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Published in Mint on 18th March 2018. Written by Abhishek Bondia.

I have just bought a car, in which the dealer offered free insurance as a benefit. When I saw the insurance later, I saw that it had a few add-ons that are useful but which I may not want to buy when I renew the policy next year. So, when I renew this policy, am I stuck with the options in the previous policy or can I renew the terms? Will this adversely impact my NCB?

Bani Mathur
Add-ons are optional coverage. You can do away with the add-ons at the time of renewal. Some add-ons like zero depreciation coverage are best renewed continuously. If these are dropped once, it is difficult to reinstate them in future years.
No-claim bonus (NCB) is applicable only on the Own Damage premium. It is not applicable on either the third-party liability premium or the add-on coverage. So dropping the add-ons will not impact the NCB adversely. The only add-on that can impact NCB is the NCB protector. With this add-on, you can make a claim in the policy year and still claim NCB at the time of renewal. If you do not make any claim in the policy, then NCB will remain intact irrespective of any add-ons being carried forward in the policy.

I was hospitalized after a trauma injury. After 5 days of hospitalization, when it was time for discharge from the hospital, the settlement from the insurer ended up taking very long, and was eventually settled late in the evening. I want to know that if the claim had not been settled the same day, and I had to stay in the hospital for an additional day, would the insurer have paid for the extra day’s stay in hospital?

—Shankar Talwar
No. Since the extended hospitalization would have been due to a non-medical reason, the insurer would not have paid for the extended stay. In fact, in most delayed cases, the matter gets resolved on the same day.
An insurer typically takes up to 4 hours to process an approval, after the receipt of complete documents. Several hospitals wait until noon to send the discharge summary. If there is any follow-up query from the insurer, closure of final clarifications takes even longer. Due to such delays, the processing of final approval for a cashless claim may come in between 7pm and 8pm.
To ensure that documentation has happened in a timely manner, you may want to ask the hospital to keep you in loop while communicating with the insurer.

I have a ceremonial dagger that has been passed down the generations in my family, and it has now come into my possession. I have kept it in a safe deposit locker and take it out only for special ceremonies. If I want to get it insured, will the insurance agency also take proactive measures in trying to recover it in case of theft, or will it merely pay me the sum assured and the matter would end there?

—Yadavendra Chauhan
An insurer’s primary responsibility is to indemnify the insured in case of a loss. Several insurance programmes help with preventive and recovery measures as well. However, these programmes typically run for larger corporate risks. In case of loss of a personal artefact, insurers would pursue recovery. However, this is likely to be limited to a follow-up with the local authorities.

Recently, I was looking to renew my car insurance from an online portal. After I logged into the system, an agent called back to take me through the process. During the conversation he asked me how much my previous no-claim bonus (NCB) was. I did not remember, so I just gave the figure that first came to mind. I want to know, would the agent have given me any amount of NCB based on my conversation? How will one insurer know how much NCB my previous insurer was giving me?

Shilpi Sarkar
An insurer or agency may give a renewal quote based on verbal confirmation from the client about claim history. However, at the time of buying the policy, the new insurer generally asks for renewal notice. A renewal notice from the incumbent insurer carries the no-claim bonus applicable for renewal. Further, after the policy is placed, it is standard practice for insurers to write to the previous insurer and verify the loss history. In case of a deviation, the insurer may cancel the policy or ask for deficit premium.
At times, the insured may make a claim after the renewal notice is generated. Whether or not it is renewed with the incumbent insurer, it is the insured’s responsibility to forego the NCB. Else, the insurer would later certainly ask for recovery.