evol. of insurance
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design of study
Scope:
Insurance itself means that getting secured against the
uncertainties in life. In todays world we see a wide scope in the
insurance sector. Earlier their were only few in this business like
L.I.C, G.I.C etc., But now after private sectors entry in this field
there has been tremendous improvement and lot of opportunities
for people have increased. They are now benefited with various
other types of Insurance like Health, Accident, Cattle, and Crop
etc.
Objective:
The main objective of all these insurance is to provide the people
against the best possible assistance against the loss occurred to
them. And the basic objective of mine behind this project is to put
glance over various kinds of insurance available to the people.
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INTRODUCTION
TO
INSURANCE
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Nature Of Insurance.
Insurance is defined as a co-operative device to spread the loss
caused by a particular risk over a number of persons who are
exposed to it and who agree to ensure themselves against the risk.
Risk is uncertainty of a financial loss. It should not be confused
with the chance of loss which is the probable number of losses out
of the given number of exposures. It should not be confused with
the perils that is defined as the cause of loss or with the hazard
which is a condition that may increase the chance of loss. They are
agreed to share the loss because the chances of loss, i.e., the
time, amount, to a person is not known.
Anybody of them may suffer loss to a given risk, so, the rest of
persons who are agreed will share the loss. In fact, the loss is
shared by them by payment of premium which is calculated on the
probability of loss. In olden time, the contribution by the personswas made at the time of loss. The insurance is also defined as a
social device to accumulate funds to meet the uncertain losses
arising through a certain risk against the person insured against the
risk.
Definition of InsuranceThe definition of insurance can be made from two points:
i) Functional Definition and,
ii) Contractual Definition.
i) Functional Definition
Insurance is a co-operative device to spread the loss caused by a
particular risk over a number of persons, who are exposed to it and
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who agree to insure themselves against the risk. Thus, the
insurance is (a) a co-operative device to spread the risk: (b) the
system to spread the risk over a number of persons who are
insured against the risk; (c) the principles to share the loss of eachmember of the society on the basis of probability of loss to their
risk; and (d) the method to provide security against the losses to
the insured.
Similarly, another definition can be given. Insurance is a co-
operative device of disturbing losses, falling on an individual or his
family over a large number of persons, each bearing a nominal
expenditure and feeling secure against the loss.
ii] Contractual Definition.
Insurance has been defined to be that in which a sum of money as
a premium is paid in consideration of the insurers incurring the risk
of paying a large sum upon a given contingency. The insurance,
thus, is a contract whereby
(a) Certain sum, called premium, is charged in consideration,
(b) Against the said consideration, a large sum is guaranteed to be
paid by the insurer, who received the premium,
(c) The payment will be made in a certain definite sum, i.e., the
loss or the policy amount whichever may be, and
(d) the payment is made only upon a contingency. More specific
definition can be given as follows-
Insurance may be defined as a consisting one party (the insurer)
agrees to pay to the other party (the insured) or his beneficiary, a
certain sum upon a given contingency (the risk) against which
insurance is sought.
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Evolution
of
Insurance
Evolution of Insurance.
The origin of insurance is lost in antiquity. The earliest traces of
insurance in the ancient world are found in the form of marine trade
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loans or carriers contracts which included an element of insurance.
Evidence is on record that arrangements embodying the idea of
insurance were made in Babylonia and India at quite at early
period. The codes of Hummurabi and of Manu had recognized theadvisability of provision for sharing the future losses. However,
there is no evidence that insurance in its present form was
practiced prior to the twelfth century.
There are basically four types of Insurance:
1. Marine Insurance
2. Fire Insurance
3. Life Insurance
4. Miscellaneous Insurance
1. Marine Insurance
It is the oldest form of insurance. Under the Bottomry bond, the
system of credit and the law of interest were developed and were
based on a clear appreciation of the hazard involved and the
means of safeguarding against it. The contract of insurance was
made a part of the contract of carriage, and Manu shoes the
Indians had even anticipated the doctrine of average and
contribution.
Freight was fixed according to season and was expected
to be reasonable in the case of marine transport which was then
very much at the mercy of winds and elements. Travelers by sea
and land were very much exposed to the risk of loosing their
vessels and merchandise because the piracy on the open ses and
highway robbery of caravans were very common. Besides, there
were several risks. The risks to the owners of such ships were
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enormous and, therefore, to safeguard them the marine traders
devised a method of spreading over them the financial loss which
could not be conveniently borne by unfortunate individual victims.
The marine policies of the present forms were sold in the
beginning of fourteenth century by the Brugians. On the demand of
inhabitants of burges, the Count of Flanders permitted in the year
1310, the establishment in this town of a character of Assurance,
by means of which merchants could insure their goods, exposed to
the risks of sea.
2. Fire Insurance
After marine insurance, fire insurance developed in present form. It
had been observed in Anglo-Section Guild form for the first time
where the victims of fire hazards were given personal assistance
by providing necessaries of life. It had been originated in Germany
in the beginning of sixteenth century. The fire insurance got
momentum in England after the great fire in 1666 when the fire
losses were tremendous. About 85 per cent of the houses were
burnt to ashes and property worth of sterling ten crores were
completely burnt off. Fire Insurance Office was established in 1681
in England. Sun Fire Office was successful fire insurance
institution.
In India, the general insurer started working since 1850
with establishment of the Triton Insurance, Calcutta. The general
insurance in India could not progress much. The slow growth of
joint stock enterprise and mechanized production was another
reason for low level of mechanized business.
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3. life Insurance
Life insurance made its first appearance in England in 16th
century,first recorded evidence in England being the policy on life of
William Gybbons on June 18, 1653. Even before this date annuities
had become quite common in England, and marine insurance had,
in fact, made its appearance three thousand years ago. The life
insurance developed at exchange Alley.
The first registered life office in England was the Hand-in-
Hand Society established in 1696. Life insurance did not prosper in
the United States during the 18th century, because of serious
fluctuations in the death-rate, but soon after 1800 some active
interest began to be shown in this enterprise because of the
application of level premium plan which had by then been in
operation in U.k. for more than a generation. In India, some
European started the first life insurance company in 1818. The year
1870 was a year of landmark in the history of Indian Insurance
separating the early period of pioneering attempts at life insurance
from the subsequent period of steady development at the
establishment of Indian life office, viz., Bombay Mutual Life
Assurance Society in 1871. The next important life office wasOriental Government Security life Assurance Co., Ltd., which
started its operation since 1874. Since then several offices
developed in India.
4. Miscellaneous Insurance
The miscellaneous insurance took the present shape at the later
part of nineteenth century with the industrial revolution in England.
Accident insurance, fidelity insurance, liability insurance and theft
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insurance were the important form of insurance at that time.
Lloydss Association was the main functioning institution. Now,
insurance, etc., are taking place. The scope of general insurance is
increasing with the advancement of the society.
Kinds of Insurance According to Risk Point of
View.
INSURANCE
PERSONAL PROPERTY LIABILITY FIDELITY
LIFE
PERSONAL
ACCIDENT
HEALTH
MARINE
FIRE
AUTOMOBILE
CATTLE
CROP
MACHINERY
THEFT
3RD PARTY
EMPLOYEES
MOTOR
REINSURANCE
FIDUCIARY
CREDIT
PRIVELEGE
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personal
insurance
1] Personal Insurance
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Introduction:
The personal insurance means insurance related to human life which
may suffer loss due to death, accident and disease.
Personal Insurance is then divided into:
a) Life Insurance
b) Personal Accident Insurance
c) Health Insurance
Let us study each of them.
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Life
insurance
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i) Life Insurance
Introduction:
Life Insurance products have to suit the requirements of
customers. The three major concern of any person could be :
a) Dying too early or b) Living too long c)Living with disability.
Besides, there are other concerns about taking care of children and
their future and about creating wealth that most individuals cherish.
Life insurance products are generally designed to address such
needs of an individual.
With these situations in mind, life insurance products provide for a)
Risk Cover b) Investment c) Health Cover.
There are four types of insurance policies-
1. Term Insurance
2. Endowment life Insurance
3. Whole Life Insurance
4. Annuities
1. Term Insurance
Term Insurance pays a death benefit to the legal heirs if the person
insured dies during the term of the policy. It may be described as
temporary insurance. Term insurance plan could be of following
different types-
a) Level Term Insurance- Here there is a uniform premium and
benefit throughout the term of the policy. In the event of death
anytime during the term, the same sum assured is payable. Where
the term is for over a year, the renewal premium is same each
year. It is simple plan.
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3. Endowment Insurance
Pure endowment is a plan where the benefit is payable to the
insured only on survival of the specified term. Combining the future
of term assurance and pure endowment are endowment policiesthat pay either on the death of assured, whenever it occurs, or after
a fixed period. Here the claim may arise either by death or by
maturity.
4. Annuities
Annuities are a form of pension which an insurance company
makes a series of periodic payments to a person (annuitant) or his
or her dependents over a number of years (term), in return for the
money paid to the insurance company in lump sum or installments.
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PERSONAL
ACCIDENTINSURANCE
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ii) Personal Accident Insurance
Personal accident insurance is the insurance designed to replace a
substantial part of earned income lost disability to a person caused
by accident injury including the medical expenses. It also indemnify
the loss due to death, leading to the accident.
Types of personal accident insurance
Some important types of policies are as below:
1. Janata individual accident policy
2. Third party/passenger/driver accident policy
3. accident policy issued by aviation department
4. Group insurance personal accident policy for school children
5. Rural personal accident policy
6. Personal accident family package policy
7. Medical (Hospital and house) treatment policy
Every type of policy has its own features and premium rate.
Classification of risks
The amended rules in regard to personal accident policy have
been implanted from April 1, 1994. According to these directions,
the personal accident risks are classified as:
1] Risk group I- It includes Accountants, Doctors, Advocates,
Artisans, Consultants, Engineers, Teachers, Bankers,
Administrative officers and other professional field.
2] Risk group II- It includes architects, contractors, vertinary
doctors, vehicle drivers, other form of same trade but not doing
manual work.
3] Risk group III- All such persons, excluding the risk group IV,
engaged in physical labour, such as garage and motor mechanics,
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machine operators, drivers of trucks or other vehicles sportsmen
and athletics, carpenters engaged in this type of risks.
4] Risk group IV- Persons engaged in underground mines, and
armory, persons engaged in electricity generation, circus, hoarse
race, mountaineers, winter sports, and polo players others
belonging to this field.
Insurance cover/benefits in personal accident policy.
1. In case of death Full sum assured
2. Permanent disablement Full sum assured
(damages to both hands/legs, or
both eyes, or one eye and one leg.
3. In the case of damages to one 50 % of the sum
assured
Hand/leg or one eye
4. Other kind of permanent disablement 100 %
in addition to the damages happened to
the injury
5.Temporary or total disablement Paid on weekly basis
1.00 % of the sum
assured per week
6. Temporary or partial disablement Paid on weekly basis
current rate is 3.00
%
of sum assured perweek.
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HEALTH
INSURANCE
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iii) Health Insurance
Health Insurance mainly covers two types of benefits: one is
related to the reimbursement of medical expenses related to
specific diseases and the other is related to the hospitalization.
Globally, the health covers operate in two ways cashless and
cash reimbursable ones.
The health insurance has changed the way medicine is dispensed
and sold in the most parts of the world. In India, its impact has yet
to be felt. However, the introduction of the now famous Mediclaim
policy made a huge difference to an ordinary citizens usage of
insurance for medical cover purpose. There are following types of
policies:
1) Individual Mediclaim Policy
2) Bhavishya Arogya Policy
3) Jan Arogya Bima Policy
4) Cancer Insurance
5) Group Mediclaim Policy
1. Individual Mediclaim Policy
This policy covers the domiciliary hospitalization expenses for
diseases sufferd during the policy period. It also covers
hospitalization for injuries caused during an accident.
The policy covers following expenses:
1. Boarding expenses in a hospital or nursing home-as per the
description provided in the policy.
2. Surgical fees, medical practitioner and consultants fees.3. Nursing expenses.
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4. Anesthesia, blood, oxygen operation theatre charges, surgical
appliances, medicine and drugs chemotherapy, prosthetic limbs
etc.
2. Bhavishya Arogya PolicyThis is deferred Mediclaim policy that can taken at any age
between 25 and 55 years of age. The retirement age can be
selected by the insured at the time of taking policy and can be
between 55 and 60 years of age.
The amount of total benefit can be a maximum of Rs. 50000 during
the lifetime of insured commencing from the date of retirement, andcannot exceed Rs. 20000 per illness or injury.
3. Jan Arogya Bima Policy
It was devised to address the smaller covers and people with
limited means of paying the premium. It does not offer any
cumulative bonuses. It does not offer any medical check up
benefits. The sum assured is limited to Rs. 5000 premium is low
compared to regular policy. So this differs it from usual Mediclaim
policy.
4. Cancer Insurance
There are two Cancer policies offered in India; Group Policy issued
by Indian Cancer Society and other is Group Policy offered by
members of Cancer Patients Aid Association. The cover is limited
upto Rs. 50000 in the case of the ICS policy and can go upto Rs.
200000 in the case of CPAA policy. Both policies require cancer
check up prior taking the policy It includes costs of diagnosis,
surgery, biopsy, radio therapy, hospitalization.
5. Group Mediclaim Policy
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This policy is available to any corporate, association, institution and
group of people provided they form the minimum number of
persons to be covered under the policy. The policyholder in this
type of insurance is the group itself and the premiums are payableby the group. The individual member of the group may enter and
exit the policy upon their becoming or ceasing to be member of the
group.
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PROPERTY
INSURANCE
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II] Property Insurance
The property insurance of an individual and of the society is
insured against the loss of fire and marine perils; the crop is
insured against unexpected decline in production, unexpected
death of the animals engaged in the business, breakdown of
machines and theft of the property and goods. Property Insurance
is further divided into:
a) Marine Insurance
b) Fire Insurance
c) Automobile Insurance
d) Cattle Insurance
e) Crop Insurance
f) Machinery Insurance
g) Theft Insurance
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marine
insurance
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a) Marine Insurance
Marine insurance has been defined as a contract between insurer
and insured whereby the insurer undertakes to indemnify the
insured in a manner and to the interest thereby agreed, against
marine losses incident to marine adventure. Section 2(13) A of
Insurance Act 1938 defines it as follows:
Marine insurance business means the business of effecting
contracts of insurance upon vessels of any description, including
cargoes freights and other interests which may be legally insured
in or in relation to such vessels, cargoes, freights, goods, wares,
merchandise and property of whatever description insured for any
transit by land or water or both, and whether or not including
warehouses risks or similar risks in addition or as incidental to such
transit and includes any other risks customarily included among
the risks insured in marine policies. The standard policy contains
the following information:
(i) Name of insured or his agent.
(ii) Subject matter insured. It may be ship (hull) cargo and freight.
(iii) Risks insured against.
(iv) Name of vessels and officers.
(v) Description of voyage and period of insurance.
(vi) Amount and term of insurance. (vii) Premium
Different types of policies are used in marine
insurance they are:
1. Voyage policy- This policy is issued to cover a particular
voyage from one port to another and from one place to another.The policy mentions the port of departure and the port of
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destination, between which the risks are generally underwritten. It
is used in case of cargo insurance. The liability of the insurer
continues during lading and re-shipping of goods.
2. Time policy- Here the subject matter is insured for a specific
period of time. This policy is taken for one year although it may be
for less than one year. It is commonly used for hull insurance. The
policy may cover while navigating the vessel or under construction.
Risk covered for under construction is for more than 12 months.
3. Voyage and time policy- The elements of voyage and time
policy is combined under this policy.
4.Valued policy- Here the value of loss to be compensated is fixed
and remains constant throughout the risk except where there is
fraud excessive over-valuation The value of the subject matter is
agreed by the insurer and the assured at the time of taking the
insurance.
5. Unvalued policy-When the value of the policy is not determined
at the time of commencement of risk but is left to be valued when
the loss takes place. The value thus left to be decided later on is
called the insurable value or unvalued or valuable policy. Usually
unvalued policies are not common in marine insurance because
evaluation of loss at the time of damage poses a difficult problem.
6. Floating policy- The policy describes the general terms and
leaves the amount of each shipment and other particulars to be
declared later on. It is made in order of dispatch of shipment. The
most popular form of contract is Open Cover. In which both the
insured and the assured agree to accept all the shipment falling
within the scope of the open cover which is merely an original
ship.
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7. Blanket policies- It is taken to cover losses within the particular
time and place. Policy is taken for certain amount and premium is
paid on the whole of it in the beginning of the policy and is re-
adjusted according to the actual amount at roisk.
8. Named policy- Here the name of the ship and the amount of
cargo are mentioned. they are specific policies.
9. Single vessel and fleet policy- A ship or a fleet of ship is
insured here. When one policy is assured, it is single vessel policy
and when a fleet is insured in single policy, it is fleet insurance
policy.
10. Block policy- This policy insures incidental risks, too, along
with the marine perils. eg. Cotton is insured from the time of its
processing to the time it is delivered to destination.
11. Currency policy- It is issued in foreign currency, where the
sum assured is stated in foreign currency. It avoids fluctuations in
foreign currency.
12. P.P.I. Policies- It is to avoid the complication of principle of
insurable interest. It is called Policy Proof of Interest .It is based
on mutual understanding, they are known as honored policies. It is
called as wagering policy as insurable interest is not required, and
cannot be enforceable.
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Fire
insurance
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b) Fire Insurance
Fire Insurance is one of the oldest form of insurance and goes as fr
back as Marine insurance. Its origins are in the the age-old fear of
fire and human failing to control fire. In the early development of
industrial society fire was the main source of energy. No industrial
activity or commerce was possible without fire and the need to
insure the risk of uncontrolled fire became the integral part of
society.
Fire insurance is designed to provide for financial loss to property
due to fire and few other related hazards. Fire insurance isgoverned by Tariff under the Tariff Advisory Committee (TAC).
Examples of property that can be covered under the Fire insurance
policy are:
1. Buildings
2. Contents of Building such as Machinery, equipments, semi-
finished goods, finished goods etc stored in factories and godowns.
3. Electrical installation of Building
4. Goods in the open
5. Dwellings and contents of dwellings
6. Furniture, fixture and fittings
7. Pipelines located inside and outside buildings, dwellings and
compounds.
The standard Fire Policy covers the following hazards
1. Fire- Usually this excludes destruction or damage caused to
property by,
i. Its own fermentation, natural heating
ii. Its undergoing any heating or drying processiii.burning of any property insured by order any Public Authority.
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2. Explosion/Implosion- This would exclude the destruction or
damage caused to boilers, economizers, or other vessels in which
steam is generated, machinery or apparatus subject to centrifugal
force by its own explosion/implosion.
Such explosion as may happen to boilers can be covered by Boiler
Explosion policy under Engineering insurance.
3. Aircraft damage- Destruction or damage caused by Aircraft,
other aerial or spatial devices and articles dropped from them
excluding those caused by pressure waves.
4. Lightning
5. Riot, strike, malicious and terrorism damage- Direct visible
physical loss, destruction or damage by external violent means
caused to property but excluding those caused by:
a) Total or partial cessation of work, stoppage, retardation/slow
down, or interruption or cessation of any process or operation of
omission of any kind.
b) Permanent or temperory dispossession of any building or
plant, or factory or unit or machinery resulting from unlawful
occupation by any person of such building or plant or unit or
machinery or prevention of access to the same.
c) Permanent or temporary disposition resulting from
confiscation, commandeering, requisition or destruction by order of
the government or any lawfully constituted authority.
d) Burglary, housebreaking theft, larceny or any attempt by any
person taking part in such activities.
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6. Impact damage- Impact by any rail/road vehicle or animal by
direct contact not belonging to or owned by
a) The insured or any occupier of premises, or
b) Their employees while acting in the course of employment.7. Storm, cyclone, typhoons, tempest, hurricane, flood and
inundation.
8. Subsidence and Landslide including rock slides, or
destruction, damage caused by subsidence of part of site on
which the property stands or landslide/rockslide excluding:
a) The normal cracking, settlement or breeding or bedding down
of new structures.
b) Coastal or river erosion.
c) Defective design or workmanship or use of defective material.
d) Demolition, construction, or repair of any property.
e) Leakage from automatic sprinkler installation excluding:i) Repair or alterations to the buildings or premises.
ii) Repairs, removals or extensions of sprinkler installations.
iii) Defects in construction known to insured.
9. Bush fire, excluding fire caused by forest fires.
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automobile
insurance
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c) Automobile Insurance
Introduction:
Losses from property damage, medical and legal costs, and lost
income add up to billions of dollars annually for automobile
mishaps. Automobile insurance plays an important role in
protecting consumers from serious financial losses that can result
from such accidents
The basic types of auto insurance coverage include:
Bodily Injury Liability. Pays your legal defense costs and claimsagainst you if your car injures or kills someone. Covers family
members living with you and others driving with your permission.
Property Damage Liability. Pays your legal defense costs and
claims against you if your car damages another's property. Does
not cover your property, including your auto.
Medical Payments or Personal Injury Protection. Pays
medical expenses resulting from an accident for you and others
riding in your car. Also pays for you or your family members injured
while riding in another's car or while walking.
Collision. Pays for repairs of damage to your car caused by a
collision with another vehicle or any other object, regardless of whowas responsible.
Comprehensive Physical Damage. Pays for damages to your
car resulting from theft, fire, hail, vandalism, or a variety of other
causes.
Uninsured or Underinsured Motorist. Pays for costs related to
injuries or property damage to you or your family members and
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guests in your car caused by an uninsured, underinsured, or hit-
and-run driver.
If you are involved in an auto accident, take the following steps: Dont leave the scene.
Call for medical assistance if there are injuries. Provide basic first
aid.
Call a law enforcement officer if needed. Get the officer's name
and police station address. Ask when the accident report will be
filed, its case number and how to get a copy.
Take careful note of the following:
o Date and time of the accident.
o Street and city.
o Weather and road conditions.
o Direction and speed you and other drivers were going.
o Brief description of how the accident occurred.
o Record the license plate, drivers license and insurance
information numbers of each driver involved.
Filing claim
Phone your insurance agent or a local company representative as
soon as possible.
Ask your agent how to proceed and what forms or documents will
be needed to support your claim.
Keep records of your expenses because any you incur as a result
of an automobile accident may be reimbursed under your policy.
Keep copies of your paper work.
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cattle
insurance
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d) Cattle Insurance
Introduction:
Risk is an inherent part of any agricultural business. The cattle
business is no exception. Most experienced events beyond their
control such as drought or mad cow scares.
One of the effective ways to limit risk is a crop producer is to use
crop insurance. Insurance Corporation programs are now an
integral part of many producers risk management plans. Until
2003, however, there had been no federal insurance option for
beef cattle producers. The pilot program of Livestock Risk
Protection (LRP) Insurance was halted in December of 2003 due
to the discovery of bovine spongiform encephalopathy (BSE),
known as mad cow disease, but insurance is again available to
cattle producers in certain states.
How LRP WorksLRP contracts are essentially a single peril price contract.
Currently,
LRP contracts are available for both feeder cattle and fed cattle in
Wyoming. The insurance price level is tied directly to a Chicago
Mercantile Exchange (CME) index.
LRP contracts are available for a certain price level, weight, andnumber of head. For example, a producer has 75 head of steers
expected to weigh 650 pounds in six months at marketing.
Assume that an insurance coverage price of $100 per cwt is
selected. When it comes time to market the steers, assume the
price (as determined by the CME index) is $90 per cwt. This results
in an indemnity payment of $10 per cwt or $4,875 total. It is
important to note that LRP does not necessarily guarantee the
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producer a cash price. The cash price a producer receives on the
open market may be different than that determined by CME index.
Therefore, it is important to try and market cattle for the CME index
price to fully take advantage of
an LRP contract.
LRP Requirements and contracts
A producer must make an application with insurance agent
determine eligibility for an LRP contract. To be eligible, a cattle
producer must own or have a substantial interest in the cattle being
insured. Heifers, Brahma, and dairy crosses are now eligible for
LRP, but their specific coverage levels are determined by the
U.S.Department of
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crop
insurance
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e) Crop Insurance
India is basically an agricultural country and different varieties of
crops have been cultivated here. Cultivation of agricultural and
commercial crops have been faced with many problems such as:
1. Adverse climatic conditions causing draughts, floods, untimely
rains, storms, fog, frequent changes in temperatures, etc.
2. Pests and insects causing damages to crops.
3. Wild animals, etc.
The important agricultural cultivated in the country include:
1. Food crops- such as wheat, jowar, millet, paddy etc.
2. Plantation crops- like coffee, tea, rubber etc.
3. Fruits orchids- such as apples, oranges, etc.
4. Commercial crops- Such as cotton, jute, tobacco, groundnuts
etc.
Objects of crop insurance
New methods cultivation and high yielding crops have been
developed in country in the areas of food crops and commercial
crops. In spite of these developments, the Indian farmers still have
to bear heavy losses from unfavourable climatic conditions.
Most of the agricultural based countries do not have suitablemeans or resources to overcome such losses arising out of failure
of crops.
The objectives of crop insurance is to indemnify the farmers from
losses of natural calamities, disease spread in crops and plants,
damage to crops, riots and strikes etc.
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Advantages of crop insurance
1. Provide security for agricultural production.
2. Provide rights to the farmers against damage to crops.
3. Certainty of payment for farmers who depends upon the
economic conditions of farmers.
4. Stability to agricultural economy
5. Increase in income
6. Assistance to industries
7. Acts as the coordinating agency of government.
8. Refund of agricultural credit.
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Machinery
insurance
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f) Machinery Insurance
Introduction:
Machinery insurance coverage is a special type of property
insurance designed to reduce-through periodic inspections-the
chance of malfunction among boilers and other equipment,
including pressurized, electrical, and electronic machinery.
Machinery insurance reduces risk, direct loss and indirect loss
arising from accidents to objects. Objects include boilers,
generators, engines, pumps, compressors, and turbines.
The first step in the risk identification process for machinery is to
determine what objects present could cause loss-not an easy task.
The most apparent is any object containing steam. In addition to
steam boilers, any object under pressure or vacuum should be
considered. Refrigeration and air conditioning compressors are
also insured under a machinery policy.
BASIC COVERAGE:
This coverage can be written under the small business form to
cover boilers and vessels equipment, including or excluding air
conditioners/compressor units.
Machinery insurance covers direct damage to covered property
when caused by a covered cause of loss. Covered property is any
property that is owned by the named insured or is in the named
insured's care, custody, or control and for which the named insured
is legally liable.
A covered cause of loss is a sudden and accidental breakdown of
the insured's boiler and machinery equipment or any part of the
equipment described in the policy.
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Machinery insurance is necessary because commercial property
policies exclude explosion of steam boilers and breakdown of
machinery. The standard machinery policy contains three
extensions of coverage.
Theft
Insurance
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g) Theft Insurance
Introduction:
The theft cover is usually restricted to items taken after a forcible
entry of your home. So theft by a maid or guests may not be
covered. Nor is theft during or after a fire more properly called
looting usually covered under the theft clauses of a home
insurance. Property insurance can also be extended to cover
neighboring liabilities also called neighbors recourse. Such an
addition covers damages done to neighboring properties as a
result of fire coming out of your property or destruction or any
damage to it. It is very similar to third party liability in motor
insurance
Applying
The property application form is one of the longest in terms of
detail. In addition to the name of the applicant (whether tenant or
owner), the companies require the full address of the property, the
plot number, the type of property (residential or office, retail or
factory), the story to be insured, and the period of insurance. Other
sections in the application would concern the sum to be insured,
broken down into building, contents, neighbors recourse, and
other risks.
Particulars of the building, the furniture, and the machinery or
equipment are also required, as well as the fire protection
measures available. A detailed description of the neighborhood is
also required, and there is a complete section to be filled in with
regard to theft insurance, if that is taken as part of the policy.
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Your reimbursement may also be limited, depending on the
constraints of your insurance. Homeowner's insurance is designed
to assure you that you will not panic when things like jewelry,
cameras, collectibles, heirloom silver, computers, clothing, storedvehicles like boats, or legal documents are lost or irreparably
harmed. Again, be sure that your policys monetary limits match
what all of your valuables are actually worth. There are always
ways of increasing the coverage amount when you plan ahead.
Homeowner's insurance protects your home, belongings, family,
and valuables in the event of unexpected misfortunes like
vandalism, theft, accidents, or natural disasters. It is designed to
replace or rebuild your property when it gets damaged, from
reproofing a garage after a hurricane to purchasing a laptop stolen
from your home office. Homeowner's insurance doesnt just cover
your home, but usually extends to shield you from accidents your
pets, family, or property cause, such as a dog digging up a
neighbors new magnolia or a child breaking a window with a
baseball.
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Liability
insurance
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Liability Insurance
Introduction:
The liability insurance covers the risks of third party, compensation
to employes, liability of the automobile owners and re-insurances
It includes:
a)Third Party Insurance
b) Employee Insurance
c) Motor Insurance
d) Re-insurance
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THIRD
PARTY
INSURANCE
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i) Third Party Insurance
Introduction
Third Party Insurance (TPI) indemnifies vehicle owners and drivers
who are legally liable for personal injury to any other road user in
the event of a motor vehicle accident. Your TPI insurance will
cover you for personal injury claims made against you by other
road users such as drivers, passengers, pedestrians, cyclists,
motorcyclists and pillion passengers.
It is a compulsory form of insurance and the TPI premium is
included in your registration payment.
Management of Third Party Insurance
In the Australian Capital Territory (ACT) vehicle registrations and
Third Party Insurance (TPI) schemes are owned by the ACT
Government.
The Department of Urban Services manages vehicle registrations.
NRMA Insurance manages TPI claims and in consultation with the
ACT Government, TPI premiums.
NRMA Insurance is listed under "Third Party Insurance Company"
on Certificate of Registration (Renewal) documents. The TPI
premium is paid with other registration fees as a single payment at
Road User Services or ACT Government shop fronts.
Compulsory Third Party
Queensland operates a common law 'fault' based Compulsory
Third Party (CTP) scheme, first introduced in 1936. The scheme
provides motor vehicle owners with an insurance policy that covers
their unlimited liability for personal injury caused by, through or in
connection with the use of the insured motor vehicle in incidents towhich the Motor Accident Insurance Act 1994 applies.
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For the injured third party it provides access to common law, that
is, the injured person has a right to approach a law court to seek
monetary compensation from the person 'at fault' for the personal
injury and other related losses. As a fault based scheme it requiresproof of liability, i.e. the injured party must be able to establish
negligence against an owner or driver of a motor vehicle.
Consequently, circumstances can arise where, for example, a
driver who is wholly at fault in an accident cannot obtain
compensation because there is no negligent party against whom a
claim can be made.
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EMPLOYEE
INSURANCE
ii) Employee Insurance
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Introduction:
The geneses of employees liability insurance can be traced to
industrial development. It was, however, thought that the employer
had no more than the ordinary duty of care to his employees.Hence an employer injured as a result of negligence on the part of
his employer. Employee has the same rights against the employer
for the damage as any other could have.
So, the employer should take care of the following:
a) A safe place of work,
b) Proper plant, tools, machinery and working implements for their
maintenance in good working order.
c) Competent and fellow employees.
It would appear that the duties of employer would wide enough toencompass all situations in which an employee might be placed
that would give him automatically a right of action against employer
and enable avoid damages
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Motor
insurance
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iii)Motor Insurance
Introduction:
Motor Insurance is one of the largest non-life insurance business in
the world. This is because it is statutorily mandated in most parts of
world. All motor vehicles are required to be registered with road
transport authorities and insured for third party liability. The basic
premise is that motor vehicles could either cause injury or be a
subject to damage and injury and thus require insurance.
The Motor Vehicle Act of 1939 introduces compulsory insurance totake care of those who may get injured in an accident. The
insurance of damage to vehicle is not mandatory. In U.S every
state has to comply with it but in India Tariff Advisory Committee
regulates this business.
Types of Vehicles
For the purpose of insurance motor vehicles are classified into
three categories:
1) Private cars,
2) Motor cycles and scooters,
3) Commercial vehicles;
a) Goods carrying vehicles
b) Passengers carrying vehiclesi) Auto-rickshaw
ii) Taxis
iii) Buses
c) Miscellaneous vehicles
i) Hearses
ii) Ambulancesiii) Cinema vans/Recording vans
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iv) Mobile Utilities
re-insurance
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iv ) Re-insurance
Introduction:
The term Re-insurance, is also termed as insurance of insurance.
It means an insurer who has assumed larger risk may arrange with
another insurer to insure a portion of his insured risk. In other
words in the event of loss, it would be beyond the capacity of
insurer, then this re-insurance process is resorted to. In re-
insurance, therefore, the one insurer insures the risk which has
been undertaken by another insurer. The original insurer who
transfers a part of insurance contract is called re-insured and the
second insurer is called the re-insurer. Of course, the re-insurance
has to pay re-insurance premium for risk shifted.
To be effective, the re-insurance policy must be formulated after
carefully considering all aspects of situation to which it is to be
applied.
Characteristics of re-insurance
1) Re-insurance is like insurance which is practiced by which
insurers can spread their loss.
2) Its contract is applied by same principles which governed
original contract of insurance.
3) An original insurer has got insurable interest to the extent of risk
undertaken by him. Therefore, he can re-insure the property to thatextent.
4) Re-insurance can be terminated when the original insurance
lapses for any reason.
5) In the extent of loss, the original insurer has to pay the assured
sum first to the insured then he will recover from re-insurance his
share.
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6) In the absence of any privity of contract between the original
party who has insured his subject matter and the re-insurer, the re-
insurance are discharged.
7) The re-insurance is not liable to original insurer in the extent ofloss.
fidelity/
guarantee
insurance58
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Fidelity/Guarantee Insurance
Introduction
This policy is designed for companys need to cover any loss
caused by the dishonesty or fraud of any loss of the persons
mentioned in the schedule to be advised whilst in the
employment of the assured and up to the extend of the
respective sums set opposite the name of such persons
Fidelity/Guarantee Insurance Further includes:
1) Fiduciary Insurance
2) Credit Insurance
3) Privilege Insurance
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1) Fiduciary Liability Insurance
Introduction :
On knowing about this insurance we come to know that fiduciary
insurance is first of all a kind of liability insurance. We can study
this in detail as follows:
Moreover, designated fiduciaries are not the only targets of such
lawsuits; targets can also include the employer and even the plan
itself. Claims can be brought by plan participants, participants
legal estates, the Department of Labor, and the Pension Benefit
Guaranty Corporation. Such claims may include allegations of:
Improper advice or disclosure
Inappropriate selection of advisors or service providers
Imprudent investments
Lack of investment diversity
Breach of responsibilities or fiduciary duties imposed by ERISA Negligence in the administration of a plan
Conflict of interest with regard to investments
A private company can help mitigate the personal liability of its
fiduciaries by following the advice of outside experts and by
selecting diverse, financially sound investments. But, it cannot
entirely eliminate their personal liability.
In order to help protect private companies, their fiduciaries and
the benefit plans they manage, against fiduciary liability claims,
InsureCast offers Fiduciary Liability Insurance coverage. Please
go to our online Coverage Coach questionnaire to get a free no
obligation Fiduciary Liability Insurance quote.Typical Fiduciary Liability Insurance coverage
highlights:
Broad definition of insured including the company, its benefit
lans and its fiduciaries
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credit insurance
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b) Credit Insurance
Introduction:
Like any form of insurance, Credit Insurance is usually purchased
by a company to protect itself against specific losses that could
impair the performance of the company. In the case of credit
insurance, protection is offered to the supplier against the risk of
the debtor going into liquidation (Insolvency); delayed or non-
payment (Protracted Default) and in respect of export risks, the
unilateral cancellation of contract (Repudiation) as well as a myriad
of Political related risks.
Cost
Insurance costs depend on many factors such as: policy structure,
credit worthiness of the risks involved, and the amount of retention
of risk assumed by the insured. Typically a policy of domestic
credit insurance would range between one tenth of one percent of
sales to four tenths of one percent of sales.
Additionally, the degree of risk (or quality of the customers);
historical loss experience in your organization; current credit
extension and collection operating procedures; level of experience
or expertise (as evaluated by the insurer) and the concentration or
distribution of risk throughout your customer base is considered.
However, as with any insurance product, the quality of what is
being insured will have a bearing on the cost of the insurance. This
supports the assertion that insurance should be viewed as a
partnership with the credit management objective. Consequently,
the better job you are doing, the more economical the insurance is
in protecting your company against a catastrophic loss.
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privilege
insurance
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3) Privilege Insurance
Introduction:
Privilege specializes in offering highly competitive car
insurance for safe drivers, with a guarantee to beat renewal
quotes for any driver with 4 years or more no claims discount-
proving that you really don't have to be posh to get cheaper car
insurance.
Privilege Car Insurance
Who cares if the only estate you own has four wheels and an
engine? With Privilege car insurance, you only need 4 years No
Claim Discount to get high class car insurance for a lower price.
Which means youll enjoy such luxury treatment:
A guarantee that we'll beat your renewal quote if you have 4 years
or more No Claims Discount.*
Car Insurance Benefits
When you choose car insurance from Privilege, you're privy to a
wealth of great benefits and services.
Repairs guaranteed for at least 5 years when undertaken by an
approved repairer.
Courtesy car provided for you, in the event of an accident (not
theft or total loss), if you use one of our approved repair companies
(subject to availability).
24-hour accident recovery.
Convenient installments, subject to status*.
Windscreen replacement hotline, open 24 hours.
Emergency roadside assistance will arrive within 3 hours of
your call if your car's glass breaks
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How to claim
It doesn't matter if you're upper crust or down at heel, anyone can
be involved in an accident or fall prey to car crime. With Privilege
car insurance, claiming on your car insurance couldn't be easier.
Insurance companys claims representative will get to work on
getting you back on the road. One of network repairers will also
collect your car and deliver it to your doorstep repaired, cleaned
and in tip-top condition.
Make sure you have all the following in order to contact any
insurance company:
Your insurance policy number.
The date and time that the accident happened.
Details of the event.
What the damage was to your car and any other vehicles.
If other people were involved, you'll need their insurance details
(including their policy numbers).
A policy report number of reference if you were given one.
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CONCLUSION
Thus I tried my best to put before you the concept of my topic
Kinds of by mainly focusing on types of insurance before you and
their way of developing in the field.
Here we have seen that each insurance has its own features and
benefits to the people.
Lastly, I would like to conclude my saying that it was a great
experience working on this project.
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Case Study
on
marine
insurance
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ENERGY AND UTILITIES CASE STUDY
Thames Water: Streamlining IS operations and improving service
delivery, strengthening customer relationships and creating a thin
layer of IS
Thames Water is the worlds third largest water company providing
clean and waste water services to over 69 million customers around the
world. In the past year Thames Water has strengthened their position in
key markets; most notably in the Americas with the acquisition of
American Water Works. With around 13 million customers in the UK,
Thames continues to be one of the most efficient water companies in
the world.
The challengeThames Water had embarked on a journey to streamline their IS
operations to ensure better service delivery, improved customer
relationship and closer links with business. They also wanted to
move to a thin layer of IS. This was a challenge considering that
the Thames
Support Estate consists mostly of bespoke applications using a wide
spectrum of technologies and functional areas that cover all the
business functionality of a typical Water Utility.
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Over a two year period, through a series of strategic initiatives Wipro
made Thames Water realize significant cost savings as well as
remarkably improved the quality of the application estate. This was
done by following a cycle of Define, Perform, Review and Refine foreach of the functions that Wipro was entrusted with. Wipro devised and
implemented a strategy for cost savings by leveraging on its Global
Sourcing model. The savings in the application support budget was
also enabled through a system of Forecasting and reviewing service
requirements with partners and third party vendors.
The benefits
The solution has resulted in higher service levels and a productivity
improvement of 45 minutes per user per day in the work management
area. The solution also resulted in improved partner performance and a
reduction in Total Cost of Ownership by 0.5 million GBP per annum.
This combined with other business benefits resulted in a cost saving of
32% in two years.
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BIBLIOGRAPHY.
For this project I have have referred certain books and websites
which helped me to complete my project.
Books
1) Principals and Practice of Insurance
By, Dr. Pariasamy
2) Insurance
By, J.M Mathew
3) Principals of Insurance
By, M.N Mishra
Websites
1) www.google.co.in
2) www.lic.com.