Published in Mint on May 01, 2017, Written by Abhishek Bondia
Recently my car was stolen while it was parked outside the house. While the police were able to locate it about 10 km from where I stay, the car had been smashed against a tree and was badly damaged. Will this damage be covered under own damage or third-party? If I claim my own damage, I will lose a no-claim bonus for no fault of mine. Please advice.
—Indra Bannerji
Damage to your car will be covered under your own damage section of your motor insurance policy. Third-party liability only covers damage to someone else’s property or physical self. If you are able to identify the individuals responsible for the damage, you can claim your financial loss from them in terms of compensation. However, you will lose the no-claim bonus of your current policy.
My sister has gone abroad to live there but has left some of her things with me for safekeeping. I want to buy insurance for these but I am not the owner; I am only the caretaker for a while. Can I buy insurance for these things so that in case of loss, I don’t have to bear the expense of replacement? The things include a few paintings (of commercial value) and some imported furniture.
—Uday Kumar
One of the basic requirements for issuing an insurance policy is an insurable interest. In this case, ownership will define the insurable interest. Since the goods are owned by your sister and not you, she has to be the beneficiary of the policy taken.
However, you can make a representation to the insurer to make a payment on behalf of your sister for the policy. Or, she can make a payment directly via online payment methods.
While buying insurance for things like paintings, you should ensure that you buy an all-risk insurance policy, as it will cover you for risks of mishandling and other non-fire related damages.
Is there any insurance available for vintage cars? I want to take one as I am buying a two-door Austin 7 (1934). It will need restoration work as well since it is not in running condition.
—Vidya Kumari Singh
A car manufactured prior to 31 December 1940 and duly certified by the Vintage and Classic Car Club of India can be considered a vintage car for the purpose of motor insurance. Specifically for vintage cars, the policy can be issued on an ‘agreed value clause’. In case of a total loss of the vehicle, the insured is entitled to receive such an agreed value. The cost of restoration could be included while fixing such agreed value with the insurer.
I want to buy a cancer-specific plan. I already have a health insurance floater policy of Rs15 lakh sum assured, with critical illness cover of Rs10 lakh. What are my options and what are the factors I should consider?
—Bindu Sethi
A cancer-specific plan is generally a fixed-benefit plan. In case you develop cancer, then depending on the stage of illness, a pre-defined proportion of the sum assured is paid out.
I recommend that you buy a higher sum assured for a comprehensive critical illness plan rather than a cancer-specific plan. The principal advantage of a cancer-specific plan is that it covers the early stages of cancer whereas a critical illness plan generally covers advanced stages only. However, in your case, expenses incurred for the early stages of cancer could be covered by your family floater policy.
A comprehensive critical illness plan ensures coverage for other major illnesses like heart disease, stroke, and paralysis. These illnesses could be expensive to treat. So, an umbrella plan ensures there are no coverage gaps.
In terms of costs, you need to consider two factors. First, a critical illness plan would be about 30% more expensive. Second, cancer-specific plans are generally offered by life insurers and premiums could be fixed for the term of the policy. Critical illness plans are mostly offered by general insurers, who increase premiums with age at regular intervals.
