Third party v fully comprehensive insurance Is third party insurance always cheaper than fully comprehensive? Third party only should be cheaper, but according to this is not always the case. Let’s understand the difference between policies. The law demands you have third party insurance which covers the cost to others (the third party) of the damage and injury you cause through your own fault. Your own vehicle is not covered by your own policy. Next you can add to the third party policy, fire and theft being the usual sensible additions. A fully comprehensive policy has everything above, and then includes cover for your own vehicle damage, regardless of who was at fault. Your vehicle is covered up to its market value at the time of the damage. You can add extras like motorcycle helmet and protective gear. So it looks like the insurance company is at risk of paying out more, so the premium should be higher. Our friends at have researched 1.4 million annual car insurance policies and the result challenges what we might have expected. On 30 June 2010 Felicity King-Evans wrote for the comparison website. Analysis has found that in actual fact, fully comprehensive cover is often the cheapest, despite offering the highest level of protection. So how can this be possible? To find out run a quote for yourself covering all the options. The average driver will find that their car insurance premiums rocket if they search for third-party-only cover. But why? It’s always been assumed that the less cover you buy, the cheaper the policy. Steve Sweeney, car insurance expert, explained: “In recent years, drivers with a more ‘risky’ profile, such as younger motorists or those with driving convictions have opted for this cover to keep the cost of motoring down. “Providers have reacted to this perceived increase in risk by driving up the cost of third-party only cover.” After all, insurers are in the business of assessing risk. For example, there’s a higher likelihood of accidents among teenage drivers, so they are charged more. So, if car insurance providers realise that motorists buying third-party insurance only cover are more likely to be involved in accidents, they will rack up the price accordingly – and that’s what’s happened. Third-party only cover costs an average of £1,927 a year, which is a whopping 109% more expensive than average fully comp cover at £922 a year. The average premium for third party, fire and theft stands at £1,348 – nearly 50% more than fully comprehensive. It’s not just that riskier drivers go for these policies, driving up the average cost. By choosing third party cover, experienced drivers fall into a riskier category in insurers’ eyes – the result of which is a higher premium for the individual. [Source: http://indiainsurancegeneral.blogspot.in/2016/01/is-third-party-insurance-cheaper-than.html] Post de-tariffing of market in 2007 the general insurers in India have free market approach to price their products except for motor third party insurance. Sustainable growth is the life line for any business and insurance is no exception to it. Insurers must have the 360 degree view of their business .The Regulator, who watches the interest of the policyholders, however observed that despite its advisories the free market regime coupled with intense competition amongst insurers & their obsession for the top-line is resulting into deficient assessment of insurable risks, in corporate sector, and that the prices are offered to these corporate clients for property insurance and group health insurance at non-viable rates which are ultimately subsidized by the buyers of retail products. Due to aggressive competition the insurers were offering heavy discounts on portfolio basis to retain their accounts and were quoting less than 10 to 20% below the estimated outgo in group health segment to attract new corporate. These corporate with loss making group health covers continue to escape price hikes by shopping for new insurers. The chase to build up top line and the pressure on marketing force of the insurers for their targets resulted in health insurers willingness to accept the business even not covering expected claim cost ignoring loading for medical inflation, acquisition cost , servicing cost by third party administrators and management expenses. In a bid to address this issue and to bring corporate governance in the business behaviour of rhe insurers the Authority has prescribed its pricing prescription which is applicable with the 1st day of 2015. The Authority's prescription for pricing fire, property and group health insurance is to consider Burning Cost as starting point to price these risks. This only can move market forward towards claim plus pricing mechanism. Burning cost is the estimated cost of claims in proposed insurance period and is calculated from previous year claim experience of the insurer duly adjusted for change in number of lives and for changes in the benefit design proposed for current year of the risk. IRDA in its advisory and prescription has made it very clear that industry-wide losses should be considered for pricing the product and insurers current level experience of acquisition and management expenses should be loaded to it. The industry-wide burning cost is available with IIB (Insurance Information Bureau of India) for Fire and Property Insurance but such industry-wide burning cost for group health is not available. The Authority is also aware that brokers are not disclosing all details of group health experience to insurers at the time of RFQ (request for quote). In health insurance the trend & incidence rate usually does not vary from year to year. However, the average claim cost bears the impact of medical inflation to some extent. Till the IIB is ready with the industry-wide Burning cost in group health segment the authority has tightened the reporting parameters. It has prescribed that the intermediary or the client will mandatory have to sign and disclose the claim cost of last year and preceding two years in the input format designed by General Insurance Council of India (GI Council). This will surely improve the disclosure and will put insurers in a better position to assess the risk on quality data necessary to price the risk. With uniform data now available to underwriters if any of them choose to price the group health risk lower than burning cost than it will have to have the approval of its Board of Directors. Further this will have to be filed in form of Exception Report in a format to be designed by IRDA. The Regulator has initiated this move to see right pricing coming into the market and corporate governance in the business behaviour of the insurers. The move signals that premium for this fastest growing portfolio would be rising in last quarter of 2014-15 or else there will be reduction in the benefits including caps beings introduced for procedures or else employers will seek sharing of cost from employees for present benefit design of their health protection covers. [Source: https://generalinsurancesite.wordpress.com/2016/01/18/what-is-new-general-insurance-in-india/] Since Narendra Modi’s government has been in power, significant changes have been made to boost India’s economy and society. One major change was implementing the Indian Insurance Act, first proposed by the previous government. The Act enables global reinsurers to enter as 100 per cent owned branches and increases overall foreign direct investment (FDI) in the insurance industry from the current limit of 26 per cent to 49 per cent. While there are many aspects of insurance, the most significant opportunity not only for insurers but also for Indian society, is the health insurance sector. India is one of the fastest growing health insurance markets in the world. It has grown rapidly since the industry opened to private and foreign players in 1999 with the establishment of the Insurance Regulatory Developments Authority. In 2014, the health insurance market grew to $2.7bn from just $150m in 2004. It is on track to hit $8bn by 2020. There are a number of factors driving this growth. From a workforce perspective, just 10 per cent of India’s 300m working population work within formal sectors such as government, the public sector or in large private companies, which often offer health insurance perks. The rest work in the informal sectors, meaning they are self-employed or working in family businesses and, therefore, without corporate health insurance cover. It is this end of the market that is most dependent on financial security during ill health. Yet, in the absence of health insurance plans, many are liable for medical bills and loss of potential income during treatment. Demographically, the population boom, rising life expectancy and increased incidences of lifestyle-related diseases means that total healthcare expenditure is growing rapidly. It is expected to rise from $70bn to $280bn by 2020. Despite this, there is a low spend per capita compared with countries where healthcare is largely funded by the government, meaning that some 62 per cent of total expenditure on health is paid for out of pocket. India has one of the lowest penetration rates of pre-paid health coverage and medical insurance in the world. This is due to its geographical size, the capital required to invest in developing the distribution network and the current lack of focus from insurers in the individual health insurance sector. The limitation on foreign investment rules in general insurance did not give much incentive for a lot of foreign experienced players to participate in this market. There are just five standalone health insurance companies and 17 private sector insurance companies offering health insurance. So there is low consumer choice, coverage and competition. Compare this with the UK, which has 911 general insurers. India itself had over 100 players in general insurance before the market was nationalised in 1972. Active foreign participation is critical for the sector, bringing better standards and driving competition, with better quality products, customer coverage and choice. The increase in the FDI limit will create significant opportunities for foreign players to enter the market through joint ventures, mergers or acquisitions. Yet there are some significant challenges that remain, such as finding the right acquisition target or a partner with the right balance of local knowledge and cultural compatibility in the boardroom between the two organisations. Successful firms will be those that are comfortable with local regulatory requirements and have working knowledge of India’s business environment. Modi’s government has promised to revamp India’s healthcare sector and make services more affordable and accessible for all walks of society. With the doors opening to India’s insurance industry, the health insurance sector will play an increasingly important role in delivering this commitment to its citizens from all walks of life. [Source: http://blogs.ft.com/beyond-brics/2015/03/30/indias-insurance-reform-will-benefit-insurers-and-society/] If you own a home, homeowner’s insurance is a must—and it usually isn’t cheap. For many people, paying homeowner’s insurance is lumped in with a monthly mortgage payment, so they never think about how much they’re actually paying for it. But reducing your home insurance rate can reduce your monthly payment, leaving more money in your pocket at the end of each month. And there are ways to lower your home insurance rate; they just aren’t always obvious.
Every year, there are potential opportunities for reducing your home insurance bill. But homeowners have to be proactive to take advantage of the savings. Here are five things you can do to enjoy lower insurance costs. 1. Shop around. If you haven’t yet purchased a home, consider the cost of insurance before you buy. If you purchase a home that is within close proximity to fire hydrants and fire protection services, you could get a lower rate, as insurers look favourably on homes with those criteria, says Michael Barry, vice president of media relations at the Insurance Information Institute. When you’ve chosen a home insurance, Barry recommends shopping around for an insurer. “The U.S. homeowner’s insurance market is a competitive one and you’ll find wide variations when getting price quotes from different insurers,” he says. “Be sure, however, you also look to see how the coverage’s differ from company to company.” Not every insurance company will provide the same coverage — so when purchasing a policy for the first time or if you decide to switch insurers, make sure you’re comparing apples to apples. 2. Review your policy annually. After most people purchase a homeowner’s insurance policy, they simply pay the premium each year and never look at the policy again unless they need to make a claim. But that’s usually a mistake. By reviewing your policy each year, you can see if your rate has changed or if you qualify for any new discounts. When you first purchase a homeowner’s insurance policy, your insurance agent is required to let you know about discounts you qualify for. But each year when you renew, there is no such obligation. It’s up to you to be proactive. “Each year, your home insurer will almost always modify slightly your policy limits to reflect the cost of construction materials and labor in your neighborhood,” Barry says. “Both of these variables factor into pricing a policy.” 3. Increase your deductible. If you’ve been paying for a policy with a low deductible and you want to decrease your insurance rates, consider a higher deductible policy. Increasing your deductible, from $500 to $1,000, for instance, is “the fastest way to achieve premium savings,” Barry says. 4. Upgrade your home. You can also qualify for insurance discounts if you make changes to your home that improve safety or security. For instance, installing smoke detectors, burglar alarms or dead-bolt locks can usually result in insurance discounts of at least 5 percent, Barry says. Other discounts are available if you upgrade your home in a way that makes it “better equipped to withstand a natural disaster,” Barry says. For instance, that might include a new, wind-resistant roof or reinforced windows. But keep in mind that when you make cosmetic upgrades to your home—new kitchen cabinets or adding a sunroom, for instance—check with your insurance agent to make sure your updates are covered, and don’t be surprised if your rate increases to cover the updates. 5. Bundle policies. Insurance companies insure much more than homes, and they want your business on as many lines as they can get it. For that reason, many insurers will reduce your homeowner’s premium if you also purchase your car insurance or other types of insurance from them. So consider moving your life, auto or other policy to the same company, and then ask for a discount. As you look for ways to cut expenses, consider implementing these ideas to save money on your annual home insurance bill. [Source: https://www.societyofgrownups.com/blog/save-on-home-insurance] If you don’t skip the commercials during daytime TV, you’ve probably seen an ad for The General insurance company, featuring The General, their pint-sized mascot. Whether posing next to a hot rod or driving a giant bus down a very narrow road, The General is on a mission to let drivers know about The General auto insurance, with the slogan: “For a great low rate you can get online, go to The General and save some time!” While The General as a company has existed, under various names, for years, its mascot is a relatively recent invention. Adopted “a few decades” after the company was founded, The General is a decorated soldier with a gravelly voice and a very high mustache-to-height ratio. He was designed by California-based Ken Roberts Productions, and has undergone several makeovers over the years. In his early days, he sported a cell phone – the kind you might associate with Gordon Gekko – and had a cartoony quality, but recently, both his technology and rendering have been updated. In 2007, he gained a third dimension, and in January 2013, ads began portraying him from a lower angle, so more of his face is visible, giving him a friendlier expression. His current cell phone also fits in the palm of his hand. His spots gained the company three Telly Awards – an honor for outstanding local, regional and cable commercials and shows – in 2012, though there are reportedly thousands of Telly winners each year, so The General is in good company. Founded in 1963, the company currently called The General was first known as the Permanent General Agency. Subsequently, the PGA and its subsidiaries have has many other names, including the Permanent General Insurance Corporation. The organization adopted the name The General in 1997, and consolidated all of their operations under it in 2012. In January 2013, the company was purchased by American Family Insurance. The General is headquartered in Nashville, and has physical locations in Louisiana. Other customers do business over the phone or online, where The General’s auto insurance quotes are free, quick and anonymous. If you’re looking to sign up, however, be aware that coverage isn’t available in all states. Though less well-known than many of its competitors, The General may be your best bet if you have a spotty driving history. The company caters to those with a few tickets, a DUI or even SR-22’s. For this reason, you could likely get your best rate elsewhere if you have a clean driving record. If your lowest quote is from The General, though, know your reasonable premium could exclude a number of fees – according to former customers – and that their customer service is sometimes lacking. Those trying to process a claim with the company often report unresponsive agents and lower-than-agreed pay-outs. For others, the low prices are worth the risk. But whether you’re persuaded by their ads or not The General car insurance company and their mascot will be interrupting your talk shows for years to come. [Source: http://indiainsurancegeneral.blogspot.com/2016/01/general-insurance.html] Car insurance, as you know has to be renewed on time. Failing to do so will attract a lot of trouble for your car or vehicle, third party, and even to yourself. To keep things simple, let's say in an unfortunate incident that you have met with a small accident, which has involved another vehicle. Both vehicles have been damaged and the other vehicle owner demands you to pay since it was your fault, but, you think it was his fault.
This is a classic case of an ‘Accident', in which both are wrong and right at the same time. In a case like this, is when insurance comes in handy, and also, renewal on time saves you as well as the other motorist, bearing the cost of damage for both the vehicles. Another important factor is that in case either one sustains an injury, the insurance will take care of that as well as property damage, if you have run over a small fence or into somebody's gate. Is that all? No. Here are some more reasons why vehicle insurance has to be renewed on time: 1. You might have to buy a new policy itself. Yes, if the insurance is lapsed and has not been renewed after a period of time, you will have to shell out more to buy a new policy, even if it is from the same insurance company. Insurance providers have a set time frame before which the policy has to be renewed, and failing to do so will lapse your policy itself. 2. You might end up paying a fine. Some insurance companies might ask you to pay a fine for the number of days your vehicle runs without a renewed policy. That will only be a waste of cash. To avoid that, a simple way is to renew it on time. 3. Keep the police away. You will be fined for not having a valid insurance for your vehicle. Using a car or a motorcycle on public roads needs a valid insurance certificate. In other words, you are committing a crime, a traffic violation that is punishable under the law. Insurance should be renewed on time. 4. You could lose benefits. This is another important reason to renew the general insurance. Companies give benefits and one major benefit is the No-Claim Bonus (NCB), which is awarded if you have not made claims in the past. This can be added up over several years and while renewing the policy, you could get up to 70 percent off on your premium. If the policy is not renewed on time, however, you could lose benefits and end up paying a lot for your insurance policy. So, keeping the above reasons in mind, rush to your nearest insurance provider or grab that laptop and renew your insurance policy now! [Source: http://www-drivespark-com.spiral.media/scatter/www.drivespark.com/?url=http%3A%2F%2Fwww.drivespark.com%2Foff-beat%2Fcar-insurance-renewal-reasons-012154.html%3Foi_source%3Dspiralmedia&adgroupid=93&rand=99498&time=20151029101430483930] Due to various unpredictable factors like weather, road quality and other drivers, even comprehensive car insurance plans sometimes fall short of giving you 360° protection.
Car insurance riders are essentially additional benefits you receive at an additional cost; optional add-ons to any standard plan that provide protection against situations that a regular comprehensive plan might not cover. Related: Comparing car insurance- how to choose the right policy? Engine Coverage Rider For a country like India, where the arrival of Monsoon means clogged roads and smoking exhaust pipes, the Engine Coverage Rider can provide plenty of relief. Insurers provide hydrostatic cover, which covers car damages caused due to a consequential loss. The insurance company will cover engine repair in case it is damaged due to leakage of oil, water stalling etc. if you opt for this rider. Roadside Assistance and Towing Rider The RSA rider provides car owners a number of extremely important services that could be of great help in case you have an accident or even if your car breaks down in the middle of the road. RSA offers 24x7 varied kinds of assistance, such as fuel refilling, lost key recovery, flat tyre change, battery jumpstart, etc. To know more, read this comprehensive guide to RSA. Related: What to do after a car accident Zero-Depreciation Cover When you file an insurance claim, a standard third party insurance plan will consider the depreciated value of the damaged parts rather than their present market value. The depreciation rate varies depending on factors like the make, model and age of the car. You, thus, end up paying a considerable portion of the full claim amount from your own pocket. A zero depreciation cover, however, guarantees full claim amount with zero depreciation deduction. Thus, if your car is damaged in a car accident, your insurer will cover the entire cost, rather than just a portion of it. Personal Accident Cover This secures your family's future in the event of a permanent disablement or in the unfortunate circumstance of your death. You can get coverage of up to 2 lakhs for any damage caused to the driver while travelling, mounting, or dismounting from the car. Some insurers also offer optional accidental covers for co-passengers. This rider applies in case of accidental death, temporary partial disability and permanent partial/total disability caused by road accidents. Ambulance and Medical Expenses Rider The worst case scenario with a car accident is that you or another involved party suffers grave injuries and need to be rushed to the hospital for emergency treatment. This rider compensates you for the ambulance charges as well as medical expenses of up to approximately 10,000 INR. Vehicle Replacement In case your car gets damaged beyond repair in an accident, or is stolen, surviving without a car, even for a couple of days, can be extremely inconvenient. Insurance companies declare these cases as a 'total loss', which means that the claim amount received under such circumstances is less than the actual market value of the car and not nearly enough to provide sufficient cover or get a replacement. Having a vehicle replacement cover will get your car replaced with a new equivalent car. Related: Just bought a new car? Here’s what to do next! Rental Reimbursement Once your car has been sent to the repair centre, managing without one can be extremely cumbersome. You would have to carpool, take public transport, or even rent a car in the absence of your own, so you can go to work or for other commitments. Having a rental reimbursement insurance plan would help you cope with these costs, by paying for your car rental bills during this time. The next time you’re buying or renewing a car insurance policy, make sure you ask about these riders and include the ones you feel are suitable to your needs. [Source: https://www.tomorrowmakers.com/articles/car-insurance/understanding-the-benefits-of-the-7-major-car-insurance-riders-] Rajesh was confused. Having multiple insurance policies and safekeeping them was a pain. One day, over a cup of morning coffee, he read in the newspaper that policyholders can now get their policies dematted as they’ve been doing for shares and mutual funds. While this sounded great as a concept, Rajesh wanted to know more about the finer aspects of how this works. So, what is an e-insurance account? E-Insurance Account is a short form of “Electronic Insurance Account”. The underlying objective of such an account is to safeguard the insurance policy documents of the policyholder by converting them into an electronic format. This e-Insurance account thus helps the policyholder access his/her entire insurance portfolio at a click of a button. To ensure best practices, the IRDA created guidelines for Insurance Repositories to follow and granted a Certificate of Registration to the following five entities, allowing them to act as ‘Insurance repositories’ who have been authorized to open e-Insurance Accounts: Following are a list of reasons why you should open an e-insurance account: Convenience: All categories of insurance policies (life, pension, health or general) can be electronically held under a single account and policy details can be accessed at a click of a button by logging into the account. Thus, it allows policyholder as well as the authorized representative get a single view of all policies which can reduce a lot of hassle especially at the claims stage. Related: Insurance policies to protect what’s important to you [Info graphic] Safety: Unlike paper policies where there is a loss of damage or policy getting lost, electronic policies do not suffer from these risks & can be easily accessed whenever and wherever needed. Time saving: In addition to insurers, service requests can now be submitted at any of Insurance Repository’s service points. A single request, such as the one for a change of address, can be made to the Insurance Repository, who can update it across all policies. Seamless pay-outs: Policy benefits will be paid through electronic facility to the registered bank account, thus ensuring speedier and more convenient claim settlement, thereby negating any chances of fraud. Related: 5 signs your agent is lying to you (and what to do if they are) How to open an e-insurance account A policyholder has to fill the e-Insurance account form and attach the following documents: Photo ID proof (as per acceptable documents list) Recent passport size photograph, Cancelled Cheque (In case of ECS/NEFT services for insurance premium payment transaction) Address proof (as per acceptable documents list) Thereafter, one has to submit the account opening docket to the Insurance Repository or General Insurance Company. It generally takes upto 7 working days for the account to be opened. Policyholders receive a welcome kit with the details of how to operate the account. Each account has a unique Account number and the account holder will be granted a unique Login ID and Password to access his/her electronic policies online. Policyholder can convert existing paper polices into electronic policies after opening of the account by providing a service request to the Insurance Repository/ Insurer. In case one purchases a new policy and wants to have it auto-added to the e-insurance account, he/she has to just state the e-insurance account number on the proposal/application form & make a request to add it to your e-insurance account. Conclusion: An e-insurance account is a great way to save families from the hassle of running around trying to locate the policy copy in the event of a claim etc., or even approaching each insurer separately for minor things like change of address or phone number. Policyholders would do well to embrace this initiative wholeheartedly & organize their insurance portfolio to get the convenience that comes with this account. [Source: https://www.tomorrowmakers.com/articles/insurance-basics/e-insurance-account-all-you-need-to-know] |
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