Published in Mint on 5th February 2018. Written by Abhishek Bondia.
I had lent my car to a friend for election campaigning. However, my friend told me that the car got stolen and he has not lodged a police complaint. Can I file my claim in the normal course? The car was most likely lost near my house so I will be lodging a complaint there.
Please tell me if I should take care of any other formality before filing a claim.
—Sakshi Sharma
If a private car is given out for commercial use then any claim during that period is inadmissible. Further, an insurer would want to establish that all due care was taken to prevent any damage or loss to the insured vehicle. For example, insurers often insists that in case of a theft the owner should be able to present both set of keys.
Report of theft should be filed as soon as possible with the police. Any undue delay in the date of loss and actual filing of a police complaint leads to suspicion by the insurer about the genuineness of the claim. It is unlikely that such a major claim will be paid without a formal police complaint.
A few years ago we had adopted the son of one of our household employees. We want the child’s biological family to have health insurance. Can we include them in our family floater plan?
—Darshan Bhan
Most family floater plans allow cover for immediate family members, spouse, children and parents. In your case there is a direct relationship with your adopted son, who can be insured but you do not have a formal relationship with your adopted son’s biological parents. There are a few insurance companies that may allow them to be covered under your plan with the appropriate disclosures. However, I would suggest that you consider stand-alone health insurance for the two of them. This will also significantly increase their health insurance options for them.
We live in a rented house with a long-term lease (5 years). Can we go for a home insurance policy to protect against damage from natural disasters and fire? The rental agreement makes us liable for damage arising from fire.
—Lalit Wahal
Since you do not own the house, you cannot buy insurance under your name. However, you can purchase an insurance policy on behalf of your landlord. In case of a claim, the claim proceeds will go to your landlord.
Standard fire insurance can cover natural disasters such as earthquakes, floods, and storms. Such covers are optional. You can even buy fire insurance without covering natural disasters.
An alternative is to buy public liability insurance with an add-on for fire damage to rented premises. Typically, such policies have a high deductible and are more suitable for commercial enterprises leasing offices or factory premises.
Recently, motor insurance premiums have come down. However, I bought my policy a week before the new rates were enacted. Can I renegotiate?
—Bani Jain
Once a policy has been issued, you cannot renegotiate the rates. Motor insurance premium has two components: own damage (OD) and third-party rates. Third-party rates are generally fixed once a year at the start of the fiscal year by the regulator. If you miss out on lower rates now, you can likely benefit at the policy anniversary.
Own damage rates are fixed independently by each insurer. These rates are generally negotiable. Own damage rates do not follow a cycle for revision. If you have a favorable claim history, you can leverage this for a lower rate in addition to a no-claim bonus. However, these changes are best when you renew your insurance.
I have recently started supplying a relative with handmade goods that he will sell in the US. While the goods will be insured in transit, is there any other insurance I need to take care of in this transaction? What’s the best way to ensure complete safety? Kindly guide.
—Jignesh Mehsana
You should buy a fire insurance cover for your factory and warehouse. It will cover damages to the goods before they are shipped. Specifically, for the sales transaction, you should buy a trade credit insurance policy in addition to transit insurance. An export trade credit insurance will pay for your trade receivables in case of protracted default or insolvency of the buyer.
Such a policy also covers the political risk. Herein, if due to a regulatory change, you are unable to bring back your money into the country, then insurance would indemnify the loss.
On the transit insurance that you buy do make sure that you have the right level of coverage. Your first preference should be for an all-risk marine insurance.
