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Published in Mint on 8th October,2017. Written by Abhishek Bondia.

I have rented some white goods for a temporary stay in Delhi for 2 years. Is it a wise idea to get insurance for these goods, or will the renting agent do so?

—Shishir Gupta
To buy insurance, you must have an insurable interest. This is typically identified with ownership. Since the goods are on rent, you do not have insurable interest. Do note that insurers typically check for insurable interest at the time of claim and not always at the time of issuance of the insurance policy. The firm that rented you these goods should be able to buy insurance. They can either buy insurance for all their goods or they could buy specifically for goods rented to you. In this insurance policy, the renting firm should get a clause endorsed known as the “goods held in trust” clause.

What are the broad types of wellness programmes that health insurance policies offer? What do these cover, and do they cost more than a policy sans the wellness programmes?

—Mona Shah
Health insurance policies cover multiple types of non-hospitalization expenses. The expenses covered could be either in the form of health check-ups, general out-patient expenses, or vaccinations. Typically, such expenses are subject to a limit within the overall policy sum assured. A few policies define the frequency in which these benefits could be availed. For example, a health check-up could be availed once in every three years.
The price of wellness benefits is built into the premium. There is no separate charge. Where wellness is offered as an add-on, the incremental premium is separately mentioned.

When I bought my health insurance policy some 6 years back, I weighed 75 kg. Now, I weigh around 90 kg. Will this, apart from age, be a factor at the time of renewal? If yes, then if I were to reduce my weight, will I get any benefit of doing so, in the policy?

—Arth Bali
Health insurance policies are guaranteed renewal policies. Insurers cannot deny renewal. Nor can they increase premium for specific individuals. Renewal premium increase is only linked to age. Due to such stringent guidelines around renewal, insurers do not ask for any information at the time of renewal. Any increase or decrease in risk factor thus has no adverse or favourable impact on renewal premium.

What does claim settlement ratio mean for a policy buyer?

Claim settlement ratio can be measured in two ways i.e., on premium and on number of claims. On the basis of premium, claim settlement ratio is total claims settled divided by the total premium received. This ratio indicates insurer’s profitability. If the claims settled is more than the premium received, it would indicate loss for the insurer, and vice versa. Such profitability metric has limited importance for an insurance buyer.
On the basis of number of claims, claim settlement ratio is number of claims settled divided by the total number of claims received. A high ratio indicates that insurer has a favourable disposition towards claims filed by its customers. A policy buyer should prefer insurers with a claim settlement ratio of more than 85-90%.

I have a small business and have been reading about the cyber attacks on enterprises, banks and wallet companies. If my account is hacked, and money siphoned off, would my bank indemnify me or would I have to bear the loss? Are there any insurance policies to cover such losses? How do such policies work?

—Name withheld on request
White collar crime has become increasingly common. Unauthorised access to bank accounts is one of the frequent types of white collar crimes.
There is a specific insurance policy meant to cover such risks, i.e., commercial crime insurance. Under such a policy, losses suffered by the insured for such incidents are covered, especially if it involves connivance of insured’s employees.
Whether or not your bank will cover the loss depends if there has been a deficiency of controls on your part. For example, if access credentials are leaked from your organisation, you would be considered at fault.
Whenever a loss occurs, you are expected to inform the insurer immediately. After the intimation, the insurance company would appoint its representative, which may include forensic experts. They would establish the occurrence of the loss, and prima facie cause. Once these are established by the insurer, policy would indemnify you.