We all are well prepared to get our vehicle insurance renewed every year. The renewals or fresh vehicle insurance are being done by most of us just to avoid penalties being imposed by the traffic authorities. What if we are hurt or lose our lives due to accidental fires whether in temples or educational institutions or residential complexes or anywhere else? The only alternative is to take adequate life coverage from the insurance companies.
Insurance enables risk transfer from the beneficiary to the insurance company, which undertakes to indemnify the insured for the financial loss suffered due to accidental death, loss of limb.
Generally people know that the fire insurance covers only fire whereas this is not the case. The insurance companies offer ‘Standard Fire & Special Perils Policy’ and just Fire Insurance. This policy not only includes accidental fire but also covers lightening, explosion and implosion, impact damage, aircraft damage, RSMD (riot, strike, malicious and terrorism damage), subsidence and landslide including rock slide, missile testing operations, leakage from automatic sprinkler installations, bush fire. All these coverage are in built.
Add on covers like STFI (storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation), earthquake etc. can be taken by paying additional premium apart from the base premium.
For dwelling units, long-term policies can be taken up to ten years. There are two methods for availing long-term policies.
Method A: Premium will be charged in full without any discount. However, sum insured under this policy shall be deemed to have increased by 10% of the original sum insured at the end of every 12 months period.
Method B: There shall not be any automatic increase in sum insured as in Method A. However, appropriate discounts shall be allowable on applicable gross premium up to 50%.
Public Liability: Since it is for the building or canopy, insurance companies will compensate for the building or canopy and the contents that have been lost, and not for the human lives. Human lives can be covered only after having an additional Public Liability policy. It will indemnify the insured against all the sums which the insured shall become legally liable to pay in the event of: -
Accidental bodily injury to any person and it would include fatal injuries too. Even nervous shock, which is not in the nature of a physical injury, is with in the expression. Illness is also embraced by the expression. Some policies make specific reference to these types of injuries to make position abundantly clear.
Policies issued under this agreement, all sums which the insured becomes legally liable to pay as damages to third party in respect of accidental death / bodily injury / and loss of or damage to property arising out of claims against the insured during the policy period including legal costs and expenses incurred with prior consent of insurers, subject always to the limits of indemnity and other terms, conditions and exceptions of the policy. Premium will depend on the indemnity taken by the insured.
Personal Accident: This policy is suitable for individuals like professionals, executives, administrative staff etc. Policy pays the sum insured in the event of unfortunate death/ permanent total or partial disability due to accident.
Addition to this compensation is given by the insurer @ 1% of sum insured (Max Rs 5,000) for every week of temporary total disability.
This policy is given along with Road Safety Policy, which provides medical expenses coverage due to accident up to Rs 1 lakh. Premiums are very small. Total combo premium is approximately Rs 1,100.00 + applicable taxes per annum per employee (sum assured: Rs 6 lakh).
To sum up, in my opinion institutional insurance must be in combination of ‘Standard Fire and Special Perils Policy’ and ‘Public Liability Policy” in order to cover un-named human lives too. Whereas in residential buildings it must be in combination of ‘Long-term Policy for Dwellings’ and ‘Personal Accident Policy’ in order to cover family members lives by name.
(The writer is a certified professional financial advisor & senior insurance consultant)