Lesson 9 - Miscellaneous Insurance

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MISCELLANEOUS INSURANCE
So far we have seen various types of insurance policies, which are either compulsory or non-customised. Miscellaneous insurance policies have emerged in the wake of industrial revolution, which entailed new varieties of hazards, which in normal course, one cannot afford to make good. Thus tailor-made plans became need of the hour and insurance companies floated new policies to suit the requirement. Some of such insurance policies are detailed here. One main feature of these policies is that the premium is comparatively low and people tend to turn a blind eye towards. Reason - optional to an extent and unaware of the benefits.

Have you ever thought of sustaining a pecuniary liability towards the damage caused to others for your default or neglect?
Can you afford to replace any highly priced household article if it is irreparably damaged or lost?
Have you felt the pinch of money for paying your hospital needs?
Are you prepared to face the eventualities of theft or burglary?
If not, better late than never! It is worth paying a small price for our invaluable possessions.

Miscellaneous insurance can be classified on the basis of area of insurable interest covered by the policies. Some of the well-known policies under miscellaneous insurance are dealt with here.

1. Personal Insurance
2. Liability Insurance
3. House holder's Insurance
4. Burglary Insurance (Business Premises)

1. PERSONAL INSURANCE:
Under this policy, a person who is affected or having insurable interest either on himself or some other person, takes the policy to pay for the pecuniary loss suffered. Some of the main features of this type of policy are:

1. This is not a contract of indemnity
2. Compensation is payable according to different levels of benefits
3. There has to be insurable interest for the insured either for himself or for a third party of his interest.
4. Theory of contribution or subrogation is not applied.

Some of the common insurance policies falling under this section are Personal Accident Policy, Medical Insurance (already covered elsewhere as a separate chapter), Overseas Medical Insurance, Special schemes for aged persons, etc. The most common policies under the category are Personal Accident Insurance and Medical Insurance

Personal Accident Insurance
Personal Accident Insurance is taken to cover either the death or bodily injury of a person. Usually this policy is taken for one year with a provision for renewal. The amount of policy is based upon the earning capacity of the insured. The benefits under this policy comprise compensation against death, permanent disablement, partial disablement, etc. The policy covers persons in the age group between 5 and 70. If persons beyond 70 are to be covered, additional premium is charged by the insurance company. Similarly loading of premium is done if medical expenses are to be covered under this plan. The premium to be paid is comparatively less, ie per Rs.1,000 sum assured, the premium is Rs.0.45 for normal risk and Rs.0.90 for heavy risk. One cannot ask for any claim if the injury is sustained due to suicide attempt, childbirth, or malafide (done in bad faith) intentions.

2. HOUSE HOLDER'S INSURANCE
House Holder's Insurance policy is perhaps one of the most needed, but often neglected. This comes as a package in which many small policies are built in and incorporated, at a very low premium. The premium is again calculated on the basis of the values fixed by the insured for each and every article to be insured. The main requirement to take the policy is to fill up the proposal form and submit a full list of things to be insured, along with the values of each. Premium is different for each article, according to their value and risk involved.

The policy covers the following under ten sections.

Construction and Contents
Construction will include damage to the buildings due to lightning, fire, explosion, riot and strike, earthquake or natural calamities like flood, storm, cyclone, landslide, inundation, etc.

Loss can be suffered, also by Burglary, Housebreaking, Larceny or Theft. As explained, many a policy which otherwise needing separate coverage are included in one policy as under.

Valuables and Jewellery
All valuables and jewellery damaged or lost due to the above perils could be insured subject to the limits specified in the relevant schedule. This is called All Risk policy.

Domestic Appliances
Damage caused due to mechanical or electrical breakdown is insured against. Usually, mechanical appliances, electrical appliances, apparatus and gadgets are included under the plan.

Plate Glass
Similar to the jewellery, the damage is covered subject to the liability defined in the schedule.

T.V Set
Loss or damage caused to the television due to fire, explosion, theft, mechanical failure or all other types of damages as explained above, can be the possible risks to be covered. Eg: Damage to Picture Tube. VCR and VCP also can be covered under this plan. Under this scheme, legal liability is covered to the extent of Rs.25,000. The property of the insured also is covered up to Rs.3,000 if it is due to the collapse of antenna.

Baggage Insurance
This is another feature of the policy. This is akin to Travellers Insurance or Money-in-transit insurance. The money or money's worth lost from the baggage while travelling, can be insured.

Pedal Cycles
Damage caused due to fire, lightning, explosion, riot and strike, malicious act, flood, earthquake, storm, cyclone, theft, burglary, etc. will be covered. Legal liability to the extent of Rs.10,000 also will be paid by the insurance companies.

Public Liability
The policy will also cover loss or damage to the property of a third person subject to the amount specified in the schedule. Eg: Damage to the roof of the house of your neighbour following the fall of a tree in your precincts.

Exclusions:
Wear and Tear, War, Loss of Profit/Consequential Loss and Nuclear Perils are excluded from all 10 sections. The general conditions like reasonable care, immediate notice, contributions, indemnity, average clause, etc. are applied here too.

Premium
As already mentioned, different rates of premium are applied for different articles/things insured as multi-policies are clubbed into one policy. Some of the rates are as under.

A discount in the rate of premium is available at the rate of 15% if more than 4 sections are covered.
If more than 6 sections are covered, the discount rate will be 20%.

Note: The rates and percentages are according to the Tariff prescribed for General Insurance Corporation. These may vary for private insurance companies.