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Saturday, 29 August 2015

What makes product liability insurance an imperative?

Just like an individual runs risk of life and health, a company faces risks related to various kinds of liabilities. The recent fiasco of Maggie in India is a case in point. This may be perhaps one of the most highlighted cases from the Foods and Beverages sector; there are many instances in the other industries which call for the need of general insurance.

Automobile sector often recalls its products from the market, owing to some defective parts or technological glitches. Some time ago, even telecom companies recalled their products. Nokia, for instance, started a replacement drive for a certain make of its mobile phone batteries.

Many times, companies from the technology sector run the risks of product failure after getting into the markets.

Considering the significance of managing several such risks arising out of product liability, general insurance companies in India offer a range of plans to companies. The product liability policies generally cover consumer claims arising out of damages caused due to manufacturing defect, faulty design, insufficient explanation of warnings and safety related instructions. 

However, there are a number of exclusions not being covered under such general insurance plans. This includes the following:

• Financial losses whatsoever: Understandably, no insurance company would cover losses due to mis-management, changes in regulatory environment, etc.

• Costs incurred towards repairs or modifications of a product: If a company incurs cost towards any repairs or changes in the product, it does not qualify for any insurance coverage

• Damage caused due to manufacturer’s negligence and proven deviation from the normal manufacturing processes

• Deliberate or willful non-compliance with statutory framework

• Penalties by regulators or government authorities

• Consequences of war, insurgency or any acts of terrorism

Generally, such insurance policies need to be renewed annually. There can be a provision of terminating the policy within the policy period, by producing an advance notice of 30 days or as specified in the policy document.

Issues and challenges
Experts from the insurance industry believe that the scope of product liability is so vast that it becomes difficult to ascertain as to in which case the manufacturer is liable to pay for the damages and in which the consumer should be held responsible for the misuse or negligence.

Product liability may also lead to expensive products. Ultimately, the cost incurred by any company towards insurance premium is borne by no one else but an end user.

Manufacturers, in order to cover risks, could raise prices, and may underplay on standards at the same time. The revenue, thus, collected from the sales of products would be far more than the amount paid towards a relatively less number of claims. 

Meanwhile, there is a consensus in the industry that companies must have product liability insurance under their belt in order to avoid untoward risks which can impact their operations, hurt consumer interests and even make them face the threat of closure.


Monday, 24 August 2015

PM's insurance schemes have given hints for rapid growth to the insurance industry: IRDA

''The insurance schemes launched by the Prime Ministers created the kind of growth in months what has taken the insurance industry years. There is a hint in it as to what the industry needs to do to create growth and appropriate value,'' said T S Vijayan, chairman, Insurance Regulatory & Development Authority of India (IRDAI) at the 17th edition of CII's flagship Insurance Summit. The theme for this year was 'Building Growth, Building Value'.

Vijayan said, ''The trick is to make appropriate schemes easy for customers to understand and if the need arises, to claim it. The purpose of the industry is to cover risk and ride on platforms already created. The Prime Minister's products did this by responding to the ecosystem available. The industry needs to do the same.''

Value is determined by how the money that a customer is paying, is apportioned to cover distribution cost, capital cost, processing cost etc. and how much of it goes to balance premium for the purpose it is paid. The proper appropriation of the proportions for all stake holders will ultimately determine value for everyone. At IRDA disruption is not our aim. We want to bring about gradual changes to give value to all stake holders.''

The IRDAI chairman said that he believes that distribution cost is not maximum load on Insurance companies. The load is created by low volume of business given the fixed cost incurred in building the distribution. Volume is the key to all profitability problems in insurance. He hoped that adoption new technology, easily understandable products, easy to claim and unambiguous products, will help them do this. 


Friday, 21 August 2015

Smart Tips to Buy Best Travel Insurance Plans in India

All set for your next travel destination but did you take some time out to plan for a travel insurance? 

Most people do not bother taking a travel insurance plan before any trip. The fact is that a travel insurance plan can act as your saviour in case of any unwanted event occurring during your journey. There are many more benefits that you will get on investing in a suitable travel insurance plan. Nowadays, the numbers of unwanted incidents have increased. Robbery, thefts, and terrorist attacks are some of the usual threats during a travel plan. You never know how bad it can affect you while you are in a new place for vacations. Travel insurance is a helpful tool which can protect you from these unwanted incidents during the tenure of the trip and it can even provide a good compensation when you need it during unforeseen events or emergencies. These days travel insurance has become one of the topmost items in the priority list of a travel itinerary. Tourism sector in India is growing at a fast rate and there are number of players alluring customers by providing customized travel plans. With the advent of many online insurance web aggregators, buying an appropriate travel insurance plan to match your tour package has never been so trouble-free.

Online Travel Insurance

Buying travel insurance online is a simple process as it takes only a few minutes. Within a few clicks, you can easily do the comparison for the best travel plan with the help of its listed features and related details. Comparing is the best and simplest way to get best travel insurance plan. As premium is the main factor to consider, with the help of an online insurance web aggregator, you can calculate the premium of different plans being offered by companies. You can also use an online calculator for calculating premium and invest in the best one.

Things to Keep in Mind

Here are some effective tips that will assist you in finding and buying the best travel insurance policy, online, for all your vacations-

  • Prior to searching for a travel insurance plan, you should first decide your destination where you would like to spend your holidays. After finalizing the destination, search for trustworthy travel insurance companies online and ask for different plans and quotes that they are offering. Instead of searching numerous insurance companies online, you can take help of an online insurance web aggregator that would do all the work of finding and suggesting a suitable plan on your behalf.
  • For old people, it is advisable to select the plan which covers emergency and medical expenses along with the hospitalization and ambulance charges.
  • If you are a frequent traveller, then you can easily get some discount on travel insurance plan.
  • Your insurance plan and its features may differ as per your destination. Most of the insurers are providing coverage for personal injuries but coverage eligibility is lost in case of adventure trips like sea diving, rafting, mountain climbing, etc.
  • There are different insurance plans for business trips which usually provides coverage for loss of business valuables and other related things, etc.
  • Insurance plans for students provide financial coverage and assistance in case of uncertain events during their overseas visits for education.
  • If you buy a family insurance policy, then the insurer would offer compensation to your family in case of flight delays, loss of luggage and other similar situations depending on the insurer.
  • It is advisable for you to avail guarantee from the insurer that it will refund tourism amount if you cancel the trip due to any unforeseen incident.
  • Before applying for the travel insurance plan, be ready with your insurance checklist.
  • Pet insurance policies are also available for the travellers who want to take their pets along with them on the trip.

Travel insurance plan is a vital part of traveling to a foreign country, especially for those who are going there for the first time. The first-time traveller should make sure that they are buying a comprehensive travel insurance plan after researching and short listing a suitable plan online that covers all the phases of the trip.


Monday, 17 August 2015

Should you insure your mobile or laptop?

As the penetration of electronic gadgets like mobile phones, tablets and laptops increases, insurance for such products is also catching on. In some cases, the store may insist that the gadget cannot be purchased without the insurance, while some offer it as an option.

Gadget insurance is always bundled with the product and not sold separately. Also, they are available only for new products, not second hand ones. For this insurance companies have tie-ups with retail stores.

"Between the time of purchase and the customer coming to us for purchasing insurance there could be some damage to the gadget. Since it is a small ticket item, there is no point in getting it inspected. So, we insist on the insurance being purchased with the gadget," says an official from New India Assurance Company.

The premium depends on the coverage offered - damage, theft or both. It is calculated as a percentage of the gadget.

"Currently, the policies are sold only with gadgets sold at physical stores, though we are receiving enquiries for gadgets sold online. Going ahead we may tie-up with online retailers as well," says the official from New India.


You can claim insurance if your gadget:
Suffers accidental damage and such damage causes the gadget to stop working
Fails to work because accidentally fluid has entered its internal circuitry, resulting into stoppage of the insured equipment.
Is stolen in burglary including theft and housebreaking
Is stolen from a locked building/room/vehicle
Is damaged due to fire, lightening and explosion.
Is damaged by act of god perils
Suffers damage or theft during riot, strike and malicious damage
Shotformats Digital Works, a company that provides digital and mobile services has also tied up with New India Assurance to offer insurance for mobile handsets and tablets through its own distribution network called Biscoot. The package includes anti-virus, back-up and insurance for theft and damage. The company has a network of outlets where customers can get their gadgets repaired and the money is remitted to the customer within 48 hours.


But the things to note are the exclusions. For instance, according to the policy details on New India's website, exclusions are as follows:
Mysterious disappearance
Theft from unattended vehicles, except from fully enclosed car that is securely locked
Theft, loss or damage during the hire or loan to a third party
Mechanical and electronic breakdown or derangement
Overloading and experimentation involving imposition of any abnormal conditions
Damage by wear and tear, vermin, atmospheric or climatic condition or gradual deterioration, inherent defect or from any process of cleaning, repairing or maintenance
Loss or damage due to war or nuclear perils, loss by water or from any water borne craft
Intentional or willful act of the insured party

Companies insist that in case of damage the repair has to be done at an authorised service centre and in case of theft a police complaint has to be filed, within 48 hours.


The biggest surprise for customers, at the time of claiming, is the fact that they will get only depreciated value of the product. The depreciation values are usually as follows:
0 to 3 months-20 per cent
3-6 months-30 per cent
6-12 months-50 per cent
In some cases the depreciation can be as high as 75 per cent," the official from New India says.

Saturday, 15 August 2015

Death Claim: Important tips before applying for a life insurance claim

It has been four months since Vinay (aged 39) died in an accident, leaving the family with an irreparable emotional void. He had a life insurance policy of Rs 50 lakh but the claim amount is still pending as Ankita, his wife is still trying to figure out the process of filing a claim and the required documents.

Here are a few points listing the specific process:

What is a Death claim?
When the Life Assured dies during the term of the policy i.e. before the date of maturity of his life insurance policy, the proceeds under the policy can be claimed by the beneficiary. This is called a Death claim.

How to intimate the insurance company about a death claim?
For physical policies, the claimant can get a claim intimation or notification form from the insurance company, while for online policies, the claimant can apply for a form online. The claim intimation should consist of information such as policy number, name of the insured, date of death, place of death, name of the claimant, and so on.

What documents need to be submitted?
The claimant will need to submit his/her statement, the original policy document, death certificate, police FIR and post mortem report (for accidental death), certificate and records from the doctor treating the deceased/hospital (for death due to illness). However, based on the sum at risk, cause of death and policy duration, insurance companies may also request for some additional documents.

How much time does an insurance company take to settle the claim?
As per an IRDA regulation, the insurer is required to settle a claim within 30 days of receipt of all the documents, including any clarification sought by the insurer. If the claim requires further investigation, the insurer has to complete its procedures within six months of receiving the written claim intimation.

Who is entitled to receive the Death claim benefit?
The Death claim is usually payable to the legal heirs or the nominee, as the case may be.

What happens if there is no nomination on death of the Life Assured person, or if both, the Life Assured and the Nominee die in the same event?
If the deceased policyholder has not nominated or assigned a benefactor, or if he/she has not made a suitable provision regarding the policy money by way of a Will, the claim is payable to the holder of a Succession Certificate or evidence of title from a court of law.

In case of any claim dispute, where can your case be represented?
In case of a claim dispute, the claimant has to first approach the customer care department of the insurance company to file for grievance, and if the response is dissatisfactory, he/she may write to the Grievance Redressal Cell of IRDA, which will then take up the matter with the concerned company.

If the complainant is looking for a judicial decision in respect of claims, he or she may approach the Insurance Ombudsman, which will help them settle their complaints in an out of court system.

Source: DNA India

Tuesday, 11 August 2015

Insuring the big fat Indian wedding

Weddings in India, nowadays, are more than just a meeting of two hearts. It's a once in a lifetime event where the bride and the groom are the heroines and heroes of the day. Like any big, expensive event, one needs to insure the weddings too.

While the concept of insurance is picking up in India, inspite of the low wedding insurance costsinsuring personal events like weddings, etc., is not very popular. "Insurance is viewed negatively. And at an auspicious occasion like a wedding, most people do not want to talk about anything untoward or bad happening," says KG Krishnamoorthy Rao, MD and CEO, Future Generali India Insurance.

"In all these years, none of my clients have asked for insurance for their weddings,'' says Aloha Mehta, a Mumbai-based wedding planner who specialises in destination weddings.

Irrespective of caste and traditions, almost all weddings have multiple events like mehendi, sangeet, bachelor / spinster party. Each event is usually a mini-event in itself, with the cost running into lakhs, if not crores.

If the wedding is cancelled or postponed for any reason, apart from the emotional trauma, the financial burden cannot be wished away. "Instead, if the wedding were insured, then at least the host would be spared the financial worries,'' says Krishnamoorthy Rao.

The premium for wedding policies is in the range of about 2-3%. "When you can get peace of mind for a very low premium, why not?'' asks Rao.

Usually, in very high-profile weddings all the arrangements are done by one big event management company. "But in most other weddings, there is fragmentation of costs as different vendors like florists, caterers, etc., provide the various services,'' says Mehta.

While most insurance companies cover some aspects of a wedding under the event insurance policies, companies like Future Generali and ICICI Lombard have special policies for wedding insurance.

"Basically, wedding insurance protects a couple's investment from circumstances beyond their control, and reimburses the expenses that they incur in it. For example, what if your designer wedding dress is lost in airport baggage and you have to buy a new one a day before your wedding? These are the types of big day financial losses that wedding insurance can help to protect,'' says Anil Chopra- group CEO and director, Bajaj Capital.

Interestingly, wedding insurance policies do not cover cases where either the bride or the groom changes his or her mind at the venue of the wedding. "Insurers call it a 'cold feet issue' and this is not covered under the insurance policy,'' clarifies Chopra.

Given that wedding policies come at a very meager premium, it is definitely worth transferring the financial risk of weddings to insurers so as to peacefully enjoy the big fat Indian wedding.


Friday, 7 August 2015

HDFC Life starts selling life insurance through CSC

HDFC Life, country's leading long term private life insurance solutions provider today announced the launch of a new sales channel to take life insurance to semi-urban and rural India using the Common Services Centre (CSC) network.

The company has designed HDFC Life CSC Suraksha, an exclusive term insurance plan to be sold through CSC channel.

HDFC Life CSC Suraksha is a non-participating term insurance plan with annual premium as low as Rs 112. The life cover/Sum Assured that the policyholder can opt for in this plan will range from Rs 30,000 to Rs 2, 00,000. The policy term between 5 years and 15 years wherein have to pay regular premiums throughout the policy term.

In the unfortunate event of death of the life assured during the term of the policy, the nominee will get an amount equivalent to Sum Assured or 10 times Annualized Premium or 105 per cent of the total premiums paid till the date of death which will be higher.

The plan will also offer Tax Benefits as the premiums paid towards the policy will be tax-deductible.

Source: Web India

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