INTRODUCTION TO GENERAL INSURANCE What is Insurance What

INTRODUCTION TO GENERAL INSURANCE What is Insurance? What are the differences between Life & General Insurance?

What is Insurance? What are the differences between Life & General Insurance? Insurance refers to protection against an event that might happen whereas assurance refers to protection against an event that will happen. Insurance provides cover against a risk while assurance covers an event that is definite e. g. death, which is certain, only the time of occurrence is uncertain. Assurance policies are associated with life cover. *For Internal Circulation only. * Insurance is a subject matter of solicitation

TATA AIG : Brief Product Portfolio CONSUMER LINES COMMERCIAL LINES Motor Insurance Home Insurance AIG Combined Private Client Group Extended Warranty Personal Accident (PA) Health Travel Marine Insurance Property Insurance Energy Insurance Financial & Casualty *For Internal Circulation only. * Insurance is a subject matter of solicitation

Basic Concepts of Insurance *For Internal Circulation only. * Insurance is a subject matter of solicitation

BASIC CONCEPTS OF INSURANCE To a Layman, Risk could mean “Exposure to Danger” RISK Anything which aggravates loss is called Hazard HAZARDS Physical PERILS A peril is the cause of loss – the uncertainty/possibility of the occurrence of such a peril is risk Possible/Accidental Occurrences that can destroy or make an asset non-functional. Fire, Floods, Breakdowns, Lightning, earthquakes etc. are perils Morale *For Internal Circulation only. * Insurance is a subject matter of solicitation

CONTRACT OF INSURANCE Offer & Acceptance Capacity to Contract Flow of Consideration Absence of Fraud The Insurance Policy is ultimately a contract and as such general law of contract would be applicable as modified by specific enactments in India such as Stamp Act, Insurance Act, etc. Common Intention Legality *For Internal Circulation only. * Insurance is a subject matter of solicitation

Principles of Insurance *For Internal Circulation only. * Insurance is a subject matter of solicitation

INSURANCE PRINCIPLES 1 2 3 4 PRINCIPL E OF UTMOST GOOD FAITH PRINCIPL E OF INSURAB LE INTERES T PRINCIPL E OF PROXIMA TE CAUSE PRINCIPLE OF INDEMNITY 5 6 PRINCIPLE OF CONTRIBUTIO N PRINCIPLE OF SUBROGATIO N *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF UTMOST GOOD FAITH LEGAL DUTY • The Proposer has a legal duty to disclose all material information about the subject matter of insurance to the Insurers who do not have this information. 1 MATERIAL INFORMATION COMMON LAW • It is that information which enables the Insurers to make an underwriting decision, that is the decision: • Whether to accept the risk • The rate of Premium & Terms & Conditions of acceptance • This is called the legal duty of utmost good faith arising under common law. • This duty applies not only to material facts which the proposer knows, but also extends to material facts which he ought to know. *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF INSURABLE INTEREST • Interest in the subject matter of Insurance ESSENTIALS TO INSURE 2 • Legal right on the subject matter insured. • Insured should STAND TO LOOSE at the time of loss. • There must be some property, right, interest, life, limb or potential liability capable of being insured. • The relationship between the insured & the subject matter of insurance must be recognized at law. *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF PROXIMATE CAUSE OF LOSS • The active efficient cause that sets in motion a train of events which bring about a result, without the intervention of any force started and working actively from a new and independent source. CHAIN OF EVENTS 3 • Resulting into a loss to the insured, without an entry of an independent source. *For Internal Circulation only. * Insurance is a subject matter of solicitation

KNOWLEDGE CHECK # 1 A person insured under a personal accident policy went out hunting and met with an accident. Due to shock and weakness, he was unable to walk. While lying on the wet ground he contracted cold which developed into pneumonia which caused his death? • Is the claim Payable? Verdict: • The court held that the proximate cause of death was the original accident and pneumonia (a disease which is not covered under the policy) only a remote cause. Hence the claim was payable. *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF INDEMNITY EXTENT OF LOSS • This means that the insurer will reimburse the insured person to the extent of the loss sustained but no further. • The object of this principle is to prevent persons making a profit from loss. MAXIMUM COMPENSATION 4 • Indemnity may be looked upon as financial compensation sufficient to place the insured in the same financial position after a loss as he enjoyed IMMEDIATELY before it occurred. *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF CONTRIBUTION OVER INSURANCE • This means that if the risk was over insured, either because the risk was over estimated, the goods had depreciated since effecting the policy or two policies covered the particular risk, the principle of indemnity still applies. MULTIPLE INSURANCE POLICIES 5 • Where two insurance policies from separate companies cover the same risk, and one company has fully compensated the insured, they are entitled to recover a proportion of the compensation from the other company. *For Internal Circulation only. * Insurance is a subject matter of solicitation

PRINCIPLE OF SUBROGATION Transfer of Rights from Insured to Insurer • Rights of ownership • Rights of recovery from Third Party 6 Note : Principle of subrogation and contribution do not apply to personal accident policies as Internal Circulation only. they are not contracts of Indemnity* Insurance is a*For subject matter of solicitation

MOTOR INSURANCE *For Internal Circulation only. * Insurance is a subject matter of solicitation

Motor Insurance Governance Motor Insurance is governed by motor vehicles act 1988, passed in 1939 The Act requires any motor vehicle plying in a public place to be compulsorily insured for third death, bodily injury & property damage. The policy of insurance should cover the liability incurred in respect of any one accident • In respect of death of or bodily injury of third party or passenger of a public service vehicle the amount of liability incurred (unlimited liability) • In respect of damage to any 3 rd party property damage. *For Internal Circulation only. * Insurance is a subject matter of solicitation

What is Motor Insurance & Why it is Important? • Motor Insurance is a contract between you and the insurance company wherein you pay a premium for a policy to protect your vehicle against damage, theft, Death or Injury in an accident & liability against third Party • In India Motor Insurance (Third Party Cover) is compulsory What is Private Car Type ? Vehicles used for social, domestic & pleasure purpose & professional purpose (excluding carriage of goods, other than sample. *For Internal Circulation only. * Insurance is a subject matter of solicitation

Types of Motor Insurance Private Car Two Wheelers Motor Cycle Scooters Commercial Vehicle Good Carrying Passenger Carrying Miscellaneous *For Internal Circulation only. * Insurance is a subject matter of solicitation

WHAT IS COVERED UNDER A MOTOR POLICY? COVERAGES OWN DAMAGE Personal Accident TP LIABILITY Insured Vehicle Accessories Bodily Injury & Death IDV Unlimited Property Damage TW : 1 Lac PV & CV: 7. 5 Lac Paid Driver Passenger Owner Driver Employees 2 Lac *For Internal Circulation only. * Insurance is a subject matter of solicitation

OWN DAMAGE COVERAGE • The company will indemnify the insured against loss or damage to the vehicle insured hereunder &/or its accessories whilst thereon Fire explosion, Selfignition, Lightning Burglary, housebreaking or theft Riot, Strike Earthquake (fire & Shock Damage) Flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost Damage due to an accidental external means Malicious act Terrorist activity Landslide, rockslide Damages occurring while in transit by road, rail, water, air, elevator *For Internal Circulation only. * Insurance is a subject matter of solicitation

TERMS USED IN MOTOR INSURANCE IDV (INSURED DECLARED VALUE) NCB (NO CLAIM BONUS) BREAK IN CASE DEPRECIATION *For Internal Circulation only. * Insurance is a subject matter of solicitation

HOW TO CALCULATE OWN DAMAGE ? Own Damage • • • IDV Cubic Capacity Geographical Zone Age of the Vehicle Premium Rate *For Internal Circulation only. * Insurance is a subject matter of solicitation

PREMIUM CALCULATION Own Damage 1. Find out the IDV a) Vehicle Own damage b) Accessories c) CNG/ LPG Kit 2. Apply Premium Rate to the IDV a) Age b) Zone c) Cubic Capacity 3. Calculate Own Damage Premium a) IDV X Rate 4. Deduct Discounts a) No Claim Bonus b) Voluntary Deductible Third Party Liability 1. TP Premium 2. PA Cover a) Owner Driver b) Un-named Passenger c) Paid Driver d) Employee Liability e) CNG/ LPG Liability 3. Any other additional Cover Own damage + TP Premium + GST = Final Premium *For Internal Circulation only. * Insurance is a subject matter of solicitation

GEOGRAPHICAL ZONE Zone A Mumbai Ahmedabad Chennai Kolkata Pune Bangalore Hyderabad Delhi Zone B REST OF INDIA The size of an engine is referred to as it's CUBIC CAPACITY. All the vehicles are broadly divided into 3 based on their CC § < 1, 000 cc § 1, 000 cc – 1, 500 cc § > 1, 500 cc *For Internal Circulation only. * Insurance is a subject matter of solicitation

THIRD PARTY PREMIUM : Private Car Upto 1000 cc • Rs 2055 1000 to 1500 cc • Rs 2863 Above 1500 cc • Rs 7890 *For Internal Circulation only. * Insurance is a subject matter of solicitation

Auto Secure: Private Car _ADD Ons Depreciation Reimbursement Repair of Glass, Fiber, Plastic & Rubber Parts Loss of Personal Belongings Engine Secure No Claim Bonus Protection Cover Emergency Transport & Hotel Expenses Daily Allowance Return To Invoice Key Replacement Courtesy/Hire Car Tyre Cover Consumable Expenses RSA *For Internal Circulation only. * Insurance is a subject matter of solicitation

Auto Secure USPs ü Avail Nil Depreciation Cover on all admissible Private Cars till Vehicle Age 7 Yrs ü No Salvage Deduction ü Why to Negotiate on IDV in Total Loss Claim !! ü In-house Motor Claims Survey In majority Claims By Qualified Automobile Engineers ü We draw our OWN estimates Its QUICKER & ACCURATE !! ü Huge Network of Direct Settlement Network 6 months warrantee ü Includes both Dealers & Multi Specialty Service Centers ü GREEN CHANNEL Settlement advantages !! ü No estimate of repairs required ü Easy Documentation - self attested copies of RC/DL (up to 50 K) accepted *For Internal Circulation only. * Insurance is a subject matter of solicitation

Knowledge Check #3 1. What are the USPs of Auto secure? 2. What are the coverage’s of OD & TP? *For Internal Circulation only. * Insurance is a subject matter of solicitation

Thank You