Insurance Loans24: INSURANCE

HISTORY OF MOTOR INSURANCE

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 Motor insurance was
first launched  in U. K.. The first car
was manufactured  in 1984and the first
motor insurance  policy was issued  in 1985. It covered liabilities  to third party. In 1889, accidental damage to
car in 1901 burglary and
fire were added. Thus the progress made is found is in comprehensive policy of
today. In 1903, the car and General Insurance Corporation Ltd. Was started and
many companies  were started later. After
World war, number  of card and car
accidents increased. The victims of the car accidents  were not given any compensations. So the
third party insurance was made mandatory (The Road Traffic Act 1930, 1934, and
1969)  (In Motor Vehicles)  Act was enacted  in 1939. The act was the same as that of U.
K. The only differences 
is that in U. K. tariff is withdrawn, but India’s tariff governs
the  insurance.<br />
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FUNDAMENTAL PRINCIPALS OF MOTOR INSURANCE</div>
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The basic principals 
applicable to motor  insurance are
the same as they are  in property and liability  insurance. But the applications of these
principles  to automobile  insurance is accepted  as a specialised  problem requiring a special contract. However
let us recall the principles below in brief: (1) Utmost good faith: Motor  insurance contracts are contracts of utmost
good faith . The proposer is liable to disclose all the material facts
relating  to the motor vehicle  to insurer. For this purpose the proposer is
a given a proposal  from and he is asked
to give answers for all the questions asked in it. The answers  given by the proposer  becomes warranties or promises. So the
answers  must be true to the language and
must  be correct. Any incorrect answer 
on any matter will make the contract viodable. Some examples  of material facts are: the type of vehicle,
the geographical  area of use, the
physical health  of driver the driving
history, traffic convictions and post loss experience etc. Many of these
provisions are now regulated by motor vehicle Act 1939 </div>
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. (2)
INSURABLE INTEREST: It refers to legal right to insure. The essentials of
insurable interest are: (a) Existence of motor vehicle exposed   to damage or liability : (b) such motor
vehicle must be the subject matter of insurance: and ( C ) the insured must be
in such a position that he shall suffer by loss or damage or benefit by the
safety of the motor vehicle. Generally the following parties are expected to
have a</div>
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n insurable 
interest.  (a)  INSURED: As a owner of vehicle the insured
suffers a loss if his vehicle is damaged or from a legal liability to
third  party who suffers a loss for his
negligence. (B) OTHER THAN INSURED:  The
driver of the vehicle may create liability for insured. In effect, the insured
becomes the agent for the drivers and insured indemnifies him.  ( C ) FINANCIER: In hire purchase agreement,
the financier’s interest is insurable. In case the vehicle  is lost 
or damaged, the financier can get compensation. <br />
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(d) MOTOR TRADER: The garage proprietors as bailees have
insurable interest for customer’s loss or damage.  (3) INDEMNITY: The objects of this principle
is to place the insured after a loss in the same financial position as far as
possible, as he occupied immediately 
before the loss. The effect of this principle is to prevent the insured
from making a profit out of his loss or gaining any benefits or advantage.
Accordingly  to this principle, the
insurer is liable to pay the actual value of loss or sum insured whichever is
less in case of total loss to insured. If old parts are replaced by new a
suitable depreciation is charged on new parts. Insurer may repair or replace or
pay cash as it likes. Liability to third party is limited to policy sum Legal costs are also indemnified. </div>
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(4) SUBROGATION AND CONTRIBUTION: Subrogation is transfer of rights and remedies of the insured to the insurer who has
indemnified the insured  in respect of
the loss. It arises only when the third party is responsible for damage.
Insurer may exercise the insured’s right to recover damages. Generally they the
right arises after payment of damage. Contributions  refers to sharing of damage between
co-insurers. It is done in the proportion 
the insurer’s share bears to total sum of all insurers</div>
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(5) PROXIMATE CAUSE: The insurers are liable to pay  compensations only if loss is caused  by a peril most proximate or the nearest to damage and if it is insured
against. It is applicable to third party claims also.</div>
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HISTORY OF MOTOR INSURANCE

Motor insurance was first launched in U. K.. The first car was manufactured in 1984and the first motor insurance policy was issued in...

MISCELLANEOUS INSURANCE

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MISCELLANEOUS INSURANCE</div>
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Introduction : 
Insurance not falling under fire insurance and marine  insurance is considered as miscellaneous  insurance as per the insurance. Act 1938. The
four public sector general insurance companies and some private general insurance
companies have brought to light a number of miscellaneous insurance policies is
cover a variety of other risks. The most important  forms of miscellaneous insurance are: Motor insurance, Legal liability insurance, Business
insurance, Hospitalisation insurance, Social sector insurance, Engineering
insurance,  Rural insurance,  and other insurance. Let us discuss all
these  insurances, one by one in the
pages to come</div>
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. 1. MOTOR INSURANCE : The owner of a motor vehicle  is exposed to various types of risks. These
risks fall into two groups. First those of damage to , or loss or destruction
of the motor  vehicle  itself and second, that of being called upon
to pay damages for injuries which may be done to others through  the use, ownerships  or maintenance of the motor vehicle. The
first</div>
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or risk  may further
be classified as follows: </div>
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(1) Destruction by 
fire, internal or external in origin, </div>
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(2) Theft, </div>
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(3) Injury through collision with some other object moving
or fixed or through upset.</div>
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 (4) Other damages to motor  vehicles as by breakage of glass, damage in
flood, or while being transported. The second type of risk  is the liability
of the insured to third parties arising out of a accidents caused by the use of
a motor vehicle on the road. The liability may be for death  or bodily injury or for damages to property.
The risk also vary accordingly  to the
class of vehicle. E. g. in a passenger automobile. the liability may be for
death  of or injury  to
passengers  or in a common carrier, the
liability may be loss of or damage to the property carried. In order to
safeguard  the owner of a motor vehicle
from the above mentioned risks a special insurance,</div>
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MISCELLANEOUS INSURANCE

MISCELLANEOUS INSURANCE Introduction : Insurance not falling under fire insurance and marine insurance is considered as miscellaneous ...

LIFE INSURANCE PRODUCTS OR POLICIES

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As mentioned
earlier  in the  life insurance 
industry, apart from LIC India Several private companies are also
involved  in selling  life policies to general public living in
different corners of our country. The policies of private players have already
been given in the previous chapter. The policies of LIC of India have great
have been grouped under the following nine major  heads.<br />
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1) Whole life policies. 2)  Endowment policies  3) Children’s policies 4)  Joint life policy  5) women’s policy 6) Term policies  7) Special policies  8) Group insurance policies  9) Pension policies.   </div>
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(1) whole life policies:  </div>
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The risk is covered for the entire of the policy holder which
is why they are known as whole life policies. They policy amount and the bonus
are payable only to the nominee or the beneficiary upon the death of the policy
holder. The policy holder is not entitled to any money during his or her own
life time i.e., there is no survival benefit. This represents a  serious drawback in the case of whole life
policies for they go on covering a policy holder’s life even after his life has no
further economic  value for others. One
the other hand   a policy holder would
probably require  the money for himself  and his spouse during  retired life but this would not be possible
since the sum assured is payable  only
when the   policy holder dies. In his
sense whole life  policy  are fairly 
rigid and suitable  only in a few
very specific cases. The important  whole
life  policies offered by LIC of India
are as follows:<br />
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 1)  Single 
premium whole life plan No.8: Under this 
policy  the total  amount of premium payable is paid in one
lumpsum by the assured. The time element is the predominating feature and
protection element  is substantially less
than the face value of the  policy .
The  policy  is not so 
popular but is purchased for investment 
purpose. It suits those persons who get windfall income like lotteries
etc. and who can afford such single payment. The minimum sum assured is Rs.
20,000 and there is no limit  maximum sum
assured.</div>
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(2) Convertible whole life plan No-27: 
This  policy  is suitable to young man who is on the thresh
hold  of his career and has prospects of
increase in income after some times. The object of  this is to provide maximum protection at
minimum cost. It is a whole life without profit plan, premiums payable up to
age of 70 yearsof the assured. The
premium charged is that of whole life without profits  and therefore sufficiently low. This risk is
however covered for the full sum assured. After 5 years, the life assured can
convert this  policy  into an endowment with or without profits
choosing that term without having to go on in for a medical examination In case
the conversion option is not exercised at the end of 5 years the  policy continues as a whole life plan
without  profits with the premium
payments ceasing at the age of 70. The minimum sum assured is Rs. 20 000, and
the maximum age at the entry is 45 years. 
3) Limited payment whole life plan 
No-5: In this  policy the life
assured required to pay premium for a fixed period from 5 to 55 years. The life
assured shall have</div>
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LIFE INSURANCE PRODUCTS OR POLICIES

As mentioned earlier in the life insurance industry, apart from LIC India Several private companies are also involved in selling life...

Insurance Loans24

HISTORY OF MOTOR INSURANCE

MISCELLANEOUS INSURANCE

LIFE INSURANCE PRODUCTS OR POLICIES

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