Blaming the late arrival of the relaxed norms on credit line insurance from the regulator Irdai, which issued the norms in February. He, however, maintained that taking into account inward (reinsurance) business, the industry has already crossed gross written premium of Rs 1 lakh crore-mark.
The industry has done well in 2015-16 with a growth of 13.8%, which is much higher than the previous year's 10%, New India Assurance Chairman and Managing Director G Srinivasan said.
"We are targeting a total premium collection at Rs 20,500 crore in the current fiscal as against Rs 18,300 crore in FY16," he added.
New India saw growth in all the segments -- retail sector (including a personal line of business comprising health and motor insurance) has grown much faster than the corporate segments like fire & engineering and marine in 2015-16, Srinivasan added.
At New India, which is the largest player, the ratio between retail and corporate conventional products stands at 65:35, he said.
Srinivasan expressed hope that the current fiscal will be better than the last year due to increase in premia in segments, like fire and engineering and third-party motor cover.
Engineering and fire are also likely to perform better in the fiscal due to new projects coming up and the revival of the country's economy, he added.
"Secondly, we believe FY17 should be a catastrophe-free year as we had to pay Rs 500 crore in claims due to the Chennai floods last year," he said.
The ‘Jan Suraksha Bima Yojana’ has contributed to the growth of personal accident insurance at New India, apart from creating awareness in the industry, he said.
National Insurance has closed the year with a total premium of Rs 12,000 crore and is targeting to close the current fiscal at Rs 14,000 crore, National Insurance chairman and managing director K Sanath Kumar said.
He also said the growth has been driven mostly by health and motor segments.
ICICI Lombard chief of underwriting and claims Sanjay Datta said: "In case the infrastructure sector does well, then the engineering segment is set to see a better growth in the current fiscal."
"Yes, ‘Jan Suraksha Bima Yojana’ has picked up well. Though the low-ticket segment didn't help much in getting premium income, still it did help get bigger coverage in the personal accident line," he said.
Source: DNA
Rs 5 Lakh Free Insurance With LPG Cylinder. Did You Know?
Apr 17, 2016
You buy different insurance covers to protect against various risks. But are you aware of the free insurance covers that you get with your LPG cylinder or an air ticket that you buy? Here are some of the insurance covers that you get for free:
Insurance cover for LPG users: All registered LPG (liquefied petroleum gas) or piped cooking gas consumers are covered for any mishap caused due to LPG cylinders at their registered address. The cost of insurance is borne by oil marketing companies. According to the website of Bharatgas, the distributor of LPG for Bharat Petroleum, a personal accident cover of Rs 5 lakh per person in case of death is provided. In case of an accident, medical expenses of Rs 15 lakh per event, with a maximum of Rs 1 lakh per person are covered.
The policy also covers the damage caused to the registered premises of consumers for a maximum sum of Rs 1 lakh per event. Piped gas consumers are also insured under this policy.
Insurance with bank deposits: Your money deposited in a bank account - both principal and interest - is insured up to Rs 1 lakh for any default by the bank. It covers all deposits such as savings, fixed and recurring.
However, for claim purpose, all the deposits made under these accounts will be added and a maximum of Rs 1 lakh cover will be given to each depositor. Even if you have deposited in different branch of the same bank, you will get a maximum cover of Rs 1 lakh.
However, banks accounts with different banks are insured separately with a maximum cover of Rs 1 lakh each.
Corporate Deposit Insurance: As per the new Companies Act, any company raising money via deposits will have to provide an insurance cover of up to Rs 20,000 to every investor against default of payment.
Both the principal and interest earned on a company deposit are insured under this cover. "But currently there is no product available in the market which provides corporate deposit insurance. There are no regulations from Insurance Regulator and Development Authority of India (IRDA) which allow insurance companies to provide insurance products for corporate deposit," says Sanjay Datta, chief underwriting and claims, ICICI Lombard General Insurance Company.
Baggage insurance with air ticket: In case of domestic travel, airlines provide an insurance cover of Rs 20 lakh each person in case of death and bodily injury while Rs 20,000 in case of loss of baggage.
Source: NDTV Profit
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