General Insurance

POLICIES AND PROCEDURES OF GENERAL INSURANCE IN TARIKERE Chapter-1  Introduction  Objectives  Scope of Study  Methodology  Limitations  Chapter Scheme Chapter – 2 INTRODUCTION TO INSURANCE  History of insurance  Meaning and definition of insurance  Types of insurance  Scope of insurance  objectives of insurance Chapter – 3 INTRODUCTION TO GENERAL INSURANCE  History of general insurance  Meaning and definition of general insurance  Types of general insurance  Scope of general insurance  objectives of general insurance Chapter-4 MOTOR INSURANCE  History of Motor Insurance  Object  Types of Motor Vehicles  Forms of motor Insurance  The Motor Vehicle Act, 1939  Documents and Documentation  Rating

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Chapter 5 DATA ANALYSIS AND INTERPRETATION Chapter 6 FINDINGS, SUGGESTIONS AND CONCLUSION Annexure  Questionnaire  Bibliography

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Chapter-1 INTRODUCTION  Introduction  Objectives  Scope of Study  Methodology  Limitations  Chapter Scheme

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Introduction: Insurance is very important in our life and vehicles also. Insurance is a wide subject in the world because insurance bearing risk any movable property and people also. And one more think Insurance is the sophisticated calculation and application of co-operative principle is done behind the screen in a business form. The Insurance is take the loss prevention and risk is occurred in business and any type of problem. Insurance is confines itself solely to the use of the insurance transactions as the means of treating risk. It covers familiarity with insurance market. Its major objective is the efficient negotiation and placement of insurance coverage on behalf of the inured firm. Its cover prevention of loss and risk. Insurance is a plan for protection, Insurance plans are all the same, Insurance protection is limited to the value and purchase. Any vehicle is must owned the insurance because any accidents in road, air, water and railway this transport rarely accident and even air and water, especially more accidents in road. The Insurance is cover business, individual, society also. Insurance provide a facility to the policy holder are: 1. Increase in Export Trade 2. Delegation of Work 3. Partnership dissolution 4. Employees co-operation 5. Welfare of Employees 6. The Insurance covers losses due to fire, life and marine, accident. Objectives:  To know the overall insurance sector  To know about Motor Insurance

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 To know the Types of Motor Vehicles under Insurance  And types of services provided by Insurance industry  To know the satisfaction level of the customers  To study the problems faced by the customers  To know the policies in Insurance industry  To suggest feasible measures to the problems Scope of study: The main important purpose of the study is to know the policies and procedures of general insurance policy and also about motor insurance policies covered. And it further concentrates on the policies of motor insurance and the customer satisfaction level. The study covers the customers who are having policies in Tarikere city. Methodology: Methodology of the study Marketing research is one of the most effective tools that help organizations excel in the marketplace. Obtaining necessary information about customer‘s tastes and preferences is the key to business success. Primary data The primary data are those which are originally collected for first time by the researcher in view of objectives. The data are in raw from. This requires refinement through statistical methods in order to arrive at conclusions. It will collected from the customer of motor insurance, and experts & advisors. Secondary data

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The secondary data means data that are already available they refer to data which have already been collected by someone else and which have already been passed through the statistical process. The sources Books, articles, magazines, periodicals, internet source. Limitations of the Study:  The survey restricted to only motor insurance only  The survey is limited to tarikere city only  It was difficult to get the dealers to respond at times  The information supplied by the respondents may be biased  It is difficult to get response from more information during morning times from the policy holders  Time is limited. Chapter scheme: A study on policies and procedures towards general insurance with reference Tarikere city, the project which contains 6 chapters.  The first chapter deals with introduction, objectives, scope, methodology, and limitations of the study  The second chapter deals with history, types, objectives and scope of Insurance.  The third chapter deals with history, types, objectives and scope of general insurance  The fourth chapter deals with history of motor insurance, objectives, types of motor vehicles, forms of motor insurance, the motor vehicle act, 1939, documents and documentation, rating  The fifth chapter deals with data analysis and interpretation.  The sixth chapter deals with findings, suggestions and conclusion.

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Chapter – 2 INTRODUCTION TO INSURANCE  HISTORY OF INSURANCE  MEANING AND DEFINITION OF INSURANCE  TYPES OF INSURANCE  SCOPE OF INSURANCE  OBJECTIVES OF INSURANCE

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INTRODUCTION TO INSURANCE Insurance is a mechanism that helps to reduce the effects of adverse situations in the economical way. It premises to pay to the owner or beneficiary of the asset, a certain sum of the loss occurs. WHAT IS INSURANCE? The business of insurance is related to the protection of the economic values of assets. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it because it meets some of his needs. In the case of a factory or a cow, the product generated by it is sold and income is generated. In the case of a motor car, it provides comfort and convenience in transportation, there is no direct income. Every asset is expected to last for a certain period of time during which it will provide the benefits, after that, the benefit may not be available. There is a life time for a machine in a factory or a cow or a motor car. None of them will last forever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it incapable of giving the benefits. An epidemic may kill the cow suddenly. In that case, the owner and those enjoying the benefits there from would deprive of the benefits. The planned substitute would not have been ready. Insurance is a way of reducing uncertainty of occurrence of an event. Insurance is an investment. The unfortunate few of this group who encounter the risk get compensation out of this pool. Hence, insurance is based on the principle that a group of persons facing a particular risk join together and co-operate to form GFGC, Tarikere

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a pool. The insurance company creates a group and an agreement (each with other) among all members of the group to share the loss of any member due to an uncertain event taking place.

PURPOSE & NEED OF INSURANCE: The risk only means that there is a possibility of loss or damage. The damage may or may not happen insurance is done against the possibility that the damage happen. The earthquake may occur, but the building may not have been affected at all. The word ―possibility‖ implies uncertainty. Insurance is relevant only if there are uncertainties. HISTORY OF INSURANCE: History of insurance refers to the development of a modern business in insurance against risks, especially regarding ships, cargo, and buildings (―property ―and ―fire‖), death (―life‖ insurance), automobile accidents (―auto‖), and the cost of medical treatment (health insurance). The industry has been profitable and has provided attractive employment opportunities for while collar workers. It helps eliminate risks (as when fire insurance companies demand safe practices and the availability of fire stations and hydrants), spreads risks from the individual or single company to the larger community, and provides an important source of long-term finance for both the public and private sectors. ANCIENT WORLD The first methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessels capsizing. The Babylonians developed a system which was recorded in the GFGC, Tarikere

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famous code of Hammurabi, C.1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he could pay the lender an additional sum in exchange for the lender‘s guarantee to cancel the loan should the shipment be stolen. The Greeks and Romans introduced the origins of health and life insurance C.600 BCE when they created guilds called ―benevolent societies‖ which cared for the families of deceased members, as well as paying funeral expanses of members.

MEDIEVAL AND EARLY MODERN Insurance became for more sophisticated in post-renaissance Europe, and specialized varieties developed. The will of Robert Hayman, written in 1628, refers to two policies he has taken act with a wealthy Londoner: one of the life insurance and one of the marine insurance. Toward the end of the 17th century, London‘s growing importance as a centre for trade increased demand for marine insurance. In 19th Century most insurance companies operated locally. The ambitious ones expanded geographically in the 1830s, such as the New-York Life Insurance and Trust Company in upstate New-York, and the Baltimore Life Insurance Company in the Mid-Atlantic and Upper South. They built a network of agents to develop markets in different cities. ―Is he raw in good health, and does he usually enjoy good health, or how otherwise?......Has he at any time been afflicted with gout, asthma, consumption, scrofula, convulsions, palsy, or any other disease likely to impair his constitution?...... Has he been vaccinated, or had the small pox... Is he of a sedentary turn, or accustomed to much exercise... Do you know of any circumstance which renders insurance on his life more than usually hazardous?‖ An important concern for insurance companies was the moral hazard – people might set fires to collect property insurance or even commit suicide or murder when life insurance was GFGC, Tarikere

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involved. Fraud was also a problem, as people lied on applications, broke policy restrictions, or falsified their own deaths so their family could collect. In 20th Century Social Security: until the passage of the Social Security Act in 1935, the federal government had never mandated any form of insurance upon the nation as a whole, but this program expanded the concept and acceptance of insurance as a means to achieve individual financial security that might not otherwise be available. MEANING & DEFINITI0N OF INSURANCE: Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Insurance means a promise of compensation for any potential future losses. It facilitates financial protection against by reimbursing losses during crisis. DEFINITI0N: According to Mr. JOSEPH B.MACLEAN defines ―Every plan of insurance is in its simplest terms, merely a method of spreading over a large number of persons a possible financial loss too serious to be conveniently borne by an individual‖. According to Mr. Dr.W.A.DINSDALE defines ―insurance is a device for transfer of risks of individual entities to an insurer, who agrees for a consideration (called the premium), to assume to a specified extent losses suffered by the insured‖.

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TYPES OF INSURANCE: Based on Today‘s life style the list of types of insurance is increasing day by day. You will find a lot many numbers of new insurance policies which you might have not heard before. One of the most important and compulsory insurance for vehicle owners is: third party insurance. The main types of insurance policies available in the market are:  LIFE INSURANCE: In this policy, the insurance company pays in case of the demise of the policy holder or at the time of the maturity of the policy.  PROPERTY INSURANCE: This insurance helps you to prevent the losses against theft, fire, burglary or any natural calamity like Earthquake, Floods etc.  HEALTH INSURANCE: Health insurance consists of a package of various types of insurance related to health.  AUTO INSURANCE: Any financial loss due to accident of a vehicle is covered under the auto insurance policy.  TRAVEL INSURANCE: Loss of personal buildings while travelling, medical coverage, delays in the travel are all part of the travel insurance policy.  INSURANCE AT AMUSEMENT POINTS: This is a one of the new kinds of insurance policy ( not very popular in India) where in you are insured against the equipments that you are using at the amusement joints.  CREDIT INSURANCE: This type of insurance pays loans of the policy holder in case of any accident of the policy holder or job loss or death.  THIRD PARTY INSURANCE: This type of insurance covers damages caused by you (first party) to others (third party).

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SCOPE OF INSURANCE: The industry deals with risk management policies used to provide fence against any kind of uncertain loss or damage. The company which sells the insurance is called insurer and the person buying the policy is termed as insured. A lot of applicants get themselves enrolled in a study called Risk Management in order to qualify under this category. Here are the subcategories under ―Insurance‖ industry: Accident and Health Insurance; Fire, Marine, and Casualty Insurance; Hospital and Medical Service Plans; Insurance Agents, Brokers, and Service; Insurance Carries, NEC; Life Insurance; Pension, Health, and Welfare Funds; Surety Insurance and Title Insurance, to name a few. There are 336 million people and 68 million households in the country that are potential insurance product purchasers and by the year 2005, the size of the insurance premium is likely to be Rs 80,000 crore and the life fund nearly five times that. At the workshop, Prof Rishikesh Krishnan, Professor, Indian Institute of Management, Bangalore said, ―I tell my students that the choice of a career in this industry should be a subset of three factors: what the industry wants, what I like doing and what am I good at doing?‖ OBJECTIVES OF INSURANCE: Insurance is especially true with car insurance since 49 of the 50 states require car insurance to operate a motor vehicle on the road. The same can said of other types of insurance in that many people buy health and life insurance without a real understanding of why they do so. 1. Auto Insurance Objectives: Auto insurance, like other forms of insurance, protects people against unexpected loss. With auto insurance, this loss is the loss of property, health or life in the case of an accident. The insured driver agrees to pay a minimum out-of-pocket expanse called a deductible in the event that he experiences unexpected loss. The insurance company agrees to pay the

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remainder of the expanses. Motorists carry liability coverage to protect against damage they may cause to someone else‘s property as well. Some auto insurance to protect the policy owner in the event of hospitalization caused by a motor vehicle accident.

2. Health Insurance Objectives: Health insurance, like auto insurance, provides protection in the event of unexpected loss, but due to reasons associated with health care costs. Expanses in medical care can include doctor visits, hospitalization, prescriptions and expansive diagnostics tests.

3. Life Insurance Objectives: Life insurance is probably one of the more difficult types of insurance to understand in terms of its purpose and objectives. Life insurance can provide protection to your family in two primary ways. First, it can provide your family with an inheritance in the event of your unexpected demise. This money can be used to pay off existing bills and relieve any financial stress that may be caused by your passing. Term life insurance typically provides the greatest benefit for the premium.

ROLE OF INSURANCE: The process of insurance has been evolved to safeguard the interest of people from uncertainty by providing certainty of payments at a given contingency. Not only does it serves the ends of and individual or special groups of individuals it tends to pervade and to transform our modern social order too. The process of insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern affairs. The role and importance of insurance, here, has been discussed in three phases: 1) uses to

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individual 2) uses to a special group of individuals I e., business or industry and 3) uses to the society. The uses are of relevance to different peoples as: Uses to an individual: 1. Insurance affords peace of mind; the security wish is the prime motivating factor. This is the wish which tends it stimulate for more work. 2. Insurance protects mortgage property; at the death of the owner of the mortgaged property, the property is taken by the lender of money and the lender of money and the family will be deprived of the uses of property. 3. Insurance provides security and safety; it provides security and safety against the loss of a particular event. In case of life insurance payment is made when death occurs or the term of insurance has expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. 4. Insurance provides security and safety the insurance provides safety and security against the loss on a particular event. In case of life insurance payment is made when death occurs or the term of insurance is expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. In other words, security against premature death and old age sufferings are provided by life insurance. Similarly, the property of insured is secured against loss on a fire in fire insurance. 5. Insurance provides security and safety the insurance provides safety and security against the loss on a particular event. In case of life insurance payment is made when death occurs or the term of insurance is expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. In other words, security against premature death and old age sufferings are provided by life insurance. Similarly, the property of insured is secured against loss on a fire in fire insurance.

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6. Insurance protects mortgaged property at the death of the owner of the mortgaged property, the property is taken over by the lender of money and the family will be deprived of the uses of the property. On the other hand, the mortgage wishes to get the property insured because at the damage or destruction of the property he will lose his right to get the loan repayed. 7. Insurance eliminates dependency at the death of the husband or father, the destruction of family need no elaboration. Similarly, at destruction of property and goods, the family would suffer a lot. It brings reduced standards of living and the suffering may go to any extent of begging from the relatives, neighbours or friends. The economic independence of the family is reduced or, sometimes, lost totally. What can be more pitiable condition than this that the wife and children are looking others more benevolent than the husband and father, in absence of protection against such dependency. 8. Life insurance encourages saving I) Systematic saving is possible because regular premiums are required to be compulsorily paid. The saving with a bank is voluntary and one can easily omit a month or two and then abandon the program entirely. ii) In insurance the deposited premium cannot be withdrawn easily before the expiry of the term of the policy. As contrast to this, the saving which can be withdrawn at any moment will finish within no time. iii) The insurance will pay the policymoney irrespective of the premium deposited while in case of bank-deposit; only the deposited amount along with the interest is paid. The insurance, thus, provides the wished amount of insurance and the bank provides only the deposited amount. iv) The compulsion or force to premium in insurance is so high that if the policy- holder fails to pay premiums within the days of grace, he subjects his policy to lapsation and may get back only a very nominal portion of the total premiums paid on the policy.

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Uses to an business: 1. Uncertainty of business losses is reduced; a business is a sensitive organization and with slight negligence it can be turned into ashes. So insurance reduces the potential risks. 2. Business efficiency is increased with insurance; as one is completely secured then it makes it easier to work upon with more diligence and dedication. So insurance brings in security in the work place. 3. Catastrophic Loss Business insurance protects a business from closing due to a catastrophic loss. Fires, floods, hurricanes and tornadoes have been the end of many businesses in Texas, as elsewhere. When a company carries insurance against these types of losses, closure and loss are only temporary instead of permanent. Companies schedule always consider business interruption insurance. 4. Liability If a customer slips and falls while on your business premises or your product has a defect that injures a customer and you do not have insurance, this could spell the end of your business. If a company car is involved in an accident and someone is injured, that could be disastrous as well. Business liability insurance covers accidents that occur on the business premises. 5. Theft A new business is a big target for thieves. New computers, furniture and other office equipment is worth more at a pawn or chop shop than older equipment. Even older businesses that have just undergone renovations and upgrades are a target. Replacement insurance protects a business in the event equipment is stolen, replacing the missing items and paying for repairs from damage caused by the invasion. 6. Litigation

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We live in a litigious society. Even with the Texas tort reform legislation passed in 2003, which capped judgments and sought to eliminate frivolous lawsuits, businesses are sued by individuals and other businesses for a variety of reasons, legitimate and otherwise. Even the most frivolous lawsuit can be costly to defend; and in the event a business ends up on the losing end of a lawsuit, the awarded damages could exceed the business's capabilities to pay. Depending on the business entity structure, not only the business assets, but also the owner's personal assets could be at risk.

7. Personal Injury or Illness Business owners should have personal insurance as well. Medical insurance will ensure medical bills incurred due to an illness or injury will not wipe out a business's assets. Considering Texas has some of the highest medical costs in the country--costs per person are over 24 percent higher than the national average--going uninsured could potentially bankrupt a Texas business owner if he were to become ill. 8. Level of Coverage How much insurance to carry will depend on your industry, the business structure and the amount of assets your business has. The location of the business within Texas, such as coastal or rural, and whether the building is leased or owned will also be a factor. For example, a law firm partnership that owns the building in which it is housed might need more insurance than a jewelry designer operating out of her home.

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Uses to a society: 1. Wealth of the society is protected; loss of a particular wealth can be protected using insurance since it is a very secure option to keep things safe and free from market fluctuations. 2. Economic growth of the country; insurance contributes a lot to the general economic growth of the society as it provides stability to the functioning of process. 3. Employment: 1) Insurance creates employment opportunities in the country; an insurance company provides direct employment to carry out business activities, Insurance provides self-employment to various people. Insurance agents are an example. 4. Capital formation: Insurance accumulates small savings in premium. It makes investment for productive purposes. This leads to capital formation in the country. Insurance companies invest in industries, commerce and shares of listed companies. 5. Economic development: insurance contributes top economic development of country. Insurance creates positive development climate by providing protection from risks. 6. Capital formation leads to economic development: insurance funds are invested for productive purposes. Taxes paid by insurance company are used for social development by government. 7. Living standards: Insurance helps to improve living standards of society. Payments received from life insurance help to improve living standards of individuals and family. 8. The role of insurance is to take risks in the place of their clients. Basically, anything significant (statistically or otherwise) can and should be used. 9. The role of insurance is to share risks across all of society, reducing the impact risks have an individual‘s, and the stress of arbitrary bad luck.

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Chapter – 3 INTRODUCTION TO GENERAL INSURANCE  HISTORY OF GENERAL INSURANCE  MEANING AND DEFINITION OF GENERAL INSURANCE  TYPES OF GENRAL INSURANCE  SCOPE OF GENERAL INSURANCE  OBJECTIVES OF GENERAL INSURANCE

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INTRODUCTION TO GENERAL INSURANCE: Insurance industry has always been a growth-oriented industry globally. On the Indian scene too, the Insurance industry has always recorded noticeable growth vis-à-vis other Indian industries. Triton Insurance Co. Ltd. was the first General Insurance Company to be established in India in 1850, whose shares were mainly held by the British. The first General Insurance Company to be set up by an Indian was Indian Mercantile Insurance Co. Ltd., which was established in 1907. The General Insurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The post-nationalization General Insurance business was undertaken by the General Insurance Corporation of India (GIC) and its 4 subsidiaries:

1. Oriental Insurance Company Limited; 2. New India Assurance Company Limited; 3. National Insurance Company Limited; and 4. United India Insurance Company Limited.

Towards the end of 2000, the relation ceased to exist and the four companies are, at present, operating as independent companies. The Life Insurance Corporation (LIC) was established on 01.09.1956 and had been the sole corporation to write the life Insurance business in India. The Indian Insurance industry saw a new sun when the Insurance Regulatory & Development Authority (IRDA) invited the applications for registration as insurers in August, 2000. With the liberalization and opening up of the sector to private players, the industry has presented promising prospects for the coming future. GFGC, Tarikere

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The Indian Insurance industry is featured by the attributes: 1. Low market penetration; 2. Ever-growing middle class component in population. 3. Growth of consumer movement with an increasing demand for better Insurance products; 4. Inadequate application of information technology for business. 5. Adequate fillip from the Government in the form of tax incentives to the insured, etc.

The industry formations need to keep vigil on these characteristics of the Indian market and formulate their strategies to entail maximum contribution to the output of the sector. The Indian life and non-life Insurance business accounted for merely 0.42 percent of the world's life and non-life business in 1997.The figures of the basic parameters of the industry's performance viz. Insurance Density and Insurance Penetration also are evident of the hitherto existing low-yield Indian market conditions. The term "Insurance Penetration" broadly measures the contribution of the Insurance industry in relation to a nation's entire economic productivity. The figure of premium vis-à-vis the GDP of 1999 stood at 0.54 percent for non-life Insurance business and 1.39 percent for the life Insurance business. The term "Insurance Density" reflects the Insurance purchasing power. The premium per capita in India amounted to US $ 2.40 for non-life Insurance and US $ 6.10 for life Insurance in 1999 but with the deregulation of the sector, a sea-change in the scene is most likely. General insurance is important for your peace of mind. It enables you to minimize the effects of unexpected and often unwelcome future events, and helps GFGC, Tarikere

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you to organise your personal and business life with greater confidence. General insurance is a way to get benefit in the future for insured things. General insurance is quite different from life insurance; therefore, it is also called as non-life insurance. Things like car, vehicles and property like home can be insured. Personal insurance also comes in general insurance. Personal insurance includes health insurance, accident insurance etc. What is general insurance? Insuring anything other than human life is called general insurance. Examples are insuring property like house and belongings against fire and theft or vehicles against accidental damage or theft. Injury due to accident orhospitalisation for illness and surgery can also be insured. Your liabilities to others arising out of the law can also be insured and is compulsory in some cases like motor third party insurance. HISTORY OF GENERAL INSURANCE: This was similar to the system of insurance known as bottomry which existed in Phoenicia in 1200 B.C. In this system, backers loaned money to merchants to finance voyages. Merchants offered their ships (the hull was known as the ship‘s ‗bottom‘) as collateral for such loans. When a trip succeeded, the merchant would pay the trip‘s backer the original loan plus interest, the equivalent of a premium. If a ship went down on its voyage, the trip‘s backer would cancel the merchant‘s loan. The Greeks and Romans developed the earliest systems of life insurance. They formed societies which paid dues that went toward paying for the burial of members. Sometimes these societies also paid for the living expenses of deceased members‘ families. During the Middle Ages (5th to 15th centuries A.D.), workers joined together in craft. Many guilds, particularly in England and Italy, provided benefits to workers and their families in the event of illness or death.

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Lloyd’s Insurance as we know it today took its shape in 17th century England. There was a place called Lloyd‘s Coffee House in London, owned by Edward Lloyd, where merchants, ship-owners and underwriters met to discuss and transact business. The Lloyd‘s Act was passed in 1871 incorporating the members of the association into a single corporate body with perpetual succession and corporate seal. It extended from marine insurance to other insurance and guarantee business. Today, Lloyd‘s has become the world‘s best known insurance brand. It is commonly misunderstood that Lloyd‘s is an insurance company. Actually, it is a society of members, known as ‗underwriters‘, both corporate and individual, who underwrite in syndicates on whose behalf professional underwriters accept risk. Thus, supporting capital is provided by investment institutions, specialist investors, international insurance companies and individuals. History of India’s Insurance Business We find the term ‗Yogakshemam Bahamayam‘ in our ancient texts. This suggests that a form of ―community insurance‖ was prevalent around 1000 BC and practiced by the Aryans. In modern times, Triton Insurance Co. Ltd. was the first general insurance company to be established in India in 1850. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. Thereafter, many players emerged. By 1956, there were around 240 private life insurers and more than 100 general insurers. The Government of India, concerned by the unethical standards adopted by some players against the consumers, nationalised the industry in two phases in 1956 (life) and in 1972 (non-life). The government brought together life insurers under one nationalised monopoly corporation and LIC was born. The general insurance business remained in the private sector till 1972. Then, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New

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India Assurance Company, Oriental Insurance Company and United India Insurance Company. They were subsidiaries of the General Insurance Company (GIC).

MEANING AND DEFINITION OF GENERAL INSURANCE: All Insurance other than ‗Life Insurance‘ falls under the category of General Insurance. General Insurance includes of insurance of property against fire, burglary etc, personal insurance like Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other kinds of covers such as Errors and Omissions insurance for professionals, credit insurance etc. Non-life insurance companies have products that cover property against Fire and related hazards, flood storm and inundation, earthquake and so on. There are products that cover property against robbery, burglary etc. The non-life companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major portion of non-life insurance business. In respect of insurance of property, it is significant that the cover is taken for the actual value of the property to avoid being imposed a penalty. Where a property is undervalued for the purposes of insurance, the insured will have to bear a assessable proportion of the loss. For instance if the value of a property is Rs.1000 and it is insured for Rs.500/-, in the event of a loss to the extent of say Rs.500/-, the maximum claim amount payable would be Rs.250/- (50% of the loss being borne by the insured for underinsuring the property by 50%). This concept is quite often not understood by many insured. Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are known as benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on a reimbursement or cashless basis. The cashless

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service is offered through Third Party Administrators who have arrangements with various service providers, that is, hospitals. The Third Party Administrators also offer service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims. Accident and health insurance policies are available for individuals as well as groups. A group might be a group of employees in an organization or holders of credit cards or deposit holders in a bank etc. Generally when a group is covered, insurers offer group discounts. Liability insurance covers such as Motor Third Party Liability Insurance, Workmen‘s Compensation Policy, etc. offer cover against legal liabilities that may occur under the respective statutes— Motor Vehicles Act, The Workmen‘s Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmen‘s Compensation policy) are compulsory by statute. Liability Insurance not compulsory by statute is also gaining attractiveness these days. Many industries insure against Public liability. There are liability covers available for Products and so on. Appropriate general Insurance covers are necessary for every family. It is significant to protect one‘s property, which one might have acquired from one‘s hard earned income. A loss or damage to one‘s property can leave one shattered. Losses created by disasters such as the tsunami, earthquakes, cyclones etc have left many homeless and insolvent. Such losses can be overwhelming but insurance could help to lessen them. Property can be covered, so also the people against Personal Accident. A Health Insurance policy can give financial relief to a person undergoing medical treatment whether due to a disease or an injury. Industries also need to protect themselves by taking insurance covers to protect their building, machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance. So, the majority of the industries or businesses that are financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they insuring sufficiently are questions that need to be given some

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thought. Also organizations or industries that are self-financed must ensure that they are protected by insurance. DEFINITION: According to General Insurance in United Kingdom General insurance is broadly divided into three areas: the London market insures large commercial risks such as supermarkets, football players and other very specific risks. It consists of a number of insurers, reinsurers, [P&I Clubs], brokers and other companies that are typically physically located in the City of London. The Lloyd's of London is a big participant in this market.[1] The London Market also participates in personal lines and commercial lines, domestic and foreign, through reinsurance. Commercial lines products are usually designed for relatively small legal entities. These would include workers' comp (employers liability), public liability, product liability, commercial fleet and other general insurance products sold in a relatively standard fashion to many organizations. There are many companies that supply comprehensive commercial insurance packages for a wide range of different industries, including shops, restaurants and hotels. Personal lines products are designed to be sold in large quantities. This would include autos (private

car), homeowners (household),

pet

insurance,

creditor

insurance and others. ACORD [2] which is the insurance industry global standards organisation. ACORD has standards for personal and commercial lines and has been working with the Australian General Insurers to develop those XML standards, standard applications for insurance, and certificates of currency. TYPES OF GENRAL INSURANCE: In law and economics, general insurance is defined as a form of risk management basically used to hedge against the risk of a contingent, uncertain loss. General insurance is also defined as the equitable transfer of the risk of a loss, from GFGC, Tarikere

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one entity to another, in exchange for payment. An insurer is an institution or a company selling the insurance; an insured or policyholder is the person or entity who is buying the insurance policy. The general insurance rate is a factor used to determine the amount to be charged for a particular amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has come out as a discrete field of study and practice. These are the common types of general insurance: 

Home Insurance: Houses, lands and other real estate properties and hard assets are subject to accidental risks like theft, damage, destruction due to natural disasters or fire accidents etc. with such large investments gone into buying a real estate property like your home or office, the problem or risk involved is a loss of large amount of money. Home and property insurance protects you in managing and protecting against these risks. The cost of a real estate property and its monetary insurance is mostly based on the value of the already insured hard assets and also the place or location in which the assets are situated.



Travel Insurance: This is intended to shoulder or cover any of the financial or any other losses which were basically incurred by the insured while on his journey or traveling, be it nationally or internationally, such as mountain trekkers, cruise travelers or simply as a tourist.



Auto Insurance: Any vehicle on the road, no matter how safe it is driver is, some times bound to meet with an accident or two, which may leave it with just a few scratches, or crash it up totally. Most countries today require or obliged you to have an auto insurance while on road in your vehicles. If you have an accidental auto crash, a total repair could cost you a lot or a fortune. On the other hand, a little scratch on your Land Cruiser may also soar up your bills to a high level. Whether or not you want or need auto insurance mostly depends on the type of automobile you own. If you have an expensive car and a little repair could worry you out financially, you should therefore decide in buying an all-

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inclusive and crash insurance which will protect you against any and every harm done to your vehicle. 

Health Insurance: Whether you like it or not, almost always we face certain health challenges that may cause us a lot through medicines, hospitalization bills and other related expenditures. If we will not be smart and ready enough with this kind of cases then we will surely find it so hard to face sickness and other form of health problems such as therapy and many other treatments such as antibiotics treatment.



Fire Insurance: Fire is one truly big problem that may endanger our valuables, properties and even businesses. Worse it may threaten our lives and those of or loved ones. Well this would not be very hard unless we are ready to face such calamity with fire insurance. This will help us become more secured and ready to face fire cases.

Life Insurance: Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also sometimes included in the premium; however, in Australia the predominant form simply specifies a lump sum to be paid on the policy holder's death. The advantage for the policy owner is "peace of mind", in knowing that the death of the insured person will not result in financial hardship for loved ones. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion. Life-based contracts tend to fall into two major categories: GFGC, Tarikere

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

Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.



Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies.

Life Insurance: Life insurance is an agreement between you and Life Insurance Company. You agree to make certain payments to the insurance company. The insurance company agrees to pay sum of money to a person of your choosing if you die. The purposes of life insurance: The most common purpose of life insurance is to protect the finances of one‘s family or friends in case of a wage-earner‘s death, but that‘s not its only use.  To hire child care to replace a home-maker‘s contribution  For estate protection  For mortgage protection  To fund a retirement  To protect a business against the loss of a key employee  As an employment benefit. Scope of general Insurance: The PPF Scheme protects all compulsory insurance policies under the Motor Vehicles (Third Party Risks and Compensation) Act and Work Injury Compensation Act and Singapore policies of specified lines issued by registered direct general insurers which are PPF Scheme members. A Singapore policy insures

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risks arising in Singapore or where the insured is a Singapore resident or has a permanent establishment in Singapore. The types of specified lines covered are:  Personal motor insurance policies  Personal travel insurance policies  Personal property (structure and contents) insurance policies  Foreign domestic maid insurance policies  Individual and group short- term A&H policies

Each PPF Scheme member maintains a register of insured policies it offers. To find out if a policy offered by your insurer is covered, you can refer to the institution's register of insured policies. With the globalization of the Indian Insurance Industry and official recognition of Intermediaries/Brokers for direct business yet to be accepted by the Insurance Regulatory Authorities, Suprasesh General Insurance Services & Brokers Pvt. Ltd., is presently engaged in carrying out Facultative Reinsurance business and placement of Treaty in International Market. The Company has handled some of the prestigious insurance programmes in the country, including introduction of some new niche programmes such as: Loss of Revenue Cover, Comprehensive CPM Package, and Annualized Contractor‘s All Risk Policy etc. for the Indian market for the first time. We are carrying out business on behalf of all the four subsidiaries of M/S General Insurance Co., India and also have done Facultative Reinsurance on behalf of some of the companies in the neighboring countries, such as Nepal. We have placed Treaties on behalf of various Indian Insurance Companies in the International Market. With recognition of intermediaries for direct broking in Indian Market, we

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are contemplating of opening offices in several other locations of India as well. With our expertise we contemplate to concentrate more on Petrochemical & Energy Sectors and our thrust would be to offer most comprehensive and cost effective coverage to our clients. We are proud to say that till now we were able to achieve, an average annual growth rate of almost 15 to 20 %. This, we hope to improve to a consistent level of 20% and above in the coming years. Objectives of General Insurance: 1. To develop, promote and protect the interests of its members and the General Insurance business in the Commonwealth of The Bahamas, and to increase public awareness and education with respect to the benefits of General Insurance; 2. To foster the education of persons working in the General Insurance industry in The Bahamas; 3. To participate in civic affairs; 4. To consider all matters pertaining to the General Insurance industry in particular, and to trade and commerce in general in The Bahamas; 5. To represent the opinion of the Association to responsible persons and bodies; 6. To promote or oppose legislative and other measures affecting the General Insurance industry, trade and commerce in The Bahamas; 7. To collect, examine and distribute among its members statistical and other information in relation to the General Insurance industry and trade and commerce in The Bahamas; 8. To print and publish newspapers, periodicals and books or leaflets which the Association may think desirable for the promotion of its objects, and from time to time engage in public relations activities in whatsoever form the Association shall deem fit; 9. To become affiliated with any active, commercial, civic, or professional

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organisation or association in any part of the world whose objects, purposes and work shall be similar in part or in whole to those of the Association; 10. To promote and maintain high ethical standards amongst the members of the Association; and 11. To do all other lawful things as are incidental or conducive to the attainment of the above object 12. To act as a central body to build a business stability in the industry. 13. To serve as a meeting center for the general insurance industry. 14. To play an active role in promoting a stable business growth, and To promote and project a positive image of the industry among the Cambodian public. 15. Creating awareness on ethical market practice so that the consumer can be more confident. 16. Participate with the Government bodies to recommend them any market issues or market tendency toward development of the industry. 17. To source and share information of insurance market trends within the region and beyond. 18. To exchange experience with regional association and outside the region for further development of the Cambodian market. 19. To contribute bringing knowledge to consumers and customers via universities and other educational institution in Cambodia. 20. To act as a central body to build a business stability in the industry. To play an active role in promoting a stable business growth. Creating awareness on ethical market so that the consumers can be more confident.

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Chapter-4 Motor Insurance  History of Motor Insurance  Object  Types of Motor Vehicles  Forms of motor Insurance  The Motor Vehicle Act, 1939  Documents and Documentation  Rating

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History of Motor Insurance Motor-insurance was first started in U.K. the first car appeared in 1894 and the first policy was issued in 1895. It covered liabilities to third party. In 1899 accidental damage to car, and in 1901 burglary and fire were added. Thus the progress made is found in comprehensive policy of to-day. In 1903 the car and general insurance corporation limited was started and many others followed. After world war number of cars and car-accidents increased. The victims could not get compensation so the third party insurance was made compulsory (the Road Transport Acts 1930 and 1934 and 1960). In India Motor Vehicles Act was passed in 1939. The act was the same as that of U.K. The only difference is that in U.K. tariff is withdrawn but India‘s Tariff governs the insurance. The owner or operator of an automobile is subject to the hazard of claims for damages, and the owner, to the hazard of loss to the car itself. Claims of damage may arise out of the ownership, maintenance, or use of the car. Loss to the car or its contents or occupants (physical damage) may be caused by: 1. Fire internal or external origin, 2. Theft, 3. Collision or upset, 4. Miscellaneous. A person is subject to the hazards of injury, death or damage to property arising out of ownership maintenance, or use of an automobile by himself or by others. Object: Motor-insurance belongs to miscellaneous class of Insurance. But the business is so big that insurance companies have to maintain a separate department. This is a tariff class of business. So the covers, premium rates and policy farms are all standardized or uniform. Everyone who owns an automobile assumes certain risks. Because the property is exposed to damage and law imposes upon owners some GFGC, Tarikere

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responsibility towards the public. Those who drive cars are more responsible to public. The risks are of two types: (1)

Legal liability for damages for bodily injuries or damage to property caused other; (2) damage to or loss of one‘s own automobile. Everyone who owns an automobile assumes a risk because the property is subject to damage and the law imposes upon owner‘s responsibility to public. In the absence of any law also the owner or driver of an automobile is required to use reasonable care with respect to such vehicles to safeguard public from injury.

Basic Principles: The basic principles applicable to motor insurance are the same as they are in property and liability insurance. But the application of these principles to automobile insurance is accepted as a specialized problem requiring a special contract. However, we recall the principles below in brief. Utmost Good Faith: The doctrine imposes a legal responsibility on the proposer to disclose material facts to the insurer. The proposal form is compulsory. The declaration clause given there makes the proposer‘s responsibility a contractual duty of utmost good faith. The answers to questions in form given by proposer become 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 voidable. 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 past loss experience etc. Many of these provisions are now regulated by Motor Vehicle Act, 1939.

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Insurable interest: This is the legal right to insure. The essentials are: 1. Existence of property exposed to damage or liability; 2. That must be subject matter of insurance; 3. The insured must be in such a position that he shall suffer by loss or damage or benefit by the safety of the property. The parties who are expected to have insurable interest are: a) Insured. He as owner of vehicle suffers a loss if car is damaged or from a legal liability to third party who suffers a loss for his negligence. b) Other than insured. The driver or persons who drive may create a liability for insured. In effect the insured becomes the agent for these persons and insured indemnifies them. c) Financier. In hire purchase agreement the financier‘s interest is insurable. In case or loss of damage the owner shall get compensation (owner is financier). d) Motor trader. The garage proprietors as bailees have insurable interest for customer‘s loss or damage. Indemnity It means, the insured is placed after a loss, as far as possible, in the position as he was before the loss. It ensures no profit to insured out of loss. So the insurer pays 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 man repair, or replace or pay cash as it likes. Liability to third party is limited to policy sum. Legal costs are also indemnified. Indemnity is payment of actual loss. GFGC, Tarikere

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Subrogation and Contribution: Subrogation is transfer of right of insured to insurer. It arises only when the third party is responsible for damage. Insurers may exercise the insured‘s right to recover damage. Generally the right arises after payment of damage. But policy may contain transfer before payment (Knock and Knock agreement). Contribution 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. Proximate Cause: The insurers shall pay damage only if loss is caused by a peril most proximate or the nearest to damage and if it is not insured against. It is applicable to third party claims also.

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Types of Motor Vehicles: Three classifications are found in Act as follows: Motor Vehicle

Private Cars

1. Social, domestic & Pleasure purposes.

Motor Cycles

1. Motor cycles with/ Without side cars.

Commercial Vehicles

1.Goods carrying (Private carriers permit)

2. Professional or business 2. Auto cycles or mechanically 2. Goods carrying Purposes by insured or pendalled cycle. (Public carriers permit) His employees. 3. Motor Scooters 3.Trailers without means 4. Three wheelers of self propulsion In valid carriage 4. Passenger carriers, Buses, Hotel Omni Buses, Airline buses. 5. Passenger carrying Vehicles Hire, Miscellaneous Special type.

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Types of Policies: Any vehicle can be insured under the following policies: 1. Act only Policy. This provides the minimum cover for legal liability for injuries to third parties or their property damage. 2. Third Party Policy. This provides all covers of Act only and allowed higher limits for third party property damage. 3. Comprehensive Policy. After providing for damages as contained in above policies it also covers loss of or damages to the vehicle. Two other different covers are available for private cars. 4. Fire and or theft. This covers the risks of fire and or theft to car while in garage and out of use. 5. Third Party and Fire and or Theft Risks. This policy covers risks covered by Act only and third party policies and in addition covers risks of fire and or theft whilst the vehicle is running and or in garage. Classification of Vehicles: The vehicles are generally divided in the following four categories for the purpose of insurance: a) Private Cars b) Commercial Vehicles It refers to any type of mechanically driven vehicle used for business or trade purposes: i)

Commercial Passenger Vehicle.

ii)

Commercial Goods Vehicle or traders.

iii)

Motor Cycles.

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Classification is necessary for fixing the rates of premium. For that vehicles are further classified on the basis of their use or work. The Tariff defines and describes the vehicles in the following ways. Each of the above type vehicles can be private carrier or public carrier. a) Private Cars. According to their function or use by owners. i.

Vehicles used solely for social, domestic and pleasure purposes.

ii.

Cars of private type (including station wagon) used for special, domestic and pleasure purposes and for the business or professional purposes of the insured or insured‘s employees.

iii.

Three wheeled cars (including cabin scoters) used for private purposes. Note that cars are classified not by their size or make but for what purpose they are used or what functions they perform. A car carrying samples to customers is private. But if it transports goods it becomes public carrier and falls outside the private car class. Some purposes like giving on hire or for reward, racing, pace making, reliability trials, speed testing are not private use. They are trade uses.

Motor Cycles This class includes the following different types of vehicles: a) Motor cycle with or without side car. b) Auto cycles or mechanically assisted pedal cycles. c) Motor scooters with or without side car. d) Three wheeler invalid carrier. b) (I) Commercial Vehicles Owner’s goods. Vehicles carrying goods of the owner or insured. These vehicles are used under a private carrier‘s permit. The Motor vehicles Act, 1939 defines a Private carrier as an owner of a transport vehicle other than a public carrier who uses the vehicles solely for

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the carriage of goods which are his property or the carriage of necessary for the purpose of his business not being a business of providing transport. The following characteristics make a vehicle private commercial vehicle: 1. It is owned by the insured. 2. It is run under a private carrier‘s permit. 3. It is not public carrier i.e., carriers owner‘s goods only for his business purposes only. 4. It does not run for transporting goods for other than the owner. (II) Commercial Vehicles General Carriage. These vehicles are used under public carrier‘s permit. The act defines a public carrier as ‗an owner of transport vehicle who transports or undertakes to transport goods or any class of goods, for another person at any time or in any public place for hire of reward, whether in pursuance of the terms of a contract or agreement or otherwise‘. The following characteristics in a vehicle make it public commercial vehicle. 1. It is run under public carrier‘s permit. 2. Its owner transports goods of all classes of others. 3. It transports any type of goods from any public place at any time. 4. It may carry goods under an agreement or without agreement. (III) Trailers. Any truck, cart carriage or other vehicle without means of self-propulsion. It includes also agricultural implements drawn or hauled by self-propelled vehicles. (IV) Passenger Carrying Vehicles. The vehicles may be made like buses including tourist buses; hotel or school omnibuses, and air-line buses. The passenger carrying vehicles may be used for hire:

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I)

As taxis or private car type vehicles used for public hire;

II)

Private type taxis let out on private hire direct from the owner with or without meters and driven by the owner with or without meters and driven by the owner or an employee of the owner;

III) Private type vehicles let out on private hire and driven by the hirer or any driver with his permission; IV) Private car type vehicles owned by hotels and hired by them to their guests. The private car may be a passenger carrier if: i)

It is given on hire,

ii)

It may have meter or not,

iii)

May be driven by owner or his driver,

iv)

Hired to guests for self-driving. The use should be by others and for hire charges. Passenger carrying motorized rickshaw comes under this class. Miscellaneous and special types of vehicles carrying passenger also come under this class.

Forms of Motor Insurance According to risk covered by an insurance contract different policies are issued. Generally the following types of insurance policies are issued under vehicle policy or motor insurance. 1. Act Only Policy. The name explains the purpose and scope of the policy. It is compulsory. That means all owners of vehicles who play the vehicles in public places must abide by motor vehicle act. One important condition is to have insurance for certain risks. The risks may be many. But the risk of

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injury to third party‘s body and property is included here. Owner is bound to have this insurance. The amount of policy is fixed by Act. Further, the act compels the insured to cover risk to life and property of the employees engaged in vehicle as driver or attender or carried in vehicle. These risks are provided in Workmen‘s Compensation Act, 1923. The amount of coverage is mentioned in this Act. In India both the risks of bodily injury to third party and to employees can be covered under one policy. But Act provides for a legal liability of an insured toward third party for injury to his body and property. 2. Third party policy. This policy includes cover for all risks mentioned in Motor Vehicles Act and some things more. It expands or broadens the coverage by increasing the value of property to be covered. That means if one takes the policy he will get compensation from insurer up to the value of insurance which may be higher than the minimum amount prescribed under act. Generally the policy covers risks under the total Accident Act 1855 and common law. The insurer pays for all sums of liability, the costs and expenses for which insured liable. 3. Comprehensive. The broadcast available coverage of loss to the automobile is afforded under this heading. It covers all risks except those which are specifically excluded. (i)

Third Party Only. Covers all risks except those which are specifically excluded (by deleting own damage to medical expanses section).

(ii)

Third Party fire and or Theft (by amending section – I by endorsement or addition of clauses not found in forms).

Insurance is a contract. But the form of content is supplied by the insurer. This is called standard policy form. This form contains the common requirements. But the insured person may want cover for a few or more than the provisions made in the

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form. So to suit his needs some points are deleted or added. Any addition of new thing is called endorsement. We know discuss the different types of policies. We shall find that policy may cover one risk ‗Act only‘ or many risks. Policy gives minimum cover i.e., the legal liability of insured toward third party. This is the cheapest of all policies i.e. ‘Act only‘. Comprehensive Policy. This policy covers all risks to insured arising out of legal liability i.e., to third parties under Motor Vehicles Act, Total Accident and common law. It also covers loss or damage to vehicle. The form is provided in Private Car Tariff. Comprehensive means all included in one. But in practice all risks are not covered. It excludes many risks. So it is a standard comprehensive policy form. It covers all risks mentioned in that form and according to the terms of contract between insurer and insured. The form contains (i) the proposal of insured to take insurance, (ii) the declaration of material facts in the schedule; (iii) consideration, i.e., premium and (iv) promise to pay indemnity during period of insurance by insurer. We reproduce an extract of recital clause below: ―Whereas the insured by a proposal and declaration dated as in the schedule. Which shall be the basis of this contract and is deemed to be incorporated herein has applied to the company for the insurance hereafter contained and has paid or agreed to pay the premium as consideration for such insurance in respect of accident loss or damage occurring during the period of insurance.‖ The clause gives the frame of the contract. But the details are given in the schedules. The clause simply says that the covers are granted on the basis of facts disclosed by insured in the schedules. The important facts in clauses can be divided into three sections: (a)

I deals with the loss of or damage to the vehicle,

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(b)

II deals with the liability to third parties,

(c)

III deals with the medical expanses payable on accidental injury. 1. Loss or Damage to Vehicle The insurance company shall indemnify the insured against loss or damage to Motor car and or its accessories. The causes of loss may be from: (a)

External means,

(b)

Fire, external expulsion, self ignition or lightening or frost, or burglary or theft;

(c)

Malicious act;

(d)

While on road, in lift or elevator.

As we know this policy covers all risks to insured arising out of his legal liability under Motor Vehicles Act, Total Accident Act and common law i.e., it covers damage of bodily injury and property to third parties caused by insured. It covers damage to the insured‘s car and accessories. It limits the liability to the amount of actual loss. The insured cannot get anything more. Further the damage is compensated if caused by any of the causes mentioned above. The insurer gives it own meaning and definition of different items covered in policy. As, for example, accessory for insurance purpose means those parts such as bumbers, horns etc. these are directly supplied by the manufacturer along with car. These parts are not essential for running of car. Accessories which are kept separately or detached from car are excluded from policy coverage. Radios, tape recorders are not accessories. But insured may add them by paying extra premium. 2. Tcwing charges: The policy pays up to Rs.300 for protection, removal and delivery and redelivery by insured to repairer for repairing of car meeting an accident. 3. Immediate repairs. The company must agree and consent to this expenditure. Exceptions. The following types of losses are excluded from policy: GFGC, Tarikere

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(i)

Indirect or consequential loss. The best example of such a loss is transport expanses for availing alternative transport by insured during repair of car which met accident.

(ii)

Depreciation, wear and tear. The car many normally suffer these losses so they are excluded.

(iii)

Mechanical failure. This refers to damage of a motor car part. Suppose steering is broken then insurer is not responsible. But insurer is responsible to pay for accident caused by broken steering.

(iv)

Damage to types. Damage to tires are excluded. But if car is totally damaged with damage to tire then it is covered. The damage to tires is included in the value of car‘s damage.

2. Liability to Third Party. Under this section the policy provides indemnity to the insured if there is an accident. The accident may be caused by the motor car or it may arise out of the use of car. The amount of indemnity for this section is calculated by adding all expanses of the third party suffering bodily damage or death. It includes the damage to the owner and other occupants of the car. Different types of damages are: a) Death of or bodily injury to any person, to the occupants of the car and compensation to be paid to the driver. b) Damage to the property of the insured. c) Legal costs incurred by insured with consent of the insurer regarding damage. Exceptions. 1. The occupants of car for hire or for a fare are not covered. Like that if an occupant employee dies in the accident this is excluded. He will be covered by Workmen‘s Compensation Act. 2. Damage to property of the insured helds in trust

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or for custody or simply controls is not covered. However, policy can be extended to cover other risks by special clauses in the form for additional premium. Extension of cover. At insured‘s request and for appropriate premium the following extensions can be made for indemnity to other drivers and indemnity while driving ‗other cars‘. In the first case any driver driving the car will get indemnity if drivers with insured‘s order or permission. 1. But the driver should not be entitled to indemnity under any other policy (From Workmen‘s Compensation Act). 2. He must fulfill all conditions and terms of the policy6 as are applicable to insured. This extension is necessary because section 24 of Motor Vehicles Act does not allow any driver to drive without insurance. But relatives of owners and his friends may generally use a Motor Car. This section covers all who drive the car with knowledge and consent of the owner. It covers car owned under hire-purchase terms also. The H.P contract gives ownership to the purchaser only after payment of last installment. But insurance covers risk from the beginning of price of the hirepurchase contract. Insurer’s Duty. 1. In the event of death of any person, insurer should pay to his legal representatives i.e., indemnity. They must fulfill the terms and conditions of the policy like insured. 2. Insurer must arrange for representation at any Inquest or Total Enquiry in respect of any death. 3. He must defend the proceedings in the court of law regarding insurance. 3. Medical Expenses The insured can get up to Rs.350 for medical expenses relating to an accident. GFGC, Tarikere

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The conditions for granting expenses to insured are: 1. Expanses must be for bodily injury directly caused by accident. 2. Cause of injury should be a violent accident. 3. Accident must be due to external and visible means. 4. Victim must have insured himself or any occupant of the car. The payment is made on production of bills and vouchers. General Exceptions. These exceptions are applicable to all sections discussed above in comprehensive policy. 1. Contractual liability. The comprehensive policy indemnifies all loss to insured. But loss may arise out of Motor Vehicles Act, Total Accident or common law or form his own contract. Liability from his own contract is not paid by insurer. 2. Even legal liability is excluded under following conditions: (I)

Accident outside the geographical area i.e., India,

(II)

Accident happening after change in ownership use of motor car: (a) using for any other purpose than for social, domestic and pleasure or for business purpose; as, for example, for hire, for racing, speed-testing, carrying goods or motor trade, (b) driving the car by a person other than a driver i.e., person without driving license.

3. Accident happening after change in ownership i.e., after selling. 4. Accident during the use by government. Some examples are given below when government requisitions all private motor cars for its own use: (I)

Flood, storm, earthquakes etc., (II) strike or riot, (III) war and kindred perils; (IV) nuclear risk.

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5. When person driving is drunk or under intoxication. It does not apply to third party liability. Commercial Vehicles This policy is the same as the private car comprehensive policy. But it differs on certain points: Section I. Damage to Vehicle. Policy excludes the following : damage by frost, damage to accessories by burglary, theft, damage by overloading or strain or explosion. Immediate repair authorization is Rs.300. There is a compulsory excess clause. Section II. Third party injury. The differences from private policy are given below: 1. Third party liability amount is limited which was unlimited in private car. 2. The driver, conductor and cleaner are all included of in occupants category and will be indemnified. The employee of consignor is also covered. 3. The use of vehicle will include ‗loading and unloading‘ when vehicle is standing. This is further limited to carriage way. 4. Injury while mounting or alighting of passengers is included. 5. Damage to property of which it is not owner are excluded. 6. Damage to road of bridge etc. excluded. 7. It covers liability arising out of accident due to damage road. 8. Liability for spark or explosion damage is covered. 9. Liability for driving other vehicles is excluded.

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The following are excluded from cover: (i)

Consequential loss (indirect loss). This policy covers direct loss caused by an accident. As for example, cost of transportation in some other means during repair of a vehicle is consequential and excluded.

(ii)

Depreciation. Loss due to depreciation is natural. It is not accidental or fortuitous event so excluded.

(iii)

Mechanical/Electrical breakdown, failures, breakages. Mechanical damage is the same as depreciation and excluded. But subsequent damages due to accident caused by mechanical breakdown are covered. As for example, if steering breaks, the cost is not paid but subsequent damage or loss to car is paid.

(iv)

Damages to tires. It is subject to damage, so not payable. If the car is damaged and the tires are also damaged, then 50% of the cost of replacement is covered.

(a)

Comprehensive Policy for Commercial Vehicle: The general framework of the policy is the same as under the private car comprehensive policy.

Some important differences are: (i)

Loss or damage by frost is not covered.

(ii)

Loss or damage to accessories by burglary, house breaking or theft is not covered unless motor vehicle is stolen along with accessories.

(iii)

Damage caused by overloading or strain or by explosion of the boiler is not covered.

(iv)

The limit for immediate authorization of repairs by insured is Rs.300.

(v)

There is a compulsory excess is respect of each and every claim in case of taxis, public and passenger buses etc.

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There are in all nine conditions in a commercial vehicle policy. Eight are the same as those of private car policy. But the ceiling of compensation or maximum is Rs. 1 lack so all sorts of limitations are given so that insured cannot get than Rs. 1 lack under any circumstances. General Exceptions. These are excluded from both private and commercial comprehensive policies: 1. Excludes liability accepted by insured by special contract (not coming under legal liability). 2. Accident or liability occurring outside the geographical area (India) and used for prohibited purposes, i.e., by other than driver and for purposes not domestic or social or personal. 3. Accident takes place after termination of insured‘s liability in vehicle. Example : he has sold it already. 4. Accident during serving government, flood, storm, strike, war and nuclear risk. 5. Car driver under intoxication or drug. THE MOTOR VEHICLE ACT, 1939 Scope of Insurance: In order to safeguard the interests of pedestrians, the Motor Vehicle Act introduced compulsory insurance. The insurance of motor vehicle is not compulsory, but the insurance of third party liability arising out of the use of motor vehicles in public places, is made compulsory. The Act says that no motor vehicle can play in a public place without this insurance. For the purpose of the Act some terms are used in specific sense: ‗Vehicle‘ is any mechanically propelled land vehicle (and its trailer) not running on rails. ‗Third party‘ is anybody other than insurer and insured.

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‗Property‘ refers to and includes roads, bridges, culverts, cause-ways, trees, posts and milestones. ‗Conductor‘ is a person engaged in collecting fares from passengers and regulating their entrance and exit. ‗Stage carriage‘ is a motor vehicle adopted to carry more than 6 passengers excluding driver for separate fare per person. ‗Public service Vehicle‘ is any vehicle adopted to carry passengers for hire. ‗Public carrier‘ is an owner of transport vehicle and used for the transport of other person goods at any time in any public place for hire. Necessity for Third Party Insurance Section 24 (motor vehicle act) provides that no person shall use(except as a passenger) or allow any other person to use, a motor vehicle in a public place, unless the vehicle is covered by a policy of insurance according to the Act. Public place is a place where public has right to enter including bus stop. Stationary parking in such a place also is a use of public place. Such use or driving is prohibited in Act. The purpose is that every motorist must insure certain liabilities that he may incur due to using vehicles in public places. The liabilities which require compulsory insurance are as follows: (a)

Liability for death or bodily injury of a third party or damage to his property.

(b)

Of passengers carried for hire;

(c)

Of passengers carried by reason of a contract of employment.

(d)

Of an employee under Workmen‘s Compensation Act: (i) who is driving the vehicle; (ii) working as conductor or ticket examiner; (iii) carried in vehicle (goods carriage).

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Exceptions. The compulsory insurance does not apply to any vehicle owned by the Central/ the State governments used for government purpose without any connection with commercial enterprise. Two conditions must be complied with before exceptions are made. (i)

Appropriate government authority should order for exception.

(ii)

Granting authority must be satisfied that a fund is established by owner for meeting liability out of the use of vehicle. Then only exception is given.

Requirement of Limits of Liability. A policy is meant to cover only liability incurred of any one accident up to the following limits. Where the Vehicle is: (i)

A goods vehicle(under Workmen‘s Compensation Rs.1,00,000 in all with less than 6 passengers). Driver, over and above this is covered.

(ii)

A hire passenger vehicle Rs.15,000 to each passenger for contract of employment.

(iii)

A vehicle of any other type: Rupee value of actual liability.

(iv)

A vehicle of any class causing damage to property of third party Rs.6,000.

Requirement of Commencement and Termination Insurance takes effect from the time the issues a certificate of insurance to the person by whom policy is taken or insured. The prescribed form, and rules will be discussed later. Period of insurance cover can be terminated or suspected before the end of policy period. The insured has to deliver the certificate to insurer within 7 days after termination. The insurer may cancel or suspend by notifying the registration

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authority within 7 days of that action. For any loss of certificate an affidavit is required as evidence. Transfer of ownership. When insured proposes to transfer ownership by sale with insurance policy of the vehicle he has to apply to insurer for transfer. The transfer is deemed to be allowed if insurer does not refuse within 15 days of receipt of application. Usually the insurer allows transfer. But in the following cases he may refuse a transfer. He shall refuse if he feels that refusal will be necessary because of: 1. Previous conduct of the person (i) as driver; (ii) as a policy holder. 2. A condition in the policy providing for refusal, or prohibiting transfer. 3. Any proposal of the transferee for insurance having been rejected earlier. After sale the insurer has no liability on behalf of the seller. But Act is strict and does not relieve the insurer from liability toward third party. New owner‘s liability is not covered till old certificate is cancelled and new owner fills in the proposal form. So the insurer gives a notice of 15 days to the insured after receiving his application for transfer. During this period the seller should surrender his insurance certificate and buyer should take the new policy. Insurer’s Duty to Third Party Section 96(1) provides the duties of insurer to third party. The third party liability is awarded by court. By the court‘s judgment the third party gets a decree for compensation against the insured. On the strength of this judgment insurer pays money to third party. This payment includes compensation, costs, and interest. The highest limit is the insured amount. The third party cannot get more than insured amount. The insurer is bound to pay the third party. The insurer cannot avoid liability though he could have cancelled or avoided the policy. These rights do not

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apply against third party. Insurer has one right. He must receive the notice of proceedings of the case or appeal against execution of court‘s order. Insurer’s Rights 1. The insurer can plead to be a party in the case and defend his position. The grounds on which he may defend are given below: He may avoid liability if court agrees: (a)

If certificates of insurance is surrendered by insured (before the event); or

(b)

If the person who was issued the certificate has given an affidavit that he lost or destroyed the certificate, or

(c)

If insurer has notified for cancellation of certificate before or within 14 days from the date of accident and has informed the fact to registration authority within 7 days of cancellation.

2. The insurer may defend the proceedings if insured has broken any condition of the agreement in policy. The conditions are: (i)

Insured has broken condition of use of vehicle. If he uses vehicle for purposes not included in permit. As for example, private car used for hire;

(ii)

Insured uses vehicle for racing or speed testing;

(iii)

Insured misuses permit of routes and purpose in transport vehicle;

(iv)

Insured allows unlicensed or disqualified persons to drive the vehicle;

(v)

Policy does not cover war, civil war, riot which caused the damage to third party;

(vi)

Policy was obtained by misrepresentation or non-disclosure of material facts by insured.

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Rights of Third Parties Against Insurer when insured is insolvent. Section 97 provides that if insured is a company and becomes insolvent, the third party automatically gets all the insured‘s right against insurer. Insurer will accept all liability of third party as if he is the insured. Two things may happen: 1. The liability agreed by insurer to insured under policy may exceed the liability of insured to third party. The insured‘s claim for balance is available against insurer under policy. That amount of third party liability the insurer has to pay in case of damage. 2. If the liability agreed by insurer to insured under policy is less than the liability of insured to third party the third party‘s rights against insured is not affected. That means insured has to pay the balance. 3. If the injured third party gets a decree against an insured, he may get compensation direct from insurers. Injured party is not affected by insolvency law. So he does not become an ordinary creditor and prove his debt to get a share of insured‘s assets. Any settlement of claims between insurer and insured is invalid if it minimizes the third party‘s rights. 4. Section 102 says if the insured dies after incurring third party liability then claims will be recovered from insured‘s estate i.e., from legal heir or insurer. The company will indemnity the insured‘s personal representative according to policy if insured dies. 5. Section 98 casts a duty on person incurring a third party liability to disclose all particulars of his insurance. That means third party has a right to get all particulars from insured and may in respect the policy and other documents from insurer also.

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6. According to section 109 the registration authority or the officer in-charge of police must give the identification marks of vehicle, name and address of the user at the time of accident. This information can be required by third party and insured also. Motor Accidents Claims Tribunal Section 110 gives power to state governments to constitute such tribunals. This body helps to despite of third party claims speedily, at minimum cost. The president is equal to the rank of a District judge or High court judge. A nominal fee is charged by tribunal for a suit. It has no court fee based on value of suit. All third party claims for personal injury and property damage up-to Rs.6,000 have to be filed with tribunal. Claims above Rs.6,000 may be referred to civil court if claimant desires. Parties Entitled to claim compensation Section 110-A provides the information. It can be filed by (a) person injured, or (b) in case of death by any or all legal representative of the deceased. Any one of the representatives may represent all those who are not respondents to the application. Application be made to tribunal which has jurisdiction over the area of accident. It should be in proper form with all particulars. It must be made within 6 months of the accident. Tribunal may waive the period if satisfied on the cause of delay. Appeal against award of tribunal can be made to high court with 90 days of the award. But no appeal lies against a dispute of Rs.2,000. Where compensation claim falls under Motor Vehicles and Workmen‘s Compensation Act it can be done under either one but not both. Civil courts has no jurisdiction to accept application for compensation if tribunal is there in that area. Tribunal has all powers of a civil court of the purpose of taking evidence, oath, examining witness, and compelling production of documents. It gives an award of compensation which it considers just.

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UNDERWRITING CLAIMS Importance. It is unprofitable class of business. In credit years the claims experience shows signs of deterioration i.e., proportion of claims to number of insurance is on an increase. The reasons are: 1. Increase in number of vehicles. 2. Traffic density 3. Higher cost of labour, and 4. Spare parts. The awards for third party claims are also increasing. Under this circumstances control of cost of claims is most important for insurer. Steps in Underwriting. Underwriting means accepting insurance proposals. All proposals are not equally acceptable. So the process of selection proceeds through several stages. The proposal, therefore, passes through stages mentioned under before finally accepted: 1. Close scrutiny of completed proposal forms; 2. Rating and underwriting decision, i.e., to accept or reject; 3. If accepted what risks are to be covered; and 4. Under what terms and conditions. Factors. It is usual to consider motor underwriting under following heads: 1. The vehicle 2. The use of the vehicle 3. The geographical area of operator 4. The driver of the vehicle GFGC, Tarikere

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5. The claims experience Table Showing Fresh Acceptance-Comprehensive cover for Different age of Vehicles

Without Inspection Subject Inspection

to

Inspection with Compulsory Excess

Renewal on normal terms

Taxi

Private carrier

Public carrier

Up-to 3 years

Up-to 5 years

Up-to 5 years

Up-to 5 years (except for earning 30% No claim discount Over 5 & up-to 7 years, Excess of Rs. 500 (without discount); over 7 T/P act only cover) Subject to satisfactory claims experience up-to 10years; over 10years T.P./and act only cover.

5-7 years

5-7 years (subject to no claim discount or excess clause)

5-10 years Excess Rs.500

Subject to satisfactory claims experience up-to 12 years; over 12years T.P./Act only

Motor cycles and scooters Up-to 5 years 6-7 years (satisfactory inspection)

Over 7 years T.P./Fire & theft only

Subject to satisfactory claims experience up-to 10 years; over 10years T.P./Act only and subject to compulsory excess of Rs.1,000 (without discount)

Subject to satisfactory claims experience up-to10 years; over 10years renewals for T.P./act only.

No Claim Discount This is granted to improve underwriting experience. It is an integral part of rating system. This operates to return a proportion of insurance premium to the insured if the insured has put up no claims for damage over that particular period of

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insurance. The insurers feel that system encourages carefulness among insured and low claims. The factors to be considered are given below: 1. Claims mean paid and outstanding. Claims take 3-5 years to be settled. So the system should effectively estimate the claims of future. 2. After estimating claims cost, the ratio of incurred claims to premium in each class is calculated. This is used to measure underwriting experience and future rates by the insuring company and tariff advisory committee. Statistics for a long period is required. 3. Past loss experience needs interpretation in the background of changing conditions in motor insurance. Figures are adjusted to cover the changes in increase of number of vehicles, population road construction, changes in law, and third party claims. 4. The statistics must be correct and quickly available. Old statistics are useless. Loss Minimization: Insurance and Road Safety On an average 1, 20,000 road accidents are caused and 21,000 are fatal. Several departments are interested in road safety (police, Public Works Department, Transport Registration Authority, Road Research Laboratories, other organizations, All India Motor Congress, Road Transport Operators Association. Automobile Manufacturers, Vehicle Owners and users and pedestrians). Insurance has an indirect role only in preventing accidents.

It can be found out in the: 1. Premium rating to encourage less prevention by paying discount in premium for an accident free record. Incentives may result in reduced cost of insurance and encourages careful driving. GFGC, Tarikere

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2. System of underwriting through careful ‗risk selection‘ and ‗risk improvement‘. Bad driver gives penalty rate by ‗compulsory excess‘, older vehicles are accepted after inspection and for restricted cover only. By these measures the insured becomes personally interested in risk reduction. 3. Loss prevention association. This is established by general insurance industry. It creates awareness for the need for loss prevention in various sectors of the economy. 4. The association has intensive programmes for: a) Awareness of road safety, b) Traffic rules for pedestrians, c) Driver‘s education programme for defensive and children‘s safety. 5. Association collaborates with national safety council and central road research institute, the Automobile Association and traffic police; and publication of many booklets. All accidents occur for ‗human cause‘, ‗physical cause‘ and ‗environmental cause‘. From this we may say there are four primary factors responsible for road accidents-the driver, the vehicle, the pedestrian and the road. The largest number of accidents is caused by driver. Some of the recommendations for reducing accidents of the Transport Development Council of Ministry of Shipping and Transport are: (i)

Strengthening or creating facilities for highway testing

(ii)

Planning, design and construction of road facilities.

(iii)

Adequate, proper and systematic maintenance of National Highways and others.

(iv)

Creation of traffic Engineering Shells.

Procedure of Claims Settlement The third party liability claims have to follow the following: GFGC, Tarikere

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1. Entry of Notice. When notice of claim is received (from any: the insured, the third party or the motor accidents claims Tribunal), it is recorded in claims register. Entries of date of intimation, claim number, policy number, period, date of accident, vehicle number. 2. Appointment and Entrustment to advocate immediately the case is given to an advocate maintained or returned by company. 3. If claim is received from MACT a letter is issued to MACT to get details of the claim information necessary for the case like claim number, police station of report, driver, advocate, number of policy and driver‘s prosecution history. 4. Letter to police station for police report or panchanama statements on accident. 5. Copy own damage ‗claim from insured‘. 6. Quantum of damage 7. Advocate‘s opinion. 8. Motor accident claims tribunal Payment of Claims Payment of motor third party claims depends upon answers to two following questions: i.

Is the insured legally liable to third party? (Law of negligence and Nuisance)

ii.

Is the insurer liable to indemnity the insured under the (terms and conditions) policy? (Motor Vehicles Act).

Negligence and Proof of Negligence Thus insurer has to pay compensation to the insured if he has agreed in the policy. The insured will pay to third party for his conduct if it is proved to be negligent or a nuisance. Thus we should know the meaning of negligence. Negligence is breach of general duty which every person in a society owed to every other person,. This duty is not to cause bodily injury to him or damage to his property. Legal definition of negligence is ―the omission to do something which a GFGC, Tarikere

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reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do or the doing of something which a prudent and reasonable man would not do‖. Owner is not reasonable without negligence. As for example a person bent upon committing suicide jumps before a car in motion and kills himself. The owner cannot be tied with liability. So negligence must be proved. It arises out of: a) Dangerous and reckless driving without proper safeguard to pedestrians. b) Non-observation of traffic rules and regulations. c) Leaving motor vehicles unattended on highway without safety. d) Defective vehicle. Employer is responsible for servant‘s negligence in addition to his. Own particularly in commercial vehicles. But the person must be really a servant and acting within the scope of his employment. Persons Who Can Claim Persons who can put up claims: 1. Pedestrians: They can use footpath, a part of road and cross and road. 2. Fare paying passengers: In public carriers of passengers. The operate must have roadworthy vehicle and competent driver. Responsibility starts with entry of passenger and ends on his alighting. 3. Non-fare paying passengers: Owner must provide safe mode of conveyance. 4. Persons in other vehicles: Drivers of other vehicles, owners or passengers. 5. Children: Children need extra care. They are not as careful as adults. Proof of Negligence. Claimant must prove insured’s negligence. There are two exceptions to this rule:

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a) Res Ipsa Loquitar. Things speak for itself. In this case the defendant must prove that he was careful or not negligent. The presence of vehicle on footpath is quite consistent or fitting to negligence. As for example A car jumps to footpath and kills pedestrians needs no proof of negligence to prove liability. b) Strict liability. Principle of absolute or strict liability for accidents caused by inherently i.e., things dangerous. It applies to steam driven engines. Mere proof of escape of fire is sufficient to fix liability. When Negligence is Waived? Under following circumstances negligence is not proved: 1. Volunteer Non-fit Injuries. If a person voluntarily wants to take a risk. Passengers in public service usually take incidental risk of such transport. 2. Act of God. It is a direct, violent, sudden and irresistible act of nature, e.g., storms, lighting, earthquake etc. 3. Inevitable Accident. Accident which occurs inspite of all ordinary care, caution and skill. 4. Emergency. Injury to person who places himself on a imminent situation of danger. Contributory Negligence. The injured person has contributed to the accident. The damages will be reduced according to the degree of blame attaching to each person. The insured may defend his claim. Damage. It is defined as a monetary compensation recoverable by an injured party by action for breach of contract or for tort. If negligence is established damages are awarded against insured. Two types of damages:

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(a)

Special Damages. Actual financial loss or expenses resulting from the accident, e.g., Medical, loss of salary, and income, funeral expenses, etc. These are to be specially proved and supported by vehicles.

(b)

General Damages. Law presumes that these damages flow from negligence. These are awarded for pain, and suffering, mental and nervous shock, loss of amenities in Life, Continuous loss of health, loss of prospective earnings, loss of matrimonial prospects.

General Damages for Death. In fatal accidents compensation as assessed under two heads: i.

Loss of dependents, i.e., for maintenance,

ii.

Loss to deceased estate i.e., loss of savings.

Amount i.

First annual amount of dependency i.e., what deceased would have spent on is dependents is estimated.

ii.

This figure is multiplied by 12 or 15 (multiplier) as the number of years (the years purchase factor)

The fatal cases involve the following claims: a) Special damage upto the date of death. b) Funeral expenses. c) General damages for pain and suffering upto day of death. d) Damages for loss of expectation of life. e) Damages under the fatal Accidents Acts. Principle of award. (house of Lords In West (H) and Sons Ltd. V. Shephared,1964)

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a. It is treated as a deprivation, damage varies directly with gravity of deprivation. b. Three consequences to be considered:- (i) loss of earnings or earning capacity; (ii) expenses to pay others for doing his own work;(iii) loss of enjoyment of life or decrease in full pleasure of living. c. Gravity and degree of deprivation i.e., loss of one or more limbs, duration of deprivation and degree of awareness. Madras High court upheld the principle of restitution of integrum (placing in original financial position). Damage should be fair in valuation. Property Damage. The damage us equal to cost of repair or cost of replacement of the property so that original value of estored. In complete destruction value of property on the day of accident. If it is damaged: a. Cost of repairs, b. Depreciation in its value; c. Cost of hiring alternative property. To sum up, damage is equal to cost of repair or the value whichever is less, ,(b) depreciation,(c) reasonable consequential loss. Insurer as a Party to Damage Action Insurer’s Defense. (SS 2 of Sec.96, M.V.Act. Insurer may be a party to the action started by victim of accident under M.V.Act. insurer may say: a) Policy has been cancelled, b) Erasing (repudiating) insurer‘s liability for breach of some conditions, c) Policy is void, e.g. for hiding material facts or material false representation of facts. GFGC, Tarikere

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d) If insurer reserves a right in the policy to defend action in the name of insured, it can raise all the policies that may be open to the insured. e) The MACT [S.S.2(A) of Section 110(C), M.V.Act,19690] is satisfied that there is collision between the maker of a claim and against whom it is made. Then it will record reasons in writing and call insurer to be impleaded as a party. The insurer would be at liberty to avail all defenses open to insured. It has all powers of civil courts. Its procedure is simpler than court. It uses ‗application‘ instead of ‗suit‘, ‗awarded‘ in place of ‗judgment‘. It specifies parties who can apply for claim and prescribes form. It can consider criminal court‘s judgment. It cannot by-pass a decision because it is a statutory tribunal.

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Chapter 5 DATA ANALYSIS AND INTERPRETATION

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SURVEY ANALYSIS This chapter deals with the analysis of data collected from the survey of customer opinions about the POLICIES and PROCEDURES OF GENERAL INSURANCE in TARIKERE. The data has been analyzed with reference to the stages involved in the purchase decision process of consumers vise; need arousal, information search, and evaluation of alternatives, purchase decision and post purchase behavior of customer. In the case of study on consumer behavior the respondents play vital role. Individuals and groups who satisfy their needs by obtaining products or value from enterprises involved in the manufacture of such products or provision of such services are called consumers. In this chapter, we have analyzed the data of respondents. This would necessitate obtaining the accurate demographic profile of the respondents. A convenient sampling technique was made use of for this survey and the number of respondents chosen was 100.

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1. Age: Age Below-20

Male 15

Female 15

Percentage 30%

20-30

25

05

30%

30-40

20

05

25%

Above-40

10

05

15%

Total

70

30

100%

Age

Age 100 80 60 40 20 0

Male Female percentage below-20

20-30

30-40

above-40

Total

INTREPRETATION: From the above table shows the 30% respondents are below the age of 20. 30% respondents are between the age of 20 to 30 and 25% respondents are between the age of 30 to 40. 15% respondents are above the age of 40. This above table shows the 70% of Male respondents and 30% of Female respondents.

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2. Qualification: Qualification

Male

Female

Percentage

Below P.U.C

05

05

10 %

P.U.C

15

10

25%

Graduation

10

10

20%

Post-Graduation

15

05

20%

Other

15

10

25%

Total

60

40

100%

Qualification

Qualification 70 60 50 40 30 20 10 0

Male Female Percentage

INTREPRETATION: From the above table shows the 10% respondents are below P.U.C. 25% respondents are between P.U.C and 20% respondents are GRADUATION . 20% respondents are POST-GRADUATION. 25% respondents are other education. This above table shows the 60% of Male respondents and 40% of Female respondents.

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3. Occupation: Occupation Agriculture Asst. Professor Driver Lecturer Student Teacher Total

Male 10 05 05 10 20 10 60

Female 10 05 05 10 10 00 40

Percentage 20% 10% 10% 20% 30% 10% 100%

Occupation

Occupation 60 50 40 30

Male

20

Female

10

Percentage

0

Interpretation: From the above table shows the 20% respondents are Agriculture 10% respondents are Asst. Professor and 10% respondents are Driver. 20% respondents are Lecturer. 30% respondents are Students. 10% respondents are Teacher. This above table shows the 60% of Male respondents and 40% of Female respondents.

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4. Annual Income: Annual Income

Male

Female

Percentage

0-5,000

05

05

10%

5,000-10,000

15

05

20%

10,000-15,000

05

00

5%

15,000-20,000

10

10

20%

20,000-25,000

35

10

45%

Total

70

30

100%

Annual Income

Annual Income 70 60 50 40 30 20 10 0

Male Female Percentage

Interpretation: From the above table shows the 10% respondents are below 5,000 Income 20% respondents are 5,000 to 10,000 income and 05% respondents are 10,000 to 15,000. 20% respondent‘s are15, 000 to 20,000. 45% respondents are 20,000 to 25,000 incomes. This above table shows the 70% of Male respondents and 30% of Female respondents.

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5. Types of Vehicle Owned: Types of Vehicle Two-Wheeler

Male 40

Female 15

Percentage 55%

Three-Wheeler

20

0

20%

Four-Wheeler

20

5

25%

Total

80

20

100%

Types of Vehicle 80 70 60 50

Male

40

Female Percentage

30 20 10 0 Two-Wheeler

Three-Wheeler

Four-Wheeler

Total

Interpretation: From the above table shows the 55% respondents are having Two-Wheeler 20% respondents are having Three-Wheeler and 25% respondents are having FourWheeler. This above table shows the 80% of Male respondents and 20% of Female respondents.

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6. Types of Insurance: Types Insurance Package

of

Liability Total

Male

Female

Percentage

50

15

65%

15

20

35%

65%

35%

100%

Types of Insurance

Types of Insurance 70 60 50 Male

40

Female 30

Percentage

20 10 0 Package

Liability

Total

Interpretation: From the above table shows the 65% respondents are having Package of Insurance and 35% respondents are having Liability insurance. This above table shows the 65% of Male respondents and 35% of Female respondents.

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7. Charged Insurance value is sufficient: Insurance Value Exactly

Male

Female

Percentage

25

05

30%

Average

35

10

45%

Low

00

00

00%

High

20

05

25%

Total

80

20

100%

Insurance Value is Sufficient

Insurance Value Is Sufficient 60 50 40 Male 30

Female Percentage

20 10 0 Exactly

Average

Low

High

Total

Interpretation: From the above table shows the 30% respondents are Exact Value 45% respondents are Average Value and 25% respondents are High Value of the Insurance. This above table shows the 80% of Male respondents and 20% of Female respondents.

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8. Did you met with an ACCIDENT? Accident

Male

Female

Percentage

Yes

00

00

00%

No

70

30

100%

Total

70

30

100%

Met with an Accident?

Met Accident 70 60 50 Male

40

Female 30

Percentage

20 10 0 Yes

No

Total

Interpretation: From the above table shows the 00% respondents are Met with an Accident and 100% respondents are Not Met With an Accident. This above table shows the 70% of Male respondents and 30% of Female respondents.

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9. If yes, did you face any problem to claim the Insurance amount? Insurance amount Too much

Male

Female

Percentage

00

00

00%

Not Too much

05

00

05%

Not much

55

40

95%

Total

60

40

100%

Insurance amount

Insurance amount 60 50 40 Male 30

Female Percentage

20 10 0 Too much

Not Too much

Not much

Total

Interpretation: From the above table shows the 00% respondents are Too-Much Claim amount 05% respondents are Not-Too Much Claim amount and 95% respondents are NotMuch Claim amount. This above table shows the 60% of Male respondents and 40% of Female respondents.

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10. Are you satisfied with services? Satisfied service Good Average Bad Total

Male 40 25 05 70

Female 10 10 10 30

Percentage 50% 35% 15% 100%

Satisfaction level

Satisfied Level 70 60 50 Male

40

Female 30

Percentage

20 10 0 Good

Average

Bad

Total

Interpretation: From the above table shows the 50% respondents are Good service 35% respondents are Average service and 15% respondents are Bad service. This above table shows the 70% of Male respondents and 30% of Female respondents.

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Chapter 6 FINDINGS, SUGGESTIONS AND CONCLUSION

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Findings  80% of the respondents have vehicles and 20% of respondents do not have vehicles. By this general insurance companies knows potential customers for their products.  65% of respondents are take the only for vehicle it means that package insurance policy of vehicle. 35% of respondents are take the both the vehicle and man holding the vehicle and also third party insurance is considered.  The charged value of Insurance is sufficient 30% exactly is use to this one. 45% respondents are charged Average value is sufficient. 25% respondents are charged value is high in the value.  Mainly the respondents are 100% no accident.  Main problem is arises claim the Insurance amount 95% respondents are not much in claiming the Insurance.  55% of the vehicle owned for two categories one is male respondents are 40% and female respondents are 15% of having two-wheeler.  And 20% male‘s respondents are having four-wheeler and 5% females respondents are having four-wheeler.

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Suggestions Respondents do not have enough knowledge about the insurance policies provided by the General Insurance. Therefore General Insurance Company should bring awareness in the customers. The suggestions I would like to make are:  There is a necessity to make more advertising and promotions by the Insurance Company through TV, newspapers, magazines and pamphlets to make aware the customers about the insurance provided by them.  Need for proper channel to reach to the customer.  Marketing executives and agents should maintain good communication with the customers to create the awareness of the policies like Mediclaim, GPA(Group personnel accidental) burglary, and other insurance policies provided by the company.  The employees should be given incentives and bonus to motivate to accomplish their targets.  General Insurance is concentrating only urban areas it should concentrate on semi urban and rural areas also.  As it was found that customers preparing only Government companies for their office insurance so create trust in costumers about private insurance companies by rendering good services like proper claims, good response to costumer queries and maintaining good relationship with costumers.  Building internal technical expertise requiring well –stacked library resource by way of settled cases of claims at every zonal office is an immediate necessity.  The staff of the insurers should be encouraged to refer to these references often with a view to bring about early settlement to the satisfaction of claimants.

GFGC, Tarikere

83

 People are satisfied with value added service like through message, telephone customer told about new product and they have to do next payment of policy more service should provided to them on screen alert for new product.  Generally people of services doesn‘t go for investment but at year end they go for big investment to save taxes let makes them aware from starting of year to save more tax.  Well service people have good idea about the product but business people don‘t have as they are not aware about so there should some type of meeting to held on holiday on which they given information in those.  People should give those which can fulfill by company only.  As we see that most of investor are from service as want to save tax so better product can be offer to them in get good return.  As people are more interested to invest in life time super plan as it give good return so new product should launched taking basis of it.  As we can see people are satisfy with relationship manager as they suggest good plan to invest so that they should provide better advice to them.  People are dissatisfied with the fund charges as they don‘t know how charges made so there should be transparency so that they can know it.  They have to make it more transparent.  They have to publish their portfolio more frequently.  More collaboration with banks.  Personnel assistance to client

GFGC, Tarikere

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CONCLUSION

It is concluded from the survey that all respondents are aware about office insurance and they think they need insurance for their offices. It is concluded from the survey that customers preparing only Government companies for their office insurance so create trust in costumers about private insurance companies by rendering good services like proper claims, good response to costumer queries and maintaining good relationship with costumers. Most of customers are using only Fire and electronic equipment insurance policies so marketing executives and agents maintain good communication with the customers to create the awareness of the policies like Mediclaim, burglary and GPA.

GFGC, Tarikere

85