Frequently Asked Questions (FAQ)
1. What is Insurance?Insurance is a device which provides financial compensation for the effects of loss or damage caused by operation of the insured risks. Insurance, in modern term, can be defined as a risk transfer mechanism whereby the one who is exposed to risks transfers all or some part of it to an Insurer. The Insurer charges premium as a consideration of his undertaking to compensate the fortuitous loss caused by the insured peril(s).
2. What are the different types of General Insurances Policies?
They are fire and allied perils insurance, household insurance, burglary and housebreaking insurance, personal accident insurance, cash in transit insurance, fidelity guarantee insurance, marine cargo/transit insurance, medical insurance, travel insurance, aviation insurance etc. etc.
3. What is the difference between a Personal Accident Insurance policy and a Life insurance Policy?
A life insurance policy is an expensive policy (with cumulative return upon maturity along with bonus) which covers death caused by illness, injury and natural death too but non-life insurance's personal accident insurance covers death caused by violent visible external means only.
4. What is excess mentioned in the policy?
It is a deductible which is deducted from each and every claim assessed under a given policy.
5. What is the Sum Insured and how this should be fixed and why?
The sum insured is the amount for which a given property is insured. This amount should be fixed in accordance with market price so that in the prevailing event of the claim, the insured gets optimum indemnification.
6. What is under insurance?
If the sum insured for a property insured is less than its market price then it is called under insurance. In this case, the insured gets indemnification on a proportionate basis only.
7. What are the insured and the insurer?
The insurer is the insurance company and the insured is the person who should be the legal rightful owner of the property who gets the insurance from the insurance company.
8. What is insurable interest?
Insurable interest is supposed to exist when the insured is the rightful, legal owner of the property insured. If the ownership is changed, this should be notified to the insurer so that policy can be transferred and insurable interest remains intact.