Published in Mint on 18th September 2017. Written by Abhishek Bondia
My daughter is learning to drive a car. She has a learner’s licence. Recently, she drove into a wall and the car was damaged. I was sitting beside her. Will my comprehensive car insurance cover the damage?
—Mehak Ranade
Yes, the motor insurance policy covers drivers with valid learning licence. The policy requires that the relevant rules (Central Motor Vehicles Rules, 1989) should be followed by the driver, including being accompanied by a licensed driver.
Are there any health insurance policies that cover Ayurvedic treatments in India? My son is studying Ayurveda. Will he be able to cater to those patients who want the treatment to be paid by their insurance?
—Joji Thampan
Yes, several health insurance policies cover Ayurveda treatments. A few policies would cover such treatments up to the full sum assured, while several policies would limit the expenditure and cap the overall sum assured. But most health insurance policies require that expenditure should be incurred for hospitalization purposes only. This condition may limit the actual number of people your son will be able to serve. Insurers are increasingly introducing OPD benefits into their mediclaim insurances and some of these do allow Ayurveda related OPD to be charged.
My father had built a house in 1980. Unknown to us, one of the sewer pipes had started leaking, and recently, the front lawn caved in. The leakage may have damaged the foundation as well. We have had house insurance for many years now. If there is damage to the house because of this, will the insurer cover it?
—Rajiv Srivastava
Insurance typically covers sudden and accidental loss. Gradual deterioration is not covered under insurance. If there is a loss linked to such gradual deterioration, the insurer may dispute it. Moreover, there is an obligation on the insured to prevent or mitigate situations that could potentially lead to loss. The important aspect here is how you present the case to the insurer. For example, though the leakage may have been gradual, the caving in of the lawn was sudden and that caving in may be responsible for causing damage.
At the time of claim, the insurer would appoint a surveyor to inspect the loss. Surveyors would typically inquire about past losses, and events leading to the loss. A prior loss in the property would lead to further questioning about the causes.
Do note that a typical home insurance covers only losses arising from named perils, which include fire, lightning, riot and flood. Collapse of a structure is typically not covered under standard home insurance. So, if the foundation gets damaged without any linkage to the named perils, it is unlikely to be covered.
I have read reports that health insurance policies only cover hospitalisation-related illnesses. Does this mean treatments such as dialysis and cataract surgery are not covered?
—Umesh Oswal
Most health insurance policies require minimum 24 hours of hospitalization for a claim to be admissible. The exception is day-care surgeries. Surgeries that can be done without hospitalization or less than 24 hours of hospitalization, due to advancement of technology, are classified as day-care surgeries. Dialysis and cataract are common types of day-care surgeries. These treatments are covered in most policies, but those like root canal, or lasik surgery may not be covered due to other exclusions under the policy.
Are there package policies available for businesses? I have a garment manufacturing business, and want to cover any kind of loss arising in my business that is beyond my control.
—Name withheld on request
Insurance policies generally get triggered on occurrence of an incident, which could include fire on property, accidental death of key employees, insolvency of a buyer or legal action by a third party. These incidents are covered through unique products. Generally, you would need to buy a separate policy for each risk area. For example, fire insurance for factory, group personal accident insurance for employees, trade credit insurance for customer defaults, and public liability insurance for property damage incurred by third party due to your negligence. Some insurers offer package policies that may cover multiple risks in one policy. It is, however, unlikely that all insurable risks are covered under one umbrella policy.
Besides covering direct losses, insurance can also cover consequential losses. For example, in case of fire in a factory, insurance can pay for the property damage incurred as well as the loss suffered on account of the factory being shut for the reinstatement period. Such a product is called Fire Loss of Profit.
Market movements such as product obsolescence and lack of demand are not covered under insurance. Similarly, losses from general price fluctuations are also not covered.