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Non Life Insurance FAQs |
 What
are the different ways to buy general Insurance?
What
is the difference between an Agent and a Broker?
What
should I look for in an agent?
Is
it necessary to buy insurance through an agent?
What
services does a broker provide?
What
factors affect the cost of Insurance?
What
is Underwriting?
What
is Reinsurance?
Who
do you file your claim with?
What are the things to be taken care of while filing a claim?
What happens after a claim has been filed?
What impact does a deductible have while settling a claim?
Who keeps an eye on the Insurance companies?
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What
are the different ways to buy general Insurance?
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Through an agent, broker or any other such intermediary.
Anyone using the title broker is usually independent and generally aims to find
you the best deal on the market.
Other intermediaries might just quote the best deal from a fairly small panel of
insurance companies or represent a single insurance company.
You can approach the insurance company directly. If you approach the company directly,
the chances of getting a better rate are very high.
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What
is the difference between an Agent and a Broker??
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An agent is the representative of Insurance Company whereas a broker is the representative
of the consumer or the policyholder.
An agent could be a paid employee of the Insurance Company or could be an independent
businessman.
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What
should I look for in an agent?
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Agents are there to help you.
At the most basic level, any agent should be able to:
a) answer your questions about insurance.
b) provide you with a thorough assessment of your insurance needs.
c) offer you a choice of insurance products to meet those needs.
Also, your insurance agency should provide you with prompt, quality service in the
case of a claim.
Just as important is the level of professional confidence and personal comfort you
feel with the agent.
Many people stick with the same insurance agent for decades, even generations.
It helps to find an agent you can get to know and trust
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Is
it necessary to buy insurance through an agent?
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You can buy many insurance products without help from an agent. Typically potential
policyholders will be contacted by mail, or they can call a toll-free number to
apply for a product. The advantage of this type of distribution system is that expenses
are usually much lower because there are no agent commissions to be paid. These
savings can be passed onto the consumer through lower premiums. The main disadvantage
is that the policyholder does not receive as much, or sometimes any, personal service
either when buying a product or filing a claim
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What
services does a broker provide?
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In general an insurance broker would: Provide pre sales and after sales service
to customers
Provide relevant information to the underwriters for risk assessment and ascertain
the premium
Structure product and design covers that meet the specific requirements of customers
Recommend risk improvement and loss minimization measures
Provide a collection of Premiums
Provide risk management and insurance education.
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What
factors affect the cost of Insurance?
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The factors that can affect the cost of insurance include:
The likelihood of a loss occurring —The greater the probability a loss will occur
the higher the rate. E.g. Floods Insurance in parts of North-east India.
Purchase of a large amount of coverage (that is, if the item you are insuring is
quite valuable) -- The chances are there could be a large claim and the premium
will need to cover that possibility.
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What
is Underwriting?
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Underwriting of a risk involves the consideration of material facts on the basis
of which a decision will be taken whether to accept the risk and if so, at what
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What
is Reinsurance?
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Insurance companies practice the fundamental principle of spreading their risk too.
Further reinsuring the risks that the insurance company has insured does this
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Who
do you file your claim with?
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You file a claim with the insurance company that issued your policy. In case of
policies received on account of your employment you may have to file claims through
the HR administrator.
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How
to file a claim?
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Most companies offer a call centre facility.
Alternatively, you can:
a) contact your agent
b) write to your insurance company intimating the claim.
There is usually a claim form that needs to be filled. This can be:
a) downloaded from the insurance company’s website.
b) be obtained by visiting the insurance company’s office.
c) provided to you by your agent.
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What
are the things to be taken care of while filing a claim?
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Be thorough and exact when reporting damage and always tell the truth. Withholding
vital information or exaggerating the facts can, not only lessen your chances of
the claim being settled to your satisfaction, but also may be considered a crime.
(Insurance fraud costs consumers crores of rupees a year.
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What
happens after a claim has been filed?
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Once your claim has been filed, the insurance company will assign a surveyor. He
or she is charged with investigating your claim and then making a recommendation
to the insurance company. The recommendation can be to accept the claim and pay
the full amount requested, accept part of the claim and make partial payment, or
refuse the claim and make no payment. The insurance company will then make a decision
regarding your claim and notify you of its final decision. The amount of compensation
offered can vary according to the surveyor’s analysis.
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What
impact does a deductible have while settling a claim?
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If you have no deductible, the company will pay 100% on a covered loss.
To understand how a deductible works, consider the following: If the deductible
on your motor insurance is Rs. 1000 it means you agree to pay this amount first,
and your insurance company will pay for damages exceeding this deductible.
By increasing your deductible from Rs. 1000 to Rs. 2500 or even Rs. 3500 this decreases
the insurance company’s risk. This could mean a savings in your
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Who
keeps an eye on the Insurance companies?
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Insurance is a heavily regulated industry.
The Insurance Regulatory and Development Authority controls insurance regulations
in India. In addition to approving rates, the regulatory body is involved in all
insurance matters on behalf of private citizens and businesses.
It issues operating licenses to insurers and agents, based on among other things:
a) ability to meet the requirements for conduct
b) knowledge about insurance issues.
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