Motor Insurance Contract

8/8/2019 Motor Insurance Contract

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MOTOR INSURANCE CONTRACT

MOTOR INSURANCE

BURGLARY AND PERSONALACCIDENT INSURANCE

Motor insurance got recently a great momentum. In the older times,

persons, who were injured or killed through the negligence of the

motorists, could not get financial redress either to them or to their legal

heirs because no scheme of insurance was present at that time. To

mitigate the financial hardship caused to the persons, the Motor

Vehicles Act, 1939, as amended from time to time, has made it

compulsory for the motorists to insure against the risk of liability to

third parties.

The rate of premium is standardized because the business is tariff.

No insurer can charge lower rates than tire tariff rates and no insurer

can grant benefits exceeding than those prescribed by the tariff.

Vehicles for the purpose of insurance are classified as below:

(i) Private Cars (not used for carrying passengers for hire or

reward).

(ii) Commercial vehicles such as goods carrying vehicles,

passenger vehicles, tractors and others.

(iii) Motor cycles, scooters and auto cycles.

KINDS OF POLICIES

The policies under motor insurance are as follows:-

(i) Act Liability only.


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(ii) Third Party only.

(iii) Comprehensive Policy.

1. Act Policies

This policy is designed to meet the requirements of Motor Vehicles

Act, 1939, which provides for compulsory insurance in regard to

liabilities arising out of use of motor vehicles in a public place. This

kind of policy is limited to bodily injury or death of the third parties.

Section 95 (2) of the Motor Vehicles Act lays down that a policy of

insurance shall cover any liability incurred in respect of any one

accident up to the following limits:

(i) Goods Vehicle: Rs. 50,000 in all includes the liabilities if

arising under the W.C. Act, 1923, in respect of death of or bodily

injury to employees (other than the driver) not exceeding six in number

being carried in the vehicle. This means that liabilities if any towards

driver and employees (above six) being carried in the vehicle under

W.C. Act in addition to Rs. 50,000.

(ii) Passenger Vehicles: Vehicles in which passengers are carried

(a) For hire or reward.

(b)By reason of or in pursuance of contract of employment.

(1) in respect of persons other than passengers carried for hire

or reward-Rs. 50,000 in all.

(2) in respect of passengers-

Rs. 50,000 in all where the vehicle is registered to carry not more

than 30 passengers;


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Rs, 75,000 in all where the vehicle is registered to carry not less

than 30 but not more than 60 passengers;

Rs. 1, 00,000 in all where the vehicles are registered to carry

more than 60 passengers; and

Subject to the limit aforesaid Rs. 10,000 for each individual

passenger where the vehicle is a motor car (used to carry not more

than 6 passengers excluding the driver) and Rs. 5,000 for each in-

dividual passenger in any other case.

(iii) Other Vehicles: The amount of liability incurred except as

provided otherwise.

The Act policy besides the cover as required under the Motor

Vehicles Act provides for indemnification of the claimants' costs and

expenses which the insured shall become legally liable to pay as also

costs and expenses incurred with the written consent of the insurer.

The policy may extend to indemnify any driver who is driving the

motor vehicles on the Insured's order or with his permission provided,

he is not entitled to indemnify under any other policy.

2. Third Party Policy

This policy covers the liabilities of the third parties who suffered

loss in connection with the damage of property and personal injury or

death. Thus, this policy indemnifies the insured against his legal

liability in respect of damage to property of third parties over and

above Rs. 2,000, The

limit of liability is as follows :

(a)Private Car-Unlimited.

(b)Commercial Vehicle:


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(i) Goods or passenger-carrying vehicles-Rs. 20,000.

(ii) Other miscellaneous or special type of vehicles-Rs,

50,000.

Motor cycle-Unlimited.

The policy may be extended to include:

(a)fire,

(b) theft risks, ----

(c) Legal liabilities to persons employed in connection with the

operation and/or maintenance and/or loading and/or unloading

of motor vehicles. .

*

The private car policy extends to indemnify the insured (individualonly) against legal liabilities incurred by him subject to limitations of

indemnity whilst personally driving a private motor car. Private car

policy covers legal liability of the insured to passengers (not for hire

or reward) in the car although under the passengers (not for hire or

reward) in the car although under the Motor Vehicles Act, it is not

required to be covered. Liabilities arising while the motor car is being

used in private places are covered. The policy covers bodily injury or

death, property damage and medical expenses. Due to the

amendment to the Motor Vehicles Act, 1994, liability on third party

claims has gone up as 'No fault' liability compensation has been

enhanced and Structured Compensation has been introduced.

3. Comprehensive Policy


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The comprehensive policy covers the following risks :

1. Damage to car parts or body.

2. Removal charges for repairs.

3. Third Party Liabilities.

4. Costs and Expenses incurred with risk.

5. Repair Charges.

6. Medical expenses.

At the payment of extra premiums, the following risks are also

insured:

(i) Death or injury to family members who are above 16

years and below 65 years,

(ii) Riots, strikes, thefts, larceny, etc.

(iii) Loss of Rugs.

Jald Rahat Yojna (Pre-litigation Settlements) has been introduced

to help claimants to get payment of compensations without

approaching courts. Structured Compensation formula has been used

for quick settlements of claims.

PROCEDURES OF INSURANCE

The proposal form is completed for making proposal for motor

insurance. The form is divided into three parts

(i) Identification of vehiclesregistered number, horse-power,

shape and size, model, etc.

(ii) Risk-informationpast insurance, type of policy got

previously, equipments, vehicles.

(iii)DeclarationThe declaration of true and full statement of

the questions is made at the end of the policy.


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Rating the Motor Insurance

Since the motor insurance is subject to tariff, basic premium is

determined by the tariff association. Additional premium is added to

the basic premium on the basis of shape, size, horse power, use, value

of the motor car, etc. The higher the risk, the more will be the amount of

premium. Rebate in premium is allowed if the insured has more than

one car, is a member of Automobile Association and there was no loss

in the previous years. The car was under the personal use and care of

the owner.

Issue of Policy

As soon as the proposal form is accepted, cover note is issued.

The cover note is a certificate of insurance although it cannot be used

as a proof of insurance in a court of law. As soon as the policy is

issued, the cover note is cancelled.

Term of Insurance

The motor insurance policy is issued generally for one year.

However, the policy can be issued for less than one year but the

premium rate will be higher, e.g., the premium rate is three-fourths of

annual premium of the policy issued for six months.

Additions of Benefits

During the currency of policy, after payment of extra-premium

additional benefits can be added

to the original policy. Thus additional risks can be included to the

original policy.


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Change of Vehicle

The insured vehicles can be disposed of along with the policy. The

term of policy will remain the same. The policy will continue up to the

unexpired period with the purchaser of the car. Similarly the insured

can replace another car under the same policy.

Furlough Concessions

When risk is reduced, the proportionate share of premium is

returned or the period of coverage is extended by the excess premium.

This is called 'furlough concessions'.

Settlement of Claims As soon as the damage occurs, notice of that is given to the insurer.

The evidence or eyewitness should be placed to the insurer. When the

insurer is satisfied with the notice and evidence, he can issue claim

form which is returned to the insured after completing it in all respects.

Personal injury is also made in connection with the personal injury,

damage to property, defence and prosecution.

Negligence of the Parties

1

The insurer will pay the amount of liability only when the insured

is at negligence. In other words, the insurer shall pay only when the

insured not legally liable for indemnification to third party.

Knock for Knock Agreement

This clause says that the liability of the insurers will be limited

only to the liability to the insured. In this case the third party

liabilities do not arise.


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Halving Agreement

Under this agreement the loss of both partners (insured) and third

party and is equally divided amongst the insurer.

Private Car

Cover is granted against the loss of or damage to motor car and its

accessories whilst thereon,

anywhere in India, caused by any of the following perils:

: Accidental, external means

1. Fire

3. External explosion

4. Self-ignition

5. Lighting .

6. Frost

7. Burglary, house breaking or theft, and

8. Malicious act.

The cover is also operative whilst the car is in transit by road, rail, in

land, waterway, lift or elevator.

The following are excluded,

(0 Consequential loss;

(ii) Depreciation;

(Hi) Wear and tear; and

(iv) Mechanical or electrical breakdowns, failures or breakages.

Damage to tyres is ordinarily not payable. If, however, the insured

car is also damaged at the Isame time, the damage to tyres is payable

but the amount payable in that event is limited to 50% of (the cost of


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replacement of the tyres. The exclusion applies to damage to tyres and,

therefore, losses lof tyre due to theft is payable.

If the motor car is disabled as a result of damage covered by the

Policy, the insurers bear a (reasonable cost of protecting the car and

removing it to the nearest repairs, as also of redelivery to pe insured.

The amount so borne by the insurers is limited to Rs. 150 in respect of

anyone accident.

Normally, repairs arising out of damage covered by the policy can

be carried out only after [they are authorised by the insurers. In terms

of this section of comprehensive policy, the insured [may authorise

the repair to the car provided that

(a) the estimated cost of such repair does not exceed Rs. 300;

(b) the insurers are furnished forthwith a detailed estimate of the

cost; and

(c) the insured gives the insurers every assistance to ensure that

such repair is necessary and

that the charge is reasonable.

Section II

It provides for the cover in respect of liability to the third parties.

[Section III

If any bodily injury is caused to the isured or to any occupant of the

motor car by violent accidental, external and visible means as the direct

result of an accident to the motor car, and if the Insured incur medical

expenses for the treatment of such injury, the medical expenses

reasonably Incurred by the insured in this behalf are reimbursed to him,

subject to a limit of Rs. 350 in respect of lay accident. A notable feature


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of this provision is that insured car must meet an accident in order to

attract the benefit.

General ExceptionsThe insurer is not liable under the policy in respect of

1) Any accident, loss, damage and liability caused, sustained or

incurred outside the Geographical area specified in the schedule of the

policy, i.e., India. On request it can be extended to Nepal, Sikkim lad

Bhutan.

2) Any claim arising out of any contractual liability. If, however,

the liability arises independent 9f the contract, the claim is payable.

3) Any claim arising whilst the vehicle is being:

a. Used otherwise than in accordance with the limitations as to

use specified in the schedule of the policy; or

b. Driven by any person other than a driver described in the

schedule of the policy.

4) Any claim arising after any variation in or termination of the

insured's interest in the vehicles.

5) Any claim directly or indirectly arising from

Ionizing, radiations or contamination by radio-

activity from any nuclear waste from the combustion of

nuclear fuel.

Nuclear weapons material.

Flood, typhoon, hurricane, volcanic eruption,


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earthquakes or other convulsions of nature.

War, invasion act of foreign enemies, hostilities

or war-like operations, civil war, strike, riot, civil

commotion, invasion, rebellion, military or usurped

power.

Driving of the car under the influence of

intoxicating liquor or drugs.

6) This does not cover use for hire or reward or gaining, pace-

making, reliability trial, speed testing, the carriage of goods

(other than samples) in connection with any trade or business or

use for any purpose in connection with motor trade.

Extra Benefits

The policy may be extended to cover the following extra-benefits on

payment of additional premium:

1) Accidents to insured or any named person (not less than 16 not

more than 65 years of age) other than a paid driver or cleaner. This

provide for specified scale of benefits in the nature of personal

accident cover.

2) Accidents to insured and wife. Benefits and limits are similar to(i) above. In the event of both the insured and his wife being in

the same car at the time of an accident the benefits will apply to

insured and his wife to the extent of 50% only.

3) Accidents to unnamed passenger other than insured and his paid

driver or cleaner. The benefits and age limits are similar to (i)


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above.

4) The legal liabilities to employees of the insured who may be

traveling in or driving the employer's car (other than paid

drivers).

5) Business use by fellow employers. The policy extends to

include use by persons other than insured for the business of the

insured's employer and to indemnify such person. The additional

premium depends upon whether use of one named person or

use by unnamed is desired.

6) Accident to Soldiers/sailors/airmen employed as by officers in

their private capacity.

7) Trailers: Trailers may not be the insured separately and the

cover on the trailers must correspond to the cover on the car.

8) Riot and strikes.

9) Earthquake (fire and damage).

10) Flood, inundation, typhoon and hurricane.

11) Rugs, coats and luggage.

12) Legal liability of passengers for acts of negligence; and

13)Reliability trials and rallies.

Commercial Vehicles

The following points of difference between this policy and private car policy

comprehensive policy should be noted :

(a) Loss of or damage to the vehicle and its accessories whilst

thereon is not covered.


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(ii) If loss or damage is due to overloading or strain or by

explosion of the boiler or the motor vehicle.

(b) Loss or damage to accessories whilst on the vehicle is covered

against the risk of burglary, house-breaking or theft only if the vehicle

is stolen at the same time.

(c) The insured can authorise repairs if estimated cost of repairs

does not exceed Rs. 150 (against Rs. 300 in the case of Private Car).

(d) There is a compulsory excess for each and every claim in

respect of goods carrying vehicles, taxis or private car type vehicles plying

for public hire and public passenger service vehicles, buses and

motorised rickshaws.

(e) Loss of or damage to tyres, lamps, bumpers, mudguards and

painting of vehicles is not covered except in case of total loss.

Application of limit of Indemnity

It is provided that if out of an accident indemnity is available to

more than one person the limit of indemnity prescribed by the policy

applied to the total of the amounts payable to all eligible persons and if

the limit is less than the total of the amounts due, the insured will have

priority in indemnification. For example, if an indemnity of Rs. 40,000 is

due to the insured and of Rs. 20,000 to some other person against a limit

of Rs. 50,000 under the policy, the insured will be paid Rs. 40,000 first

and only the balance of Rs. 10.000 will be paid to the other person.

Motor Cycle

Under this policy, following points should be noted:

(i) The cost of removal, etc., in one event of an accident is limited to

Rs. 50;


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(ii) The amount up to which the insured is authorised to repair is

specified at Rs. 50; and

(iii) The policies covering motor scooters are made subject to an

excess of Rs. 50 for each and every claim.

The liability in respect of death or bodily injury to any person being

conveyed in or on the motor cycle is excluded. Such liability is, however,

covered if the said person is being conveyed by reason of or in pursuance

of a contract of employment in terms, and subject to, limitation of

indemnity. Under this section the insured individual is indemnified

whilst personally driving a motor cycle not belonging to him and not

hired to him under a Hire Purchase System. The extension, however, is

not available for policies issued .in respect of auto-cycles or

mechanically assisted pedal cycles.

Extra Benefits

The following extra benefits may be granted on payment ofadditional premium:

(a) increase in the limit of indemnity for liability to public risks

can be effected;

(b) full liability under Workmen's Compensation Act, 1923, Indian

Fatal Accidents Act or at Common Law for accidents to paid driver,

cleaner or conductor can be covered on payment of extra annual

premium per head of Rs. 5; and

(c) in the case of vehicles plying for hire(i) legal liability for

loss or damage to goods caused by accident whilst being conveyed on

the insured vehicle can be covered; (ii) Fire risk whilst vehicle is

garage can be covered.


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Underwriting Considerations

Relating to the insured and driver: The insured himself presents a

great hazard in Motor insurance; he is likely to be the principal driver,

particularly in private cars. Besides he will have a good deal of

influence in the selection of other drivers. If the insured is a firm, the

underwriter may have to examine the policy of the proposed firm in

the matter of selection of drivers.

The business or profession of the insured is another important

consideration, because this would show how, where and to what

extent the vehicle will be used.

The nationality of the proposer is an underwriting consideration

because

(i) Foreigners are not accustomed to the local road and traffic

conditions ;

(ii) It is not always possible to ascertain their (insurer) history

and driving experience;

(iii) In the event of an accident, they may not be available when

they are required as witnesses for their own defence; and

(iv) Language difficulties may make them unsatisfactory

witnesses.

Age of the driver is also important as very young persons are prone

to accident as well as very old persons. The physical condition of the

driver should also be considered when underwriting the risk. All

convictions for drivig offences are also material facts and must be

reported to the insurers. The underwriter may ignore a series of

convictions for minor offences but may take serious note of a single

conviction for a major and dangerous offence. Drunken drivers have


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always been posing a serious problems to the underwriters;

After examining the proposal and assessing the risk, the

underwriter will decide on any one or more of the following lines:

(i) accept the risk at normal terms,

(ii) increase the premium,

(iii) impose a compulsory excess in respect of each and every loss,

under one or more sections of the policy,

(iv) restrict the cover to third party, fire and theft risk only,

(v) restrict the cover to third party risk only,

(vi) restrictthe cover to act liability only, and

(vii) decline the risk. The declinature is, however, resorted to in

exceptional circumstances only.

Burglary Insurance

Burglary Insurance is one of the major classes of business

underwritten in the miscellaneous department and accounts for a

sizeable portion of the department's premium income. For the

business house Burglary insurance is as essential as Fire

insurance, as it enables them to recoup the losses suffered by


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them consequnt on burglary or house breaking. In addition to the

burglary policy, oth-jr types of policies giving wider covers have

also been devised by the burglary department.

The main types of policies

are as follows

(i) Business Premises

Policy, (ii) Private

Dwelling Policy,

(v) Money in Transit

Policy

Definitions Burglary

The criminal law of the country does not speak of an offence called

burglary. Hence it becomes necessary for the insurers to lay down in the

policy the definition of the term. As normally understood burglary is

(a) Theft of property from the premises following upon entry of the said

premises by violent and forcible means, or

(b) Theft by a person in the premises who subsequently breaks out by

violent and forcible means.

Theft

Indian Penal Code in Section 378 defines theft as follows: "whoever

intending to take dishonestly any movable property out of the possession

of any person without the consent of that person or of any person having

for that purpose authority, moves that property in order to such taking is

said to commit theft."


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House-breaking

The word in practice is equal to 'Burglary'. Section 445 of the Indian

Penal Code has laid down a definition of the term. A person is said to

commit housebreaking who commits house trespass if he effects his

entrance into the house (or any part of it), or if being in the house (or any

part of it) for the purpose of committing an offence, or having bmmitted

an offence therein he quits the house, such entrance or exit being made by

use of force in one of the six ways as described in the Indian Penal Code.

Coverage

Business premises are generally covered against burglary and house

breaking only. Mere theft

without the use offeree and violence is not covered, robbery and dacoity

being aggravated forms of

theft. Burglary and house breaking fall within the scope of this cover.

Under policies issued for

private dwellings, the contents are covered against burglary, house-breaking

and theft risks. Similarly

jewellery and valuables are also insured in the same manner.___

Money in transit

Policies, as a matter of rule, cover robbery, hold-up and dacoity in

addition to burglary, housebreaking and theft.

Business Premises Insurance Policies

Policies issued to business premises cover stock-in-trade, goods in

trust or on commission, fixtures and fittings, tools of trade such as

typewriters, calculators and other similar property and cash and currency

notes in locked safe against the risk of burglary and house-breakiijg. In


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regard to stock-in-trade and other goods the policy may be issued on full

value basis or on "first loss" basis.

A "First Loss"Policy insures the property up to a specified amount

only which is calculated tc

be the maximum likely loss on any one occasion. This type of policy

is taken where a total loss is s I physical impossibility. First loss

policies are usually taken for bulk commodities. 1'he amount insurec I

is always specified as a certain percentage of the full value, say, 10%

or 12.5% of the full value.

The amount of premium-loss reinsurance was Rs. 16.60 crores by

New India in 1994-95. It has

got profit of Rs. 12.12 crores in that year.

All Risks (Jewellery and Valuables) Insurance

Policies under this form of insurance cover risks in respect of

jewellery, plate, watches, personal

ornaments and other valuables. Loss or damage by any accident or

misfortune including fire, theft. I robbery from the person, defective

settings or fastening and. accidental damage are thus covered, I The

policies do not, however, cover loss or damage:

(i) occasioned by or in consequence of war, invasion, act of

foreign enemy, hostilities, civil

war, nuting, rebellion, revolution, insurrection, military or usurped

power, riot, civil commotion, I earthquake or other convulsions of

nature;

(ii) caused by or arising from any process of repairing,

restoring or, renovating any property


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insured;

(iii) due to moth, wildew, wear or other deterioration or inherent

defect in any property

insured. The insurance is applicable in all places within the

geographical limits provided for in the I policy.

Exceptions

The exceptions peculiar to a burglary (business premises) policy

are>

(i) loss or damage where any member of the insured's house-

hold or his business staff is

concerned as principa 1 or accessory or resulting from any act

committed by any other person lawfully on the premises wherein the

property may happen to be;

(ii) loss or damage which can be insured against by a fire or a

gross or a motor insurance

policy;

(iii) loss of or damage to deeds, bonds, bills of exchange,

promissory notes, cash, treasury,

bank notes, cheques, securities for money, stamps, stamp collections,

books of accounts, manuscripts, [ documents of any kind and medals

and coins, unless specially mentioned and agreed to be covered.

Extension Under the Policy

An extension of the policy frequently sought is in respect of riot

and strike damage which is a common exclusion in all policies. Riot

as included in the policy is deemed to mean riot as defined in the

Indian Penal Code.


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Insurance of Money in Transit

This is a modified version of Burglary Insurance covering money

or securities in transit between the insured's premises and bank or

post office or other specified place or between the insured's (main)

premises and branch premises. The cover is granted only to

commercial and industrial establishments.

The coverage of money in transit policy

is as below :

(a) Wages in transit from bank to insured's premises.

(b) Cash in transit from insured's premises to post office for

purchase of postal orders, money orders and postage QT Revenue

Stamps.

(c) Postal orders, money orders and postage or revenue stamps in

transit from Post Office to insured premises.

(d) Wages in transit from the insured's (main) premises to insured

branch premises.

(e) Cash other than wages in transit from Bank to insured's

premises from insured's to bank and between insured's premises and

the insured's branch premises.

(f) Cheques, bills of exchange, money orders and postal orders in

transit from the insured's premises to bank.

(g) Cash collected by employees from the time of collection during

rounds and until delivered at the insured's premises or bank on the day

of collection.

(h) Cash (other than wages) secured in locked safe when

insured's premises or closed.

(i) Cash (other than wages) contained in the insured's premises


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whilst occupied for business

purposes. .

In a money-in-transit policy, two sums are significant:

(i) Limit of the insurer's liability for any one loss; and (ii)

Estimated amount in transit during the year.

Extension (Infidelity of employees)

The normal policy does not cover loss to the insured arising

through the acts of dishonesty by

the employees entrusted with the carrying of the money. The policy is

extended at additional

premimum to cover any loss to the insured of the property insured by

any act of fraud or dishonesty

committed by the employees or employees carrying the property. This

is known as 'Infidelity

Extension'.

PERSONAL ACCIDENT INSURANCE

Introduction

Personal accident insurance is one of the popular classes of

accident insurance and as a supplement to life insurance, it provides an

ideal protection against death or disability. Though the majority of the

policies still issued are to individuals, it has found favour with

employers who offer personal accident insurance benefits as a part of

the service benefits to their employees.

Due to rapid industrialization, and more and more use of

complex machinery, industrial accidents are more frequent. To cater to

the varying and increasing needs, different forms of cover are


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available. Individuals are granted this cover under an individual

personal accident insurance policy. For a group of individuals, the

insurers have devised a group personal accident insurance policy.

Coverage

Personal accident policy provides for specific benefits of insured

person suffering injury, resulting in death or disablement arising solely

and directly from an accident caused by violent external and visible

means. The bodily injury within twelve calendar months (period

varies) from occurrence thereof shall solely and directly cause or result

in

1. Death,

2. Loss by Physical Separation at or above the wrist or ankle of-

(i) both hands or feet or one hand and one foot (known as loss

of limbs).

(ii) complete and irrecoverable loss of sight in both eyes.

(iii) loss of one limb and complete and irrecoverable loss of

sight in one eye.

In these above cases capital sum insured is given.

(iv) loss of one limb or complete and recoverable loss of sight

of one eye-in this regard

50% of capital sum insured.

3. Temporary total disablement-in this respect 33% of capital

sum insured, maximum Rs.

500 per week.

features of the Policy

1. The maximum liability of the insurer is the capital sum


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insured.

2. The amount of the claim is payable to the insured person or his

legal representative in case of death. Appointment of nominee is

desirable.

3. No weekly compensation shall become payable, until total amount

shall have been ascertained and agreed.

4. Personal accidents cover (other than coupon insurance) with

another insurer must be within heknowledge and written permission

of the insurer or else policy becomes void.

5. Age limits between 16 and 25 years. The upper age limit may be

relaxed in certain cases In merit.

Rating

The rate of premium to be charged depends mainly on the type of

cover desired and the insured Person's occupation. This is a non-tariff

business. The rates of premium charged by the various Insurers for

the same risk may, therefore, vary. The proposal and the policy forms

used by the arious insurers also differ widely. The rates are usually

charged per mile of the capital sum insured by the policy.

Extensions of Policy (Motor cycling)

In most parts of India, motor cycling and scooter riding have become

so common that if iccidents arising out using them are not covered, the

policy is hardly of any practical significance, piost of the insurers are,

therefore, willing to grant cover against these risks with or without

additional premium.

Exceptions


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1. War and kindered risk, riot, strike and civil commotion or

Intentional self-injury whether friminal or not.

2. Injury sustained whilst the insured person is under influence of

intoxicants or is suffering

fOm insanity. -

3. Injury occasioned by or contributed to by venereal disease or

pregnancy.

4. Flying for the purpose of any trade of technical operation or as a

member of an aircrew or any other aerial activities.

5. Hunting, stable-chasing, racing of any kind (other than one foot),

rugby, football, polo, motor cycling or winter sports, underwater pastime

or pot-holding except in so far as the company have by endorsement

agreed to extend the insurance.

Classification of Occupations

Profession or occupation is an important factor to guide the underwriter

as regards assessment of risk in each case and consequently it stands to

serve as the basis of rating. A representative classification is given as

under:

Class I Accountants, Bankers, Member of Legal and Medical Pro-

fession, teachers, consulting engineers, mercantile

assistants and those engagd in executive, administrative,

etc.,duties.

Class II Architects, engineers (Superintendents) only, Planters,

Salesmen and master tradesmen who supervise but do not

do manual work.


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Class III Engineer (superintending and working), engineering

contractors engaged in manual work not involving unusual

hazards.

Class IV Any occupation involving unusual hazards.

It is not possible to give an exhaustive list and the classification

given above is only indicative of the considerations involved.

Personal Accident and Specified Diseases Insurance

In addition to the death and disablement arising oufoof accidental

bodily injury, insurance may also provide for benefits for dis-ablementarising out of specified diseases. This is provided by issuing personal

accident and specified diseases insurance policies. These policies contain

the usual personal accident.

Extensions

Certain diseases like maleria, influenza, etc., which are not included

in the list of diseases specified in the policy, can be included within the

scope of the cover afforded by the policy, on payment of additional

premium. The additional premium is usually charged @ 0.1 % of the

Capital sum insured for each additional disease included.

Underwriting Consideration

Underwriting involves the selection of risks for insurance. Based on the

information collected,

the underwriter has to decide to accept, particular risk and if he decides to

accept, at what premium

and on what terms. In fulfilling this task in respect of personal accident


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insurance the underwriter is

guided broadly by the following considerations:

(i) age of the insured person;

(ii)health and physical build of the insured person;.

(iii) occupation of the insured person;

(iv) other pursuits of the insured person; and

(v) medical history and family history in case

cover is extended to diseases.


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Motor Insurance Contract

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Transcript of Motor Insurance Contract