FAQ - New India Assurance Co. Ltd.

Can motor policies be issued for a longer term than a year?

No policy can be issued for a period of more than one year ordinarily. However, for motor cycles and scooters only, the Act Policy in Form A, which is the minimum compulsory insurance required by law, may be issued on a long term basis. Such policies once issued remain valid up to the cancellation of the registration of the vehicle by the Regional Transport Authority (R T A).

This insurance is particularly useful for owners of comparatively older vehicles, for whom the Comprehensive Cover becomes a little too expensive considering the age and market value of the vehicle. The premium for such insurance is charged in accordance with the Long Term Act Policy Premium Schedule.

Can motor vehicles be insured against fire and theft risks only?

Yes. Private Cars, motor cycles, scooters and commercial vehicles can be insured against Fire & Theft Risks only, provided they are laid up in the garage and not in active use. The insurance company under such cover shall only be liable to indemnify the insured against loss or damage by:

• Fire

• Explosion

• Self-Ignition or Lightning

• Burglary

• Housebreaking or Theft and Riot

• Strike

• Malicious and Terrorism Damage

In case of vehicles that are in use, Fire & Theft Risks only can be covered with the Act Liability Risks.

Does a third party claim affect the bonus/ malus rate under the comprehensive motor insurance policy?

Does a third party claim affect the bonus/ malus rate under the comprehensive motor insurance policy?

The Bonus/Malus concept is applicable only to the Own Damage Section of the Comprehensive Policy.

The discount or loading is accordingly allowed or charged on the Own Damage portion of the premium. The Act Liability or Third Party premium is absolute. There is no scope for adjustment. As such, an accident giving rise to a Third Party claim, whatever the amount, does not affect the application of Bonus/Malus at the time of renewal of the policy.

Are accessories and extra fittings of the vehicle covered under the comprehensive motor insurance policy?

Accessories are generally those parts which are directly supplied by the manufacturer along with the vehicle. But they are not essential for the running of the vehicle. The engine of a vehicle is essential for its running and obviously not an accessory. A spare tyre, is however an accessory. Loss or damage to accessories are covered only if they are on the vehicle.

In case the accessories are detached from the vehicle and kept in a garage and are destroyed by fire, they are not covered. Radios, tape recorders, air conditioners and other electrical or electronic items are fitted by vehicle-owners. These cannot be considered as accessories. These items qualify as extra fittings and the owner has to specifically describe and mention separate values towards them at the time of insurance.

Only on payment of the requisite additional premium, can they be covered. However, if such items are built-in and supplied by the manufacturer, will be treated as accessories and need not be separately insured.

What happens if there is a dispute regarding claim settlement between the insured and the insurer?

The most common form of disputes that arise between the insured and the insurer is with regard to either admission of liability or the quantum of the claim.

In case of disputes regarding quantum of the claim, where the liability under the policy is admitted by the insurers, it is a condition of the policy that such disputes be referred to an arbitrator, as per provisions of the Indian Arbitration Act,1940

In case the decision of the arbitrator is disputed by any party, then that party can approach the proper forum of either the Consumer Forum or the Civil Court. Disputes regarding admission of liability is always referred to the Consumer Forum or the Civil Court.

What happens if a policy is not renewed in time?

If a motor insurance policy expires and is not renewed in time, two problems arise.

Firstly, if the insured was enjoying a No Claim Bonus in the previous policy and there is no claims made during that period, the bonus eligible on the current policy is forfeited and the policy is treated afresh for the purpose of bonus application, if the policy is not renewed within 90 days of its expiry.

Secondly, if the policy expires and is not renewed in time, before granting the renewal on Comprehensive terms, the insurance company officials have to physically inspect the vehicle, before granting the cover. This may cause a lot of inconvenience. It is, therefore advisable to renew the policies in time so that there is no interruption in the period.

Is it essential to carry vehicular documents when the vehicle is in use?

According to Section 158 of the Motor Vehicles' Act, any person driving a motor vehicle shall, on being so required by a police officer in uniform, must produce

• The certificate of insurance

• The certificate of Registration or RC Book

• The driving license

• In case of a transport vehicle (commercial vehicles) also the certificate of fitness and the permit and

• The pollution under control certificate

Failure to produce such documents or in case the validity of such documentation has expired, it constitutes a penal offence.

What is the significance of vehicular documents in motor insurance claims?

The provisions of the Motor Vehicles Act largely influence motor insurance in India. Offences relating to vehicular documents can affect the contract of insurance adversely.

If the certificate of insurance is not valid at the time and date of accident, there is no question of claim under the policy, as the risk would have operated beyond the period of insurance. Just imagine the fate of the owner of a vehicle in case he does not have a valid policy and fatally injures a pedestrian by accident. The entire liability that would arise out of the third party claim would have to be borne by him. And that would mean a lot of money.

The certificate of registration not only proves ownership of the vehicle but also gives it an identification number. If the vehicle is not registered in a person's name, he cannot be rightfully the owner of the same. He is therefore not entitled to claim any insurance money arising on account of accident to the vehicle. When a vehicle is sold, the buyer should necessarily get the ownership transferred in his name by means of a transfer endorsement in the RC book. An intimation should be given to the insurance company also to endorse the insurance policy accordingly.

The driving license is a very important document. The insurance companies by means of a warranty in the policy specifically mention that the company shall not be liable to pay any loss or damage arising out of an accident, if at the material time the driver was not holding a valid and effective driving license.

Valid means that the driver should possess the license entitling him to drive that particular type of vehicle. A person holding a driving license to drive a car is not entitled to drive a motor cycle.

Effective means that the license should be in force. If any of these conditions are not satisfied the driving license is treated to be invalid and claims if made are rejected by the insurance companies. A learner's license is said to be valid and effective, if an "L" board, according to specifications of the Act, is installed in the front and rear of the vehicle, and a person holding a valid and effective driving license of the vehicle being driven, is seated beside the holder of the learner's license.

The permit is a document issued to commercial vehicles authorising its use and route. Normally we find the words 'National Permit' written on the hood of trucks or buses. These vehicles are permitted to be used anywhere in India. If a truck meets with an accident in Gujarat whereas it possesses a permit to be used in Maharashtra only, the insurance company rejects the claim or makes a suitable deduction from the claim amount, for the breach.

The fitness certificate is also issued to commercial vehicles as a proof of its roadworthiness for its particular use. If a vehicle does not have such a certificate and meets with an accident, the insurance companies may reject the claim if the insured cannot prove that the vehicle was roadworthy otherwise and the accident had nothing to do with its roadworthiness. If the vehicle had a fitness certificate and it had expired, insurance companies admit the claim but make a suitable deduction from the amount as penalty for the breach.

What happens if a vehicle flees after injuring a third party and its identification cannot be traced?

Such cases are known as Hit and Run Accidents. Section 161 of the Motor Vehicle Act defines a 'hit and run accident' as an accident arising out of the use of a vehicle, the identity of which cannot be ascertained in spite of reasonable efforts for the purpose. Obviously, in such accidents since the vehicle is not traced, no liability can be imposed on any insurance company and the victims have to suffer.

This Section of the Act provides for payment of compensation (Solatium) in respect of the death of any person resulting from a hit and run motor accident, a fixed sum of Rs.8,500 and in respect of grievous injury to any person, a fixed sum of Rs. 2,000.

This compensation is payable out of a 'Solatium Fund' established by the Central Government and it consists of 70% contribution of the General Insurance Corporation of India and 30% by the Central and State Governments

What should you do in case of a road accident?

If there is an accident causing injury or damage to any person, animal, vehicle or property, the driver of that vehicle should render all possible help to the injured.

He should also report the matter to the nearest police station, within 24 hours of the occurrence of such accident. According to the provisions of Section 134 of the Motor Vehicles' Act, the driver/owner of the vehicle involved in an accident is responsible to convey the injured to the nearest hospital or clinic. The doctor so approached shall be duty bound to render necessary medical aid or treatment without waiting for any procedural formalities.

Here are some Do's and Don'ts, in the event of an accident:


• Keep calm

• Switch off the car engine

• Apply parking brakes

• Switch on hazard warning lights

• Cordon off the area of accident

• Help the injured

• Take down the names and addresses of the witnesses and registration numbers of the vehicles involved

• Report the matter to the police and

• Take down the name and the number of the policeman who arrives at the scene.


• Do not panic

• Do not argue with anyone and

• Do not handle the injured unless it is necessary as a life saving measure.

Is there any age limit of vehicles for consideration of acceptance for comprehensive insurance cover?

Private cars that are over 15 years old are normally not accepted for Comprehensive insurance. Insurance companies may demand an inspection report from a surveyor, certifying the condition of the vehicle, for acceptance of private cars that are between 10 and 15 years old, for Comprehensive insurance.

Commercial vehicles and motor cycles over 10 years old are normally not granted insurance on Comprehensive basis. However, there is NO age limit for Act Policy cover alone.

What should be done on receipt of a court notice from a third party claimant?

On receipt of written notices or summons through the Court, the insurance company should be notified in writing submitting a copy of the notice and the copy of the insurance certificate.

NO offer or promise of payment should be made to any party without the written consent of the insurers. The insurance company may refuse liability arising out of such promise made. The insurance company will issue a claim form which has to be filled in and submitted along with the vehicular documents and other documents in relation to the accident like police report.

After verifying the said documents, the insurance companies appoint a lawyer to defend their case as well as that of the insured. The insured should cooperate with the insurance company, if required, for giving evidence during the proceedings of the case in the Court to strengthen the defence available. Finally, the Court Order is satisfied by the insurance company directly.

What happens if at any point of time there are in existence two policies for insurance of a vehicle?

This situation is one of Double Insurance. In such cases, one of the policies is cancelled, provided there are no claims reported in either of the policies.

Refund is granted on a pro rata basis for the period both the policies are in force concurrently. If one policy is applicable during the period 1.1.2000 to 31.12.2000, while the other is from 1.3.2000 to 28.2.2001. In case the first policy is cancelled on 1.4.2000, refund is made on pro rata basis for the period 2.4.2000 to 31.12.2000. In case the second policy is cancelled on 1.4.2000, then the refund is made for the period 2.4.2000 to 28.2.2001.

However if there is a claim on 1.4.2000, clearly both the policies will cover it. In such cases, the Contribution Condition of the policy is invoked, which states that each of the policies will bear its rateable proportion of the claim.

Can motor dealers and traders take motor insurance policy for the vehicles in their showroom?

Motor dealers and traders who may be either dealing in brand new vehicles or second-hand vehicles or may be engaged in their overhaul or repair, can definitely take a Motor Trade policy.

In the course of his business a trader may have to demonstrate the vehicles to his prospective customers. These vehicles will not have certificates of registration but the transport authorities usually allot number plates which are known as Trade Certificates. These certificates are temporarily attached to those vehicles that go for the trial runs.

Alternatively, these plates are allotted the names of drivers, which are known as Driver's Plates. The cover provided by the Motor Trade Road Risks Policy is against accidental loss or damage to the vehicles while they are being driven in a public place or when they are garaged during the course of a journey, but not in or on any premises owned by or in occupation of the insured.

Manufacturers as well as dealers also use this policy for insuring vehicles, while they are in transit from their premises to the buyer's premises. For covering the vehicles while they are kept in the premises of the Dealer, the Motor Trade Internal Risks Policy is used.

What is a Public Service Vehicle?

A Public Service vehicle means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward. It includes luxury taxies, auto rickshaws, taxicabs and passenger buses.

Who is a Third Party?

According to the Motor Vehicles Act, a third party is any person who is not the insured or the insurer and includes the Government. Pedestrians constitute a large section of third parties. The pedestrians have not only a right to use the footpath but also occasionally to use the road and also cross it. Fare-paying passengers are those who are carried in a public service vehicle.

The owner of the vehicle has a legal duty not only to provide roadworthy vehicles but also to appoint competent drivers. The owner’s responsibility commences from the time the passenger enters the vehicle and continues until he alights from it.

Any accident in the interim period is the responsibility of the owner. Non-fare paying passengers are those who are allowed to travel in the vehicle by gratis. In other words, owner of goods traveling in the goods vehicle hired by him for transportation of his goods is a non-fare paying passenger.

Passengers allowed travel on humanitarian grounds are also non-fare paying passengers.

The duty of the vehicle owner towards such passengers is to provide them with a reasonably safe mode of conveyance. Persons in other vehicles like drivers, the owner or passengers are also third parties. Children are not expected to exercise the same care as adults and therefore the driver of a motor vehicle has to show extra care towards children on the roads.

Do I need business insurance?

I do not have many businesses. Your business howsoever small or big it may be needs to be insured against every risk such as loss, damage and liability. This is because it is your major source of income, in other words your bread and butter.

You could go for 2 types of insurance available. Property and liability insurance. Property insurance as the name suggests will cover damages and losses to your property whereas liability insurance will take care of compensation you may have to pay for damages caused by you. This will also include the litigation suits that may be filed against you.

How can organisations be protected by the errors and omissions policy for computer software?

The Errors and Omissions policy for computer software protects companies and organisations that are involved in exporting computer software to foreign countries against legal liability by paying compensation that includes the claimant's costs, fees and expenses in accordance with the law of the country to which the software is exported excluding the US and Canada.

Under which circumstances, can the errors and omissions policy for computer software be extended?

The Errors and Omissions policy for Computer Software can be extended to include dishonesty or infidelity of the employees, infringement of intellectual property rights, loss of documents including documents that might be damaged, destroyed, mislaid, distorted or erased after payment of additional premium.

Who is entitled to the Stockbrokers insurance policy?

All stockbrokers, joint stock and mutual fund companies are entitled to the Stockbrokers insurance Policy.

What is the limit of indemnity under the Stockbrokers insurance policy?

Under the Stockbrokers insurance policy, the limit of indemnity or the maximum amount payable in the event of a claim is:

• Stockbroker: Rs.5,00,000 per registered stockbroker and Rs.1,00,00,000 for all registered members / stockbrokers for the entire policy period.

• Joint Stock companies: Rs.10,000 per shareholder and Rs.10,00,000 for the entire policy period.

• Mutual Funds: Rs.20,000 per certificate holder and Rs.20,00,000 limit for the entire policy period.

What is Liability insurance?

A liability may arise by violation of any statute. A person may be liable to another as a result of loss or damage sustained by him on account of the wrong done to him. When the quantum of liability is to be decided only by a court of law, such liability would be a legal liability. Liability insurance covers such legal liabilities of the policyholder.

Who is entitled to Product Liability insurance?

Manufacturers of products like biscuits, food drinks, engineering goods, medicines, etc are entitled for Product Liability insurance. The manufacturers have to be very careful in preparing them. In case they fail in their duty carelessly, they have to pay the compensation for the consequences because of defective products that will cause loss of life and damage to property. This responsibility of the manufacturers is covered under the Product Liability policy.

What cover is available under Money insurance? ?

The Money insurance policy covers loss of cash for the payment of wages, salaries and cheques drawn by the policyholder that are in transit between the specified locations. It also covers cash in the custody of the policyholder and petty cash kept in the locked safe.

What is the minimum sum insured under the Industrial All Risks insurance policy?

The minimum sum insured under the All Risk insurance policy is Rs.100 crores and above except for the petrochemicals industry.

What is the scope of cover under Boiler Explosion insurance?

The Boiler Explosion insurance policy is issued for boilers like furnaces, fuel and fire tubes, boiler of the Lancashire, Scottish and locomotive types as well as vertical boilers, water tube boilers, combined fire-tube and water tube boilers, other fired vessels including package boilers, fired and unfired pressure vessels. The policy also covers liability for third party property damage and / or fatal or non-fatal personal injuries.

What is the replacement value under Boiler Explosion insurance policy ?

Under the Boiler Explosion insurance policy, the replacement value is the value of a new boiler of same kind including all incidental expenses like duties, taxes, excise, freight, etc.

When are the warranties applicable under the Boiler Explosion insurance policy?

Under the Boiler Explosion insurance policy, boilers and pressure plants come under the purview of statutory regulations. The warranties that are applied under the policy provided that:

• Boilers are annually inspected by inspectors appointed by the government except where there is no statutory requirement for government inspection. The inspections have to be carried out by an independent and competent person

• Only attendants holding a valid certificate of competency issued under the appropriate Boiler Act shall only operate the boilers. The policyholder shall be in possession of the unqualified permission in writing of the competent inspecting authority to operate the boiler.

Who can be issued a Burglary Insurance on first loss basis policy?

The Burglary Insurance on First Loss Basis policy can be issued only for large warehouses and stores where the value of stock is considerable and of a bulky nature (not less than Rs.2 Lakhs) e.g. baled goods, machinery, etc.

Can railway authorities, air carriers and sea carriers be covered under the Carrier's Legal Liability policy?

Railway authorities, air carriers and sea carriers cannot be covered under the Carrier's Legal Liability policy since it is specially designed for lorry owners or fleet operators only.

Which legal liability of the transport contractor is covered under the Carriers Legal Liability insurance policy?

If the goods are not delivered to the owner safely or in case they are delivered in a damaged condition, the transport contractor is liable to compensate for the damages. This liability of the transport contractors arises both under a statute and common law. This legal liability of the contractor is covered under the Carriers Legal Liability insurance policy.

What kind of civil engineering projects can be covered under the Contractor's All Risk insurance policy?

All types of civil engineering projects like residential dwellings, office buildings, commercial buildings, godowns and warehouses, hospitals, schools and all sorts of factory buildings, cinemas, silos, steel structures, canals, tunnels, drainage systems, road and sewer systems, hangers, dams, bridges, water supply lines, construction work in relation to electric power house, ports and all other construction work depending upon merits of the contractors and quantum of the project are covered under the Contractor's All Risk insurance policy.

How is the sum insured calculated under the Contractor's All Risk insurance policy?

The sum insured under the Contractor's All Risk insurance policy is based on the completed value of the contract works after the completion of construction inclusive of all cost of materials, wages, freights, custom dues, construction costs and materials or items supplied.

How is the premium calculated under the Contractor's All Risk insurance policy if the period of insurance exceeds 12 months?

In case the period of insurance exceeds 12 months, then the premium can be collected in installments and the basis of calculating the installment is as under:

• The entire premium has to be collected 6 months before the expiry date of the policy.

• The first installment must be at least 5 percent of the total premium as compared to the subsequent installment that should be equal in amount.

• The interval between successive installments must not be less than three months.

• The installments must be paid in advance and a schedule indicating the due date and the installment amount must be incorporated on the policy.

Which legal liabilities of couriers are covered under the Courier's Legal Liability policy?

The Courier's Legal Liability policy covers the courier's legal liability arising out of professional / negligence/ errors during the policy period against loss or damage to the parcel / goods / documents given to the courier for which they are responsible until their delivery.

What are the warranties under the deterioration of stock policy?

The Deterioration of Stock policy is subject to certain warranties:

• There should an annual inspection of the chambers by the duly appointed inspectors.

• There must be a current and unqualified permission for the operation of the plant.

• The policyholder must inform of any abnormalities in the working of the plant that might be likely to result in a rise in temperature.

• In case it is proved that the stock was affected by any infection or disease, all the benefits under the policy will cease.

• The policyholder should take care to maintain the temperature at the specified level.

• The policyholder should not accept any stock for storage that has been kept in the sun for more than its dormancy period.

• In case there is an accident resulting in a claim under the policy, conscious efforts must be made to minimise the loss by segregation and disposal of affected stocks as well as making arrangements for storage in alternate place.

Which factors are considered for arriving at the sum insured under the Erection All Risk insurance policy?

Under the Erection All Risk insurance policy, various factors have to be considered such as:

• Prime cost of the machinery (Bare cost) (Manufacturers / Suppliers / Fabricators) plus

• Freight (Inland and Ocean) plus

• Duties / Excise paid at the point of origin, if any +

• Supervision cost at the point of loading, if any +

• Supervision cost at the point of destination, if any +

• Customs / Excise duty at the point of discharge, if any +

• Warehousing charges, if any +

• Clearing and forwarding expenses +

• Fabrication charges +

• Handling charges +

• Erection, supervision and other incidentals and other overheads

Can extra charges like overtime, night work, work on holidays be covered under the Erection All Risk insurance policy?

By paying additional premium, the extra charges like overtime, night work, work on holidays can be covered under the Erection All Risk insurance policy.

What is the extent of liability under an Overseas Mediclaim policy?

For trips where the destination does NOT include the United States of America and its Northern neighbour, Canada, the extent of liability is limited to $50000.

For trips where the destination does include the USA and Canada, the extent of liability can be as high as $100000.

What is the procedure to be followed to apply for cover under an Overseas Mediclaim policy?

To acquire cover under an Overseas Mediclaim policy, the traveler must submit his:

• Visa details and its validity.

• Details about country of visit.

• Passport details

• Name and address of the sponsor, a certificate giving details of employment / studies and its duration.

• Period of cover required.

• Medical examination certificate as per the prescribed guideline.

• Income certificate of the sponsor in case of student.

Is motor car insurance compulsory in India?

Under the provisions of Motor Vehicles Act all the vehicles which are plying in public places shall have at insurance policy at least to cover third party liability as specified under the Act.

What type of policies are available for motor vehicles?

There are two types of policies available for motor vehicles are Third Party Insurance - Policy A andComprehensive Insurance Policy - Policy B.

What is the difference between these two policies?

Third party insurance policy covers only the inter-alia liability of the vehicle owner for loss or damage to life or property of the third parties whereas comprehensive insurance policy covers in addition to third party liability, loss or damage to the vehicle itself byway of accident, theft, etc and specified perils.

Whether the insurance premiums are same or different amongst four Indian companies?

The premium rates for motor vehicle insurance in India are governed by Tariffs which is same for all the companies operating in India.

For what value is the car to be insured - depreciated value or reinstatement value?

The car is neither to be insured for reinstatement value nor for depreciated value. It is to be insured for second-hand value in the local market for a similar type of car for a similar model. In the event of loss, the liability of insurance company is the maximum compared to the market value or the amount of insurance whichever is less.

What are the categories of vehicles that are covered by a Motor Insurance Policy?

For the purpose of insurance, motor vehicles are divided into three classes:

• Private cars: This category comprises of cars, including station wagons, used for social, domestic, business or professional purposes (excluding those used for the carriage of goods other than samples).

• Motor Cycles: This includes motorcycles with or without sidecars, pedal cycles, mechanically assisted pedal cycles and motor scooters with or without sidecars.

• Commercial Vehicles: All vehicles excluding private cars, motor cycles and vehicles running on rails come under this category.

What are the different types of covers that are granted under Motor Insurance?

There are two types of insurance cover for each class of vehicles: "A" Policy:

his covers the insured's liability to third parties for death and bodily injury caused by an accident involving the motor vehicle. This refers to the minimum risks that are to be covered under the Motor Vehicles Act 1938 (Act Liability).

"B" Policy: Is wider in scope and covers not only accidental damage to the insured's own vehicle, but also liability to third parties for bodily injury and / or property damage caused as a result of an accident involving the insured vehicles (Own Damage Losses and Act Liability). The policy can also be extended to cover additional liabilities (as provided in the Tariff).

What briefly is the risk covered under the Own Damage Policy?

The insurance company will indemnify the insured persons against loss or damage caused to the insured vehicle by any of the following:

• Fire, explosion, self ignition or lightning

• Burglary, housebreaking or theft

• Riot and strike

• Earthquake (fire and shock damage)

• Flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost

• Accidental external means

• Malicious act

• Terrorist activity

• While in transit by road, rail, inland waterway, lift, elevator or air

• Land or rockslide

Note: The basic rate for premium calculation is a comprehensive rate covering all the above-mentioned risks. If you do not want a cover for earthquake (for instance if you don't live in an earthquake prone area), flood and / or riot and strike, you would be given a discount of 0.10 percent of "Insured's Estimated Value" for exclusion of earthquake and 0.15 percent of the same for exclusion of flood and for riot and strike respectively.

What are the risks covered under third party policy?

The insurance company covers any amount which is legally required to be paid by the insured person, to third parties on account of their death, bodily injury or damage to their property arising out of the use of the insured car. The insurance company also indemnifies the legal costs and expenses incurred by the claimant, if the insured becomes legally liable to pay them.

The insurance company will further indemnify any legal liability payable by the insured to the occupants in the car (insured vehicle) provided they are not carried for hire or reward and are not employees / family members of insured. The indemnity under this policy is available to any driver who is driving the car if he has been permitted to do so by the insured and provided such driver does not have any other similar cover.

What extension of cover can be obtained with regard to private car?

The following are the prominent extra risks that can be covered in addition to the standard cover:

• Personal accident of insured, spouse and unnamed passengers

• Legal liability of the employees of the insured

• Wider Legal Liability to Drivers

How is the premium charged under motor insurance?

The premium in a Motor Insurance Policy is regulated by the India Motor Tariffs, operating in the Madras, Bombay, Delhi and Calcutta Regions. For private cars, the rating considerations are:

• Cubic Capacity of the Insured Vehicle.

• Insured's estimate of the full value of the vehicle and zone in which the vehicle operates (The premium will also vary depending on whether an 'A Policy' or a 'B Policy' is purchased).

What are the circumstances under which discounts are offered in premium ?

The following are the significant circumstances under which a discount is offered on the amount of premium to be paid:

• Where the insured is prepared to bear a fixed amount in respect of every claim for damages to the vehicle.

• A discount commonly referred to as bonus is allowed on the premium when no claims are made against the policy during the relevant previous year.

• Bonus is payable once a policy has been in force for the full sum assured for a period of 5 years from the date of commencement of the policy.

Note: Loading called malus is otherwise charged on the premium if the insured has made a claim during the relevant previous year. A 5 percent discount is allowed if the insured is a member of a recognised Automobile Association (the amount of discount will not exceed Rs.100/- for private cars).

What is the significance of a certificate of Insurance?

The Certificate of Insurance issued by the insurers in relation to every vehicle is the only evidence acceptable to the police authorities to show that valid insurance exists. This document has to be produced when demanded by an authorised police officer.

The Certificate of Insurance cannot be backdated. Hence, if a Policy is not renewed on or before the expiry date, the Certificate of Insurance in respect of new Insurance will be effective only from the date of New Insurance. For every renewal, a fresh certificate must be obtained. If there is any alternation in the risk during the currency of the insurance, the old certificate should be surrendered and a fresh one to be obtained. Duplicate Certificate in lieu of defaced, mutilated or lost certificates can be obtained on payment of prescribed fee and after production of an affidavit to that effect.

What is expected of the insured in the event of an accident involving damage to the vehicle and/or injury to third party ?

Damage to the Vehicle:

When an accident takes place, a report should be immediately filed with the insurance company and a set of claim forms submitted to them. An estimate for repairs and/or replacements has also to be prepared and submitted. The insurance company may then appoint an independent Surveyor who will also value the damage and hold discussions with the repairers and arrive at the amount at which the claim will be settled.

On completion of the survey, the repair work can be undertaken. When the relevant bills are produced, settlement will be made under the Policy. The claim amount may be paid either directly to the repairer or to the Insured if the latter has already made payment to the repairer and holds proof of the same.

In case of settlement of claim either for total loss of the vehicle or for replacement of certain items, such damaged vehicle or parts belong to the insurance company. They may arrange for disposal of the same in the best manner possible.

Death or Injury to Third Party:

The moment an accident takes place and a third party is involved, a report should be immediately filed with the police. Simultaneously, notice should be sent to the Insurance Company.

No settlement should be made with the third parties for any compensation to the latter and no commitment should be entered into with regard to the Insured's liability with the third parties.

All dealings with the third parties will be only with the knowledge and approval of the Insurance Company. Any claim from third parties will have to be suitably defended in consultation with the Insurance company and expenses for such defence will be payable by the insurance company if incurred with their consent.

Can Motor Insurance Policies be taken for a shorter term than the normal period of one year?

Motor Insurance Policies are normally taken for a period of one year. However, according to the requirements of the vehicle owner, a policy for a shorter term can be issued.

Situations do arise when a person plans to sell off his vehicle within a couple of months and he does not intend to renew his policy for another year. In such circumstances, he may go for a shorter period of cover. Short period insurance attracts Short Period Scale for calculating premium and obviously comes out costlier than the pro rata for the said period.

What can be covered under Neon Sign insurance?

Under Neon Sign insurance, neon signs, glow signs, signboards, hoardings, etc. displayed at business or office premises or on the sides or roofs of the buildings or on roadways can be covered.

What compensation is provided under the Individual Personal Accident Policy?

• If the accident results in death, the full Capital Sum Insured must be paid to the Insured’s beneficiaries.

• In the accident results in permanent disablement that involves the total loss of both eyes or two limbs or one eye and one limb, the full Capital Sum Insured is payable.

• In case the accident results in loss of one eye and one limb, then only 50 percent of the Capital Sum Insured will be paid.

• In case the accident results in partial disablement of certain parts of the insured’s body, only a specified percentage of the Capital Sum Insured will be paid.

• In case there is disablement excluding injuries that are not visible or verifiable through medical tests like sprains, muscular spasms, etc ALL the benefits listed above have to be paid PLUS 1 percent of the Capital Sum Insured subject to a maximum of Rs.3000 per week over the Capital Sum Insured. However the total period of compensation will not exceed 104 weeks or 2 years approximately.

Which discounts are available under the Group scheme for the Personal Accident Policy?

There are chiefly two types of Group Schemes, first called Group A where an employer-employee relationship exists as in corporate firms, companies, etc. The second known as Group B is where an employer-employee relationship does NOT exist as in a club, association, club or any social institution.

Group discounts are applicable for groups of people not exceeding 500. The larger the group, the higher are the discounts given by the insurance company.

What are the different benefits that can be claimed under the Mediclaim insurance policy in event of hospitalisation?

Different heads of benefits under hospitalisation:

• Room boarding expenses by the hospital nursing home.

• Nursing expenses.

• Surgeon, anaesthetist, medical practitioner, consultants, specialist’s fees.

• Anaesthesia, blood, oxygen, operation charge, surgical appliances, medicines and drugs, diagnostic material and x-rays, dialysis and chemotherapy, radiotherapy, pacemaker, artificial limbs and cost of organs and similar expenses All the above benefits are limited to the max sum insured.

• The minimum period of hospitalisation should be for 24 hours. However for certain treatments this limit is not applicable when a package charges are levied for treatment by the hospital.

Who is entitled to an Overseas Mediclaim policy?

Anyone traveling abroad for business or pleasure or as student going for higher studies can qualify for an Overseas Mediclaim. Needless to say, this policy does not cover trips abroad for pre-planned medical treatment.

What are the criteria for deciding on the best health cover?

Choosing a health cover for yourself must be done after careful analysis of your needs. In case you need a wide cover as also Income tax benefits the mediclaim policy with a family package cover could be a suitable option for you. You may also decide on the major ailments policy with annual, five and ten year cover options offering you a reasonable amount of premium savings.

Those going for a wide coverage as also long term cover about five or ten years can opt for the term hospitalisation policy. This gives benefits that are not available under the normal mediclaim policy. Another convenience this policy offers is the non-requirement of every year renewal of the policy. If you plan to go for a less costlier health cover with tax benefit and limited coverage you could choose the Jan Arogya cover. For those closer to retirement age the long-term retirement benefit plan would be the ideal cover.