Published in Mint on 19th February, 2018. Written by Abhishek Bondia
We live in a small housing cooperative society that has 20 units. Recently, one of the members took a ferocious-looking dog as pet. It is very harmless now but could become a problem later on as such dogs are known to be aggressive. Is there any insurance that can cover future medical costs in case someone is bitten by the dog?
—Tarun Acharya
Standard treatment for minor dog bite is vaccination. Since this is primarily an outpatient treatment, it is excluded in most health insurance policies. A few health insurance policies specifically cover dog-bite related vaccination treatment. While choosing your health insurance plan, you can prefer such plans. However, there are no stand-alone plans to cover dog bites. Separately, dog owners could buy a public liability insurance. In case the dog hurts someone, who in turn sues the owner, the insurance would pay for lawyer fees to defend them. Further, the policy would reimburse any compensation awarded by the court.
Why should I buy a group health insurance plan, instead of asking my employees to buy an individual health insurance plan and get the premium amount reimbursed?
—Dinesh Mishra
A group health insurance plan is easier to administer, is cost-effective and offers higher benefits. In a group plan the policy end date of coverage of all employees is the same, irrespective of their date of joining the firm. This saves the trouble of paying renewal premiums at different dates that vary by employee.
A group plan leverages economies of scale for lower premiums. Depending on the number of employees, a group plan could be 50% more economical than an individual plan. Typical individual insurance plans have several restrictions such as waiting period for pre-existing diseases. A group plan can be customized to cover all illnesses from the first day. Employees value such benefits, as these are difficult to get in individual policies.
I have a car that is 7 years old, on which I get 50% no claim bonus (NCB). Its renewal is due in a few weeks. I am looking to drive it for as long as possible and not sell it in the next year or so. With an old car, is it more advisable to get own-damage (OD) cover with a higher insured’s declared value (IDV) or get lower premium with a lower IDV?
—Anand Nagrani
Impact of IDV is the most for total-loss claims. IDV for each vehicle type is defined uniquely by insurers. Insurers may allow variations in IDV between 10% and 20%.
Both scenarios have their advantages. In case of a total loss such as theft, a higher IDV would indemnify you to a greater extent. This can be used to buy a replacement car. In case of a major accident claim, insurer could consider it as a total loss if the cost of repairs is more than 75% of the IDV. A lower IDV would mean a lower threshold to qualify as a constructive total loss. On balance, my general preference is to be conservative and insure for a higher amount, if an option is available.
I have bought a plot of land in a suburb of Delhi. It is in an area that was notorious for criminal activities though it is becoming mainstream now. There is no construction on it. Can I take an insurance in case that plot is illegally occupied? If yes, how will the premium be calculated? I would like to compare it with keeping a security guard on the premises.
—Rajesh Lall
Such risks could potentially be covered under title insurance. However, such a product is currently not available in India. The insurance regulator had set up a working group to study ways to make this plan available. Some insurers are working to launch this product. Notwithstanding that, you may have an insurance for the property. Any insurance policy expects you to take reasonable care to avoid claim. This would involve keeping a 24-hour security guard.
I had bought a family floater policy when I used to live in Jamshedpur. This year I moved to Delhi. Do I need to update the address in my policy and will that impact my renewal premium?
—Rajiv Sharma
Yes, you must update your address in the policy. This would help in proper communication regarding policy documents, medical cards and claim documentation. For some plans, premium is charged as per location. However, for most insurances, this may not warrant a change in renewal premiums.
A few plans have zone-wise restrictions, for example: co-pay. If you had taken a plan originally in Zone 2, then any treatment taken in Zone 1 cities may attract a 10% co-pay. On moving to a Zone 1 city, you would need to upgrade the plan to Zone 1 to avoid a co-pay. This will require you to pay additional premium to get the upgrade endorsed in the policy. Subsequent renewal premiums would be changed accordingly.
