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GENERAL INSURANCE PEDIA Table of Contents CHAPTER 1 : INTRODUCTION TO INSURANCE 01 CHAPTER 2 : LIFE INSURANCE VS GENERAL INSURANCE 03 CHAPTER 3 : PRINCIPLES OF INSURANCE 04 CHAPTER 4 : TYPES OF INSURANCE PRODUCTS 07 CHAPTER 5 : MAKING OF AN INSURANCE POLICY 20 CHAPTER 6 : INSURANCE LANDSCAPE IN INDIA 21 CHAPTER 7 : IRDAI’S VISION 2047 23 CHAPTER 8 : GOVERNMENT SPONSORED INSURANCE SCHEMES 25 CHAPTER 9 : INSURANCE COMPANIES IN INDIA 28 CHAPTER 10 : FRAMEWORK OF HDFC ERGO 29 CHAPTER 11 : INSURANCE LANDSCAPE IN INDIA 31 CHAPTER 12 : GUIDELINES FOR A CUSTOMER 33 CHAPTER 13 : here BY HDFC ERGO 35 CHAPTER 14 : IMPORTANT ABBREVIATIONS 36 CHAPTER 1 INTRODUCTION TO INSURANCE WHAT IS INSURANCE? Life is an adventure, ﬁlled with risks and uncertainties that add excitement to our journey. However, unforeseen events can sometimes knock us oﬀ course. This is where insurance plays a vital role, oﬀering protection to us and the things we cherish, such as our homes, cars, and valuables. Whether its natural calamities like ﬂoods, storms, and earthquakes or man-made disasters like theft, car accidents, and ﬁres, insurance shields us from the ﬁnancial impacts of these risks. At its core, insurance operates on a simple yet powerful idea: by distributing the cost of unexpected risks among a large group of people who share similar exposures, the burden becomes more manageable for everyone. While an accident or ﬁre might deal a severe ﬁnancial blow to one person, considering the entire community, only a few would experience such losses in any given year. By collecting a small contribution from everyone and pooling it together, a common fund is created. This fund is then used to compensate the unfortunate members who suﬀered losses. Essentially, insurance serves as a ﬁnancial tool designed to mitigate the consequences of unforeseen events and create a sense of ﬁnancial security. Anyone seeking to safeguard themselves from potential hardships should seriously consider insurance. Let's illustrate this concept with an example: Number of houses 400 Value of each house `20,000 Houses that get burnt every year (average) 4 Total loss (4 houses x `20,000) `80,000 Contribution to be made by 400 house owners to compensate for loss of 80,000 `200 (80,000 / 400) Imagine a village with 400 houses, each valued at ₹20,000. On average, 4 houses get burnt every year, resulting in a total loss of ₹80,000. To address this, all 400 homeowners decide to join forces and contribute ₹200 each, forming a common fund of ₹80,000. With this amount, they can provide ₹20,000 to each of the 4 owners whose houses get damaged by the ﬁre. As a result, the risk of these 4 owners is spread across the entire community of 400 homeowners in the village. This collective approach ensures that everyone shares the burden, making it a more secure and sustainable way to handle unforeseen challenges. UNDERSTANDING RISKS, PERILS, AND HAZARDS In our daily lives, we often come across stories of unfortunate events and accidents that people have experienced. These incidents can range from falling seriously ill to motor vehicle theft, from accidents resulting in injuries or fatalities to the destruction of homes and belongings due to ﬁre, and even large-scale loss of lives and property caused by cyclones and tsunamis. Throughout history, protecting ourselves, our families, and society from such uncertain events has been a paramount concern. To better comprehend these situations, we use speciﬁc terms to describe diﬀerent aspects of risk: The term "risk" refers to the probability of experiencing a loss due to uncertain events. "Perils" are the events or occurrences that give rise to these risks. For example, ﬁre is a peril because it leads to losses. "Hazards" are factors that increase the likelihood of a peril occurring. For instance, a ﬁreplace is a hazard because it raises the probability of loss from ﬁre. In some cases, certain factors can be both a peril and a hazard. For instance, smoking is a peril because it causes various health ailments, while also acting as a hazard by increasing the probability of such ailments. By understanding the distinction between risks, perils, and hazards, we can make more informed decisions and take proactive measures to protect ourselves and our communities from potential harm. Being aware of these concepts empowers us to mitigate risks eﬀectively and create a safer environment for everyone. 01 WHY BUY INSURANCE? Life is inherently uncertain, and each day brings its share of risks to our well-being, health, property, and more. While we cannot predict when or if something unfortunate might happen, we do have the power to take measures that can alleviate the ﬁnancial impact of ` these risks and provide us with a sense of ﬁnancial security. Insurance serves as a powerful ﬁnancial tool designed precisely for this purpose. It oﬀers a means to substantially reduce the potentially overwhelming ﬁnancial consequences of unforeseen events. By buying insurance, we take a proactive step towards safeguarding ourselves ﬁnancially. The principle behind insurance revolves around the law of large numbers. Through the collective contributions of many individuals in the form of premiums, the losses of a few can be covered. By paying a premium to protect against a speciﬁc type of loss, your secure coverage for a certain sum of money that you will receive if you encounter that particular loss. In essence, insurance grants you the peace of mind and assurance that, in times of need, you won't face the full burden of ﬁnancial devastation alone. It provides a safety net, allowing you to face life's uncertainties with greater conﬁdence, knowing that you have a ﬁnancial cushion to fall back on when the unexpected occurs. Choosing insurance is a prudent and responsible decision, oﬀering protection and support for you and your loved ones in the face of life's uncertainties. 02 CHAPTER 2 LIFE INSURANCE VS GENERAL INSURANCE LIFE INSURANCE Life insurance doesn't directly insure your life, but it safeguards a crucial aspect of it - your income and the ﬁnancial stability it brings to your family. Let's consider both the present and the future scenarios to understand its signiﬁcance. In the present, think about a situation where both of your parents are working, and sadly, one of them passes away. Who would support you then? Could you still aﬀord to live in the same house? And who will take care of the bills? Life insurance steps in to address these concerns by providing suﬃcient funds to cover your family's needs after the sudden demise of a breadwinner. Now, let’s look ahead into the future, suppose you and your spouse take out a car loan or a home loan together. What would happen if one of you passes away? How would the loan be repaid? Life insurance oﬀers a safety net, ensuring that there's enough money to pay oﬀ these debts, alleviating the ﬁnancial burden on your loved ones. Life insurance comes in various types, each serving speciﬁc purposes: Term Policy: This type of policy provides protection against the risk of premature death. The beneﬁt becomes payable only in the unfortunate event of the insured person's death. Endowment Policy: An endowment policy oﬀers protection against death risk and provides a bonus on the maturity of the policy. Beneﬁts are payable either in the event of the insured person's death or upon the policy's maturity. Unit Linked Policies: These policies provide dual beneﬁts of life insurance and savings. A portion of the premium is invested, and the customer enjoys returns based on market performance. Pension Plan: A pension plan oﬀers post-retirement beneﬁts. Individuals contribute a small sum during the policy period based on their income levels and lifestyle. Upon reaching the retirement age, the life insurance company provides a monthly pension to take care of expenses after retirement. In summary, life insurance is a crucial ﬁnancial tool that helps secure your family's future by ensuring that there is enough ﬁnancial support to meet their needs and obligations when you are no longer there to provide for them. GENERAL INSURANCE General insurance, also known as non-life insurance, oﬀers a wide range of insurance covers to protect against various contingencies such as illnesses, property damage, motor accidents, and more. As assets hold their own value and are vulnerable to potential damages, speciﬁc general insurance policies provide a shield to safeguard the economic worth of these assets, preventing substantial ﬁnancial losses. For instance, a home insurance policy can oﬀer protection for your home and its valuable contents against calamities and theft. In the event of an unfortunate incident, such insurance coverage reduces the likelihood of depleting your savings, borrowing money, seeking ﬁnancial assistance from family or friends, or resorting to selling your assets to cover repairs, medical treatments, or outstanding loans. Every family should consider suitable general insurance policies as a crucial measure to protect the property they have acquired through hard-earned income. A loss or damage to one's property can be emotionally devastating, but insurance can serve as a mitigating factor during such trying times. Natural disasters like tsunamis, earthquakes, and cyclones have left countless people homeless and ﬁnancially distressed. While these losses can be devastating, insurance can play a signiﬁcant role in alleviating the aftermath. Similarly, health insurance policies oﬀer ﬁnancial relief to individuals undergoing medical treatment for diseases or injuries, lessening the burden of medical expenses. Most general insurance covers are annual contracts, although some products are available on a long-term basis. There are various categories of general insurance policies, each tailored to cater to speciﬁc needs: Motor Insurance: Provides coverage for vehicles against damages and liabilities arising from accidents. Health Insurance: Oﬀers ﬁnancial support for medical treatments and hospitalisation expenses. Fire Insurance: Protects against losses caused by ﬁre-related damages to property. Marine Insurance: Covers goods and vessels during marine transit against risks like damage and loss. Travel Insurance: Provides protection during travel against issues like trip cancellations, medical emergencies, and baggage loss. Home Insurance: Safeguards homes and valuables inside against calamities and theft. Crop Insurance: Assists farmers by compensating for crop losses due to speciﬁc perils. In conclusion, general insurance is a vital aspect of ﬁnancial planning, ensuring that individuals and families can handle unforeseen events and safeguard their assets and well-being from potential ﬁnancial hardships. 03 CHAPTER 3 PRINCIPLES OF INSURANCE Insurance business is governed by certain guiding principles. The following are the principles of insurance: Insurable Interest Contribution Utmost Good Faith or Uberrima Fides Proximate Cause Indemnity Principle of Loss Minimization Subrogation INSURABLE INTEREST In the context of insurance, having an insurable interest in the property or life being insured is a fundamental requirement. An insurable interest means that the person obtaining the insurance policy must stand to beneﬁt from the existence of the insured property or life and would be adversely aﬀected by its destruction or loss. This principle holds signiﬁcant legal importance, as an insurance contract lacking insurable interest is considered invalid and cannot be enforced in a court of law. The rationale behind this principle is to ensure that the insured party has a genuine ﬁnancial stake in the property or life being insured. It helps prevent situations akin to gambling, where someone takes out insurance on a property or life without any real interest or exposure to ﬁnancial loss in the event of a claim. For instance, this principle prevents individuals from insuring someone else's life with the intention of proﬁting from their death. Let's illustrate with an example: Imagine you own a house, and if it gets damaged by ﬁre, you will suﬀer a ﬁnancial loss. In this case, you have an insurable interest in your own house. However, if your neighbour’s house, which you do not own, is damaged by ﬁre, you may feel sympathy for your neighbour, but you do not have any ﬁnancial interest in their property. Therefore, you lack an insurable interest in your neighbour’s house. Overall, the concept of insurable interest serves as a safeguard against fraudulent or unethical insurance practices. It ensures that insurance is obtained for genuine protection rather than for speculative purposes, thereby maintaining the integrity of insurance contracts and preventing potential misuse of insurance for wrongful gains. UTMOST GOOD FAITH OR UBERRIMA FIDES The principle of Utmost Good Faith, also known as Uberrima Fides, is the cornerstone of insurance contracts. It requires both the prospective insured and the insurer to engage in a relationship of utmost honesty and full disclosure. In essence, an insurance contract is based on complete transparency and accurate communication between the parties involved. Central to this principle is the obligation of the prospective insured to provide the insurer with all relevant and material information pertaining to the risk being insured. Material information refers to any details that would inﬂuence the insurer’s decision in assessing the risk and determining whether to cover it, as well as the terms and conditions of coverage. Both the insured and the insurer must disclose all material information during the formation of the insurance contract. For the insured, this means revealing any known facts about the risk they are seeking to insure. Similarly, the insurer must be forthcoming about the terms and conditions of the policy and any relevant factors that might aﬀect the coverage. The concept of Utmost Good Faith is critical because insurance is based on the probability of potential losses occurring. The complete disclosure of relevant information allows the insurer to accurately assess the risk's quality and calculate an appropriate premium. Let's consider an example to illustrate its signiﬁcance: John takes out a health insurance policy but fails to disclose that he is a smoker. Later, he is diagnosed with cancer and seeks to make a claim. However, the insurance company discovers that John withheld important information about his smoking habit. In this scenario, the insurer may rightfully reject the claim, as John's non-disclosure of a material fact violates the principle of Utmost Good Faith. In summary, the principle of Utmost Good Faith serves as the bedrock of trust and transparency in insurance contracts. It ensures that both parties act in good faith, providing all necessary information to make informed decisions, ultimately upholding the integrity of the insurance relationship. 04 PRINCIPLE OF INDEMNITY The principle of indemnity is a fundamental concept in insurance that aims to restore the insured person to the same ﬁnancial position they were in before the occurrence of a loss. The essence of indemnity is to provide security, protection, and compensation against damage, loss, or injury without granting the insured any proﬁt or advantage due to the loss. This principle is applicable to all types of insurance policies, except for life insurance. When a loss occurs, the insurer pledges to assist the insured in returning to their pre-loss ﬁnancial state. The compensation provided is determined based on the measurable monetary value of the loss suﬀered. The insured is entitled to receive compensation only up to the actual amount of their ﬁnancial loss. Every insurance policy speciﬁes a sum insured, representing the maximum liability of the insurer under the contract. Depending on the type of insurance policy, the sum insured may represent: The value of a car The estimated medical expenses The value of a house The amount needed to meet a family's ﬁnancial needs in case of the breadwinner's death. Let's consider an example to illustrate the principle of indemnity: Jayesh owned a shop, and unfortunately, it caught ﬁre, resulting in the destruction of a portion of the stored goods. His shop was insured for its full value of ₹5,00,000. Jayesh ﬁled a claim for the full insured amount of ₹5,00,000. However, after the insurance company's surveyor examined the damage, the loss was assessed to be only ₹64,000. In accordance with the principle of indemnity, the insurance company paid Jayesh ₹64,000 as compensation, which is the actual loss he suﬀered. Despite having a policy of ₹5,00,000, Jayesh was compensated only for the value of the damaged goods. This illustrates that in indemnity, one is compensated for precisely what they have lost—no more and no less. Overall, the principle of indemnity ensures fairness and prevents the insured from beneﬁting from the insurance beyond the extent of their actual ﬁnancial loss. It is a fundamental aspect of insurance contracts, upholding the essence of providing genuine protection and ﬁnancial restitution in times of adversity. SUBROGATION Subrogation is a vital principle in insurance that grants the insurer the legal right to pursue a third party who is responsible for causing a loss to its insured. When you ﬁle an insurance claim, and another party is at fault for the loss, the insurer typically follows these steps: 1. The insurer pays the claim to indemnify you, covering your damages and injuries 2. The insurer seeks to recover the money they paid, or a portion of it, from the parties at fault for the accident The principle of subrogation comes into play when the insured is compensated for losses due to damage to their insured property. Upon receiving compensation from the insurer, the ownership rights of the damaged property shift to the insurer. Subrogation rights only arise after the insurer has provided payment for the loss. It ensures that the insured cannot seek reimbursement for the same loss from any other party, preventing the insured from being compensated twice for the same loss. Let's illustrate it with an example: Rajan sends his household goods worth ₹1,00,000 from Kolkata to Mumbai through Jayant Transports. During transit, a part of the goods is damaged due to the truck driver's negligence. The insurer assesses the loss and determines it to be ₹30,000, which they pay to Rajan as indemnity. However, Rajan also takes the matter to court and the court orders Jayant Transports to pay ₹30,000 to Rajan. Since Rajan has already received ₹30,000 from the insurer, receiving the same amount from the transporter would result in him proﬁting from the loss. In this situation, the following observations should be noted: The insurance company must compensate Rajan as per the insurance contract promptly, without making him wait for the court's judgment. Rajan should not receive two compensations and gain from the loss. In such cases, the insured's right to claim from any other source is transferred to the insurer when the claim is paid. This transfer of the insured's right to the insurer is referred to as "subrogation" in insurance terminology. In other words, upon payment of the claim, the insured's right to claim from elsewhere becomes "subrogated" to the insurer. In conclusion, subrogation allows insurers to seek reimbursement from at-fault parties, ensuring fairness and preventing the insured from beneﬁting twice for the same loss. It is an essential aspect of insurance contracts that protects the insurer's interests and maintains the integri- ty of the insurance system. CONTRIBUTION Contribution is a fundamental principle in insurance that comes into play when a property is insured with more than one insurance company. The principle ensures that the insured cannot claim a total loss from all insurance companies combined, nor can they claim the same loss from multiple insurers. If one insurer provides full compensation for the loss, they have the right to claim a proportionate share of the claim from the other insurers involved. The objective is to prevent the insured from being in a better position than before the loss occurred and to ensure that the total loss suﬀered by the insured is shared among the diﬀerent insurers in proportion to the value of the policies issued by each of them. Let's consider an example to illustrate the principle of contribution: Kishore owns a car worth ₹5,00,000 and he obtains full insurance 05 coverage for this car from two diﬀerent insurance companies. Unfortunately, the car is completely damaged in an accident, resulting in a total loss of ₹5,00,000. Kishore ﬁles a claim with the ﬁrst insurance company and receives a payment of ₹5,00,000. However, when he approaches the second insurance company and makes a claim for ₹5,00,000, they inform Kishore that he is not eligible for any further compensation because he has already been indemniﬁed by the ﬁrst company. Allowing Kishore to receive payments from both companies would lead to him proﬁting from the loss, which contradicts the principle of indemnity. According to the principle of contribution, the ﬁrst insurance company has the right to recover a proportionate share of the claim from the second insurer, as both insurers are liable for the same loss. This ensures that the total loss suﬀered by Kishore is fairly shared among the insurance companies involved, and Kishore is not placed in a better ﬁnancial position than before the accident. In summary, the principle of contribution prevents the insured from receiving duplicate compensation for the same loss and maintains fairness in the insurance process by distributing the liability among the insurers in proportion to the value of their respective policies. It upholds the principle of indemnity and ensures that the insured is adequately compensated for their loss without making a proﬁt from it. PRINCIPLE OF PROXIMATE CAUSE The Principle of Proximate Cause holds that when a loss is caused by multiple factors, the insurer's liability is determined based on the proximate or nearest cause, not the remote or farthest cause. This principle is particularly useful in situations where a loss results from a series of events. It states that in order to establish the insurer's liability for the loss, the primary and most direct cause (the proximate cause) must be considered, rather than the last event that immediately preceded the loss (the remote cause). However, in the case of life insurance, the principle of Proximate Cause does not apply. Regardless of the cause of death, the insurer is obligated to pay the insured amount in a life insurance policy. Under this principle, when determining whether a loss is covered under an insurance policy, a court looks for the predominant cause that sets in motion the chain of events leading to the loss. This may not necessarily be the ﬁnal event immediately preceding the loss. Let's illustrate with an example: Prathamesh had taken an accident insurance policy that covered death resulting from an accident. One day, while walking on the road, he was hit by a car. He was rushed to the hospital, but being a person with a weak heart, he couldn't withstand the shock and died a few hours later from heart failure. The insurance company contested the claim, arguing that the cause of death was the heart attack and not the accident. In this case, the court ruled that even though the immediate cause of death may have been a heart attack, the proximate cause of death was the accident itself. The accident set in motion a chain of events that ultimately led to Prathamesh's death. Consequently, the court ordered the insurance company to pay the claim, as the accident was the proximate cause of the loss. In conclusion, the Principle of Proximate Cause is essential in determining an insurer's liability when a loss is caused by multiple factors. It ensures that the most signiﬁcant and direct cause is taken into consideration, providing clarity and fairness in assessing claims. However, in life insurance, the insurer is liable to pay the sum insured regardless of the cause of death. PRINCIPLE OF LOSS MINIMISATION The Principle of Loss Minimisation imposes a responsibility on the insured to take all reasonable and necessary measures to minimise the extent of loss to their insured property in the event of sudden and unexpected events like ﬁre, among others. When faced with such circumstances, the insured is obligated to control and reduce the damages and make eﬀorts to save whatever is salvageable. This principle encourages the insured to act prudently and responsibly, just as any sensible person would in similar circumstances. By adhering to the Principle of Loss Minimisation, the insured demonstrates due diligence in protecting their insured property. If the insured fails to take reasonable steps to minimise the loss and behaves negligently or irresponsibly, the insurer may be able to avoid payment for the losses that could have been reduced or avoided with appropriate actions. It is important to note that while the insured is expected to make every eﬀort to protect their insured property, they are not required to do so at the risk of their life. Safety and personal well-being take precedence over property protection. Let's consider an example to illustrate the principle: John's house catches ﬁre due to an electrical short-circuit. In this unfortunate situation, John must make every eﬀort to contain the ﬁre and prevent it from spreading further. This includes promptly calling the nearest ﬁre depart- ment, seeking help from neighbours with emergency ﬁre extinguishers, and taking any other reasonable actions to control the ﬁre. It would be wrong for John to remain passive and merely watch his house burn, assuming that he is protected because he has insurance. In summary, the Principle of Loss Minimisation places a responsibility on the insured to act responsibly and diligently during sudden and unforeseen events. It ensures that the insured takes appropriate steps to mitigate damages and safeguard their insured property, thereby helping to minimise the overall losses and contributing to the eﬀectiveness of insurance contracts. 06 CHAPTER 4 TYPES OF INSURANCE PRODUCTS Motor Insurance Personal Accident Insurance Bharat Griha Raksha Crop Insurance Health Insurance Chomp Home Shield Insurance Marine Insurance Koti Suraksha Health Insurance Home Insurance Travel Insurance Cyber Insurance MOTOR INSURANCE Travelling by vehicle is an unavoidable routine for most of us nowadays. While vehicles are indispensable for commuting, they also expose us to various risks - both physical and ﬁnancial. Therefore, it is essential to have security measures in place to safeguard against potential issues such as vehicle damage, loss, and third-party liability. Motor insurance provides the necessary ﬁnancial protection and coverage in the event of such incidents. In critical situations, vehicle owners may face signiﬁcant ﬁnancial liabilities if they do not exercise proper caution. So, how can vehicle owners protect themselves against these potential risks associated with their vehicles? The answer lies in motor insurance, which encompasses insurance covers for losses or damages caused to the vehicle or its parts due to natural disasters or man-made calamities. This insurance also oﬀers accident cover for individual vehicle owners while driving, as well as for passengers and third-party legal liability. Notably, driving a motor vehicle without insurance in public places is a punishable oﬀense according to the Motor Vehicles Act, 1988. Being safe is always wiser than being sorry. Accidents can happen unexpectedly, and their consequences can have a signiﬁcant impact on your ﬁnances. To ensure peace of mind and to obtain the right coverage, it is advisable to opt for either third party or comprehensive insurance that aligns with your speciﬁc requirements. Motor insurance provides ﬁnancial protection in the following areas: Damage to your own car Injuries or death of the insured resulting from an accident Damage to someone else's car or property Injury or death of a third party (pedestrians/cyclists, etc.) Liability only policies are legally mandatory for all vehicles registered with the RTO and operating on public roads. This policy provides coverage for bodily injury and/or property damage, paying for the ﬁnancial responsibilities you bear after an accident. Liability coverage takes care of costs related to injuries sustained by another driver or passenger, as well as damages to other vehicles or property caused by the accident. However, it does not provide coverage for your own vehicle. Opting for this type of coverage is common for owners of low-value vehicles, as it shields them from potential ﬁnancial burdens arising from damage their car may cause to more valuable vehicles or other properties belonging to someone else. On the other hand, comprehensive policies oﬀer maximum peace of mind to vehicle owners. They cover the repair or replacement of your vehicle due to accidental damage, theft, ﬁre, malicious damage, and weather-related damage. This policy also includes coverage for repairing or replacing other vehicles damaged in an accident involving your vehicle, as well as property damage. Furthermore, injuries or death resulting from an accident, both for the insured and third parties, are covered under this policy. Several crucial factors are considered when insuring motor vehicles: Type of vehicles: Vehicles are broadly categorised for motor insurance under private cars, two wheelers, passenger carrying commercial vehicles, goods carrying commercial vehicles, and other miscellaneous types like ambulances and cranes Insured Declared Value (IDV): This represents the value for which the vehicle is insured and indicates the maximum liability of the insurance company in the event of a total loss Cubic capacity: This refers to the engine's power, with higher CC leading to higher premiums Make and model of the vehicle Year of manufacture: The age of the vehicle impacts the premium, with older vehicles generally incurring higher premiums Geographical zone of vehicle registration/use DID YOU KNOW? The concept of 'Umbrella Insurance' or 'Umbrella Coverage' oﬀers protection beyond the liability limits of existing policies, such as property and motor insurance. in situations where an insured becomes liable to someone, the primary insurance policies cover expenses up to their respective limits. Any additional amount beyond these limits is then covered by the Umbrella policy, providing an extra layer of security against unforeseen risks - much like an umbrella shield from unexpected downpours. 07 However, there are certain scenarios and types of losses that are typically not covered by insurance policies. These exclusions are as follows: Consequential loss: This refers to indirect losses resulting from an accident, which are not covered by the policy. Depreciation: Over time, the value of a vehicle gradually declines. In the event of a loss, the insurance company deducts a reasonable amount towards depreciation to ensure that the insured is restored to the same ﬁnancial position as before the loss, in accordance with the principle of indemnity. Wear and tear: Normal wear and tear of vehicle parts due to regular usage is not covered by the insurance policy. Mechanical or electrical breakdown: Damages arising from mechanical or electrical failures of the vehicle or its parts, not caused by accidents, are typically excluded from coverage. Loss under the inﬂuence of liquor or drugs: Any loss suﬀered while driving under the inﬂuence of intoxicating liquor or drugs is not covered by the insurance policy, as it is illegal to do so. Unlicensed driver: If a vehicle is driven by a person without a valid license, any resulting loss will not be covered by the insurance policy. Unauthorised usage: If a vehicle is used beyond the permitted usage speciﬁed during registration (e.g., using a private car as a taxi), any loss or damage suﬀered will not be covered. Compulsory excess: Each motor policy comes with a compulsory excess amount. Loss or damage up to this excess amount is not covered. If the loss amount exceeds the compulsory excess, the insurance company will pay the remaining sum after deducting the excess. This provision encourages insured individuals to take reasonable care of their vehicles and discourages claiming for minor damages. Geographical area: Standard policies specify a particular geographical area for coverage, typically restricted to India. Accidents occurring outside this speciﬁed area are not covered by the policy. It's crucial for policyholders to be aware of these exclusions to have a clear understanding of their insurance coverage & potential limitations. DID YOU KNOW? To combat car insurance fraud and provide customers with a convenient way to verify the authenticity of their motor insurance policy, the IRDAI (Insurance Regulatory and Development Authority of India) has made it mandatory for all motor insurance policies to include a QR Code. Additionally, insurance companies are required to have an app equipped with a QR Code reader. By scanning the policy document using the app, policyholders can access real-time information about their policy. WHAT IS NO CLAIM BONUS (NCB)? No Claim Bonus (NCB) is a premium discount oﬀered by insurance companies to vehicle owners who have not ﬁled any claims during the duration of their motor insurance policy. If a claim is made during the policy period, the policyholder will not receive the NCB beneﬁt during the next year's policy renewal. The NCB percentage typically starts at 20% and can increase up to 50% based on the claim-free period. HEALTH INSURANCE You might be young, incredibly ﬁt, and rarely falling ill beyond a cold, making you wonder if health insurance is worth the investment. After all, the odds seem to favour good health, right? While we certainly hope that remains true, the reality is that every day, even perfectly healthy individuals face unexpected accidents, injuries, illnesses, and the need for medical procedures. Consider this: Even a minor car accident could lead to substantial medical bills that could disrupt your ﬁnances. And if you were to encounter a major illness or require surgery, the costs involved could potentially wipe out your family's savings. Health Insurance may seem like an added expense, but not having it could prove to be far more costly in the long run. Health Insurance is a means to pay for healthcare and related expenses, safeguarding you from bearing the entire burden of medical services when you are sick or injured. Similar to car insurance or home insurance, you select a plan and agree to pay a premium. In return, your health insurer commits to covering a portion of your eligible medical costs. The underlying idea behind health insurance is straightforward: Medical care can be exorbitant, and most individuals cannot aﬀord to pay for it entirely from their own pockets. However, by pooling together in a group, each person contributes a ﬁxed amount (whether they require medical care now or not), which spreads the risk across the entire group. This shared responsibility ensures that each person is protected from bearing the brunt of high healthcare costs individually. Health insurance policies typically cover expenses related to hospitalisation resulting from accidents or sickness. Traditionally, coverage required a 24-hour hospital stay. However, with medical advancements, there are now "Day Care" procedures, such as cataract surgery, where hospitalisation is not necessary. These procedures are also covered by the policy. The costs covered under a health insurance policy include: Hospital room and operation theatre expenses Fees for medical services, such as surgeons, anaesthesiologists, physicians, specialists, and nurses Costs for medicines, blood, oxygen, surgical appliances, diagnostic materials, X-rays, etc. Pre and post hospitalisation charges, covering expenses incurred on diagnostics, medicines, and doctor consultations before and after hospitalisation, up to a speciﬁed number of days and the sum insured. 08 Types of Health Insurance: Individual health insurance typically provides coverage for an individual or a family, oﬀering a speciﬁc sum insured for each person. In this case, the insurance company's liability would be if all members of the family make claims during the same policy period. A family ﬂoater policy is designed to protect an entire family under a ﬁxed sum insured. All family members are collectively covered under a single sum insured, and the term "ﬂoater" implies that the sum insured is shared among all members. In the example mentioned above, if John chooses a family ﬂoater cover, the sum insured of ₹4,00,000 will be available for all family members. Each family member can claim up to ₹4,00,000 individually, but the total claims made by all family members cannot exceed ₹4,00,000 during the same policy period. Group health policy is a type of insurance taken by a group administrator on behalf of a speciﬁc group of people. Typically, employers opt for these policies to provide health coverage as part of employment beneﬁts for all their employees. Terminology associated with Health Insurance: Sum Insured (SI): The sum insured refers to the amount of coverage provided by the insurance policy. It can be oﬀered on an individual basis, covering a speciﬁc sum for each individual, or on a ﬂoater basis, covering the entire family as a whole under a single sum insured. Cumulative Bonus (CB): Cumulative Bonus is a beneﬁt that entails an increase in the sum insured by a speciﬁed percentage for every claim-free year. This increase is subject to a maximum limit and does not require the payment of any additional premium. Cashless Facility: Cashless hospitalisation is a convenient facility oﬀered by the insurance company. Under this, the insured individual can be admitted to a hospital and receive the necessary medical treatment without having to make direct payments for the medical expenses. The eligible medical costs incurred are settled directly by the insurance company with the hospital. Inpatient: An insured individual who undergoes medical treatment after being admitted to the hospital is referred to as an inpatient. Tax Beneﬁts for Health Insurance: Health insurance oﬀers attractive tax beneﬁts as an added incentive under Section 80D of the Income Tax Act. Individuals can avail an annual deduction of ₹25,000 from their taxable income for the payment of health insurance premium covering themselves, their spouse, and dependent children. For senior citizens, the deduction limit is higher at ₹50,000. However, there are certain exclusions under a health insurance policy, which are not covered by the insurance provider: 30-day Waiting Period: Claims for hospitalisation within the ﬁrst 30 days of policy issuance are not payable, except in the case of accidental injuries. 2-year Exclusions: Certain named diseases like tonsils, sinus, internal tumours, etc., are not covered within the ﬁrst 2 years of the policy. Pre-existing Diseases: Hospitalisation expenses for conditions existing prior to the purchase of health insurance are not covered. Treatment for HIV or AIDS. Dental Treatment: Dental treatment expenses are not covered unless they require hospitalisation. Plastic Surgery or Cosmetic Surgery: Unless necessary for the treatment of burns, cancer, or accident, such surgeries are not covered. Conditions Not Requiring Hospitalisation: Hospitalisation expenses for conditions that do not necessitate hospitalisation are not covered. Hospitalisation for Diagnostic Purposes: Hospitalisation primarily for diagnostic purposes and not related to any illness is not covered. Vaccination and Immunisation Expenses. Naturopathy Treatment. Intentional self-injury or use of intoxicating drugs/alcohol. Please note that tax beneﬁts are subject to changes in tax laws, so it is advisable to stay updated with the latest regulations. Renewal and Grace Period: Health insurance policies are typically annual, with some policies oﬀering coverage for two years as well. Policyholders must renew their policies before they expire to ensure continuous coverage and policy beneﬁts. Insurance companies often provide a 30-day period for policyholders to renew their expired policies, allowing them some time to make the payment and continue their coverage. However, coverage will not be available for the period for which no premium is received by the insurance company. If the premium is not paid within the grace period, the policy will lapse. A "Free Look" period of 15 days is provided to customers from the date they receive the policy. During this time, customers can review the policy's terms and conditions. If they decide not to continue with the policy, the insurance company will refund the premium in full. This ensures that customers are not bound by the policy if it doesn't meet their expectations and provides an opportunity for them to review the policy without losing any money. "Portability" in health insurance refers to the ability to transfer a policy from one insurance company to another without losing the accumulated beneﬁts and continuity beneﬁts. With time, the coverage under a health insurance policy may increase, and waiting periods for certain conditions may be completed or reduced, providing full coverage to the insured. Earlier, switching insurers resulted in losing these continuity beneﬁts, but as per IRDAI regulations, policyholders can now port their policy to another insurer of their choice while retaining full continuity beneﬁts. 09 The COVID-19 pandemic highlighted the importance of insurance, prompting insurance companies to study customer needs and create products that oﬀer comprehensive coverage. HDFC ERGO launched an innovative product that caters to various customer needs, making a signiﬁcant impact in the Indian market. Introducing my: Optima Secure health insurance, a ground breaking policy that redeﬁnes the value you receive from health insurance. With a remarkable 4X coverage* at no extra cost, this plan goes above and beyond to provide you with extensive beneﬁts. But that's not all; the advantages don't stop there. With my: Optima Secure, you'll enjoy a range of beneﬁts, including: No Room Rent Capping Unlimited Day-Care Procedures Wider Pre and Post Hospitalisation Exciting Discount Options KEY BENEFITS: Buy one, get one complimentary. Continuous optimal coverage, even after sum insured exhaustion. Cover increases on renewals, despite claims. Zero out-of-pocket expenses. THE ULTIMATE COVERS: Secure Benefit: The Secure Beneﬁt oﬀers an additional coverage amount equal to 100% of the base sum insured. For instance, if Mr. Sharma opts for a ₹10 lakh base sum insured with the Optima Secure Health Insurance Plan, it instantly doubles to ₹20 lakhs, providing him ample coverage for multiple admissible claims in the policy year. Plus Benefit: With the Plus Beneﬁt, the base cover automatically increases by 50% after 1 year and 100% after 2 years, irrespective of any claims made. Mr. Sharma's renewed Optima Secure Health Insurance Plan sees his base cover of ₹10 lakhs grow to ₹15 lakhs in the ﬁrst year and ₹20 lakhs in the second year. The combination of Plus Beneﬁt and Secure Beneﬁt provides him with a total coverage of ₹30 lakhs. Automatic Restore Benefit: The Automatic Restore Beneﬁt ensures that 100% of the base sum insured is automatically restored upon partial or complete utilisation of the sum insured (base sum insured, secure beneﬁt, and plus beneﬁt). For example, if Mr. Sharma claims ₹10 lakhs from the base cover during the policy year, his base coverage gets restored instantly for any subsequent claims that may arise in the remainder of the policy year. Protect Benefit: As an inbuilt feature, the Protect Beneﬁt covers non-medical expenses and other consumables during hospitalisation. This includes items like gloves, food charges, baby food, nebuliser kit, steam inhaler, oxygen cylinder, thermometer, cervical collar, mineral water, laundry charges, and more. With Optima Secure plan, Mr. Sharma is assured that any listed non-medical expense will be taken care of, and his claims shall be paid till the last penny. The Secure beneﬁt, Plus Beneﬁt & Automatic Restore beneﬁt work in tandem along with the base Sum Insured to provide Mr. Sharma 4x coverage post 2 Policy Years. OTHER COVERAGE: WHAT IS EXCLUDED? Hospitalisation (Including COVID-19) Adventure Sport Injuries Pre-Hospitalisation (60 days) Breach of Law All Day Care Treatments War Post Hospitalisation (180 days) Excluded Providers Preventive Health Check-Up at No Cost Congenital External Diseases, Defects or Anomalies Emergency Air Ambulance (up to ₹5 Lac) Treatment for Alcoholism & Drug Abuse Road Ambulance E Opinion For 51 Illnesses Daily Hospital Cash (min ₹800/- to max ₹4800/- per hospitalisation) KOTI SURAKSHA HEALTH INSURANCE HDFC ERGO my: health Koti Suraksha Health Insurance is a comprehensive medical insurance plan that provides coverage under two main sections: hospitalisation cover and personal accident cover. Depending on the requirements, one can choose either or both sections for their insurance needs. Section A of the policy offers coverage for various medical expenses such as home healthcare, domiciliary hospitalisation expenses, pre-hospitalisation and post- hospitalisation expenses, road ambulance expenses, and organ donor expenses, among others. Section B provides coverage for accidental events, including accidental death, permanent disability, broken bones, temporary total disability, and chauffeur benefit, among others. The policy also offers the flexibility to enhance coverage by including optional add-on covers. These add-on covers vary for Section A and Section B and may include options like sum insured rebound, waiver of co-payment, cumulative bonus-booster, last rites, and medical evacuation, among others. 10 Premium payment frequency can be chosen from monthly, half-yearly, quarterly, and yearly options, providing financial flexibility. The policy also offers lifetime renewability benefits, allowing one to continue the coverage as long as needed. Additionally, there is a grace period of 30 days for renewal from the due date, providing some leeway to renew the policy without losing coverage. Overall, HDFC ERGO My: Health Koti Suraksha Health Insurance offers a wide range of coverage features and optional add-ons, giving individuals the opportunity to tailor the policy to meet their specific healthcare and financial needs. PERSONAL ACCIDENT POLICY While minor accidents may have temporary effects, major ones can have a severe impact on life and well-being. Personal accident insurance offers financial relief in such situations. It provides financial support to the policyholder if they become disabled after an accident, regardless of its magnitude, even covering minor incidents like a bicycle fall or a sports injury. Group Personal Accident Policy: Provides cover to a defined group of individuals, often used by employers to protect their employees against accidental risks. Key Inclusions: Post-hospitalisation medical expenses incurred in Road ambulance cover 180 days after the hospitalisation. Domiciliary hospitalisation expenses Alternative treatment and organ donor expenses Day care procedures are covered under this plan. Key Exclusions: Injuries or death due to self-injury, suicide, or attempted suicide. Under the influence of intoxicating liquor or drugs. Participation in hazardous sports. War, civil war, and similar situations. DID YOU KNOW? Insurance of movies has been common in Hollywood since the era of silent movies. In Bollywood, Sanjay Dutt's arrest during the shooting of "Khal Nayak" (1993) prompted Subhash Ghai to seriously consider insuring his subsequent movies. Aditya Chopra's "Mohabbatein" (2000) was the first Indian movie to benefit from insurance when Aishwarya Rai got injured during its production. CHOMP With CHOMP, give your teeth the justice they deserve. CHOMP from HDFC ERGO is a first-of-its-kind group dental insurance plan that covers dental treatments like fillings, gum treatments, extractions, root canal treatment, etc. Health insurance policies in market cover dental treatment arising out of accidental injuries and requiring hospitalisation. For all other dental treatments, a customer has to pay from his/her pocket. This product is intended to fill that gap in your health insurance policies. What is covered? Restorative Treatment Cover (Fillings) Major Surgeries Cover (Requires Hospitalisation) Periodontal Treatment Cover (Gum Related Problems) Prosthetic Treatment Cover (Bridges, Partial Denture, Complete Denture) Endodontic Treatment Cover (Root Canal and Crowning) Major Surgeries Cover (Requires Hospitalisation) Minor Surgical Procedures 11 HOME INSURANCE Motor Insuring our homes and possessions provides peace of mind and financial security in case of damage or loss. There are different types of coverage available. Insurance Fire Insurance: Covers financial losses due to damage or loss of a property you own. Contents Insurance: Covers financial losses caused by the loss, theft, or damage of your possessions. Methods of fixing the sum insured: For the building and contents (excluding personal effects), the sum insured should represent the replacement value. For personal belongings, the sum insured should be based on their market value. BHARAT GRIHA RAKSHA Provides insurance cover for Home Buildings and/or Home Contents. The Coverage: Home Building Cover, that covers loss, damage or destruction caused by insured perils covered under Bharat Griha Raksha. Home Contents (Excluding Valuables) that covers articles or things in the home. Optional Covers#: Cover for Valuable Contents on Agreed Value Basis Personal Accident Cover Which unexpected events are covered? We give insurance cover for physical loss or damage, or destruction caused to Insured Property by the following unforeseen events occurring during the Policy Period. The events covered are given in Column A and those not covered in respect of these events are given in Column B. Column A Column B We cover physical loss or damage, or We do not cover any loss or damage, or destruction destruction caused to the Insured Property by caused to the Insured Property Fire caused by burning of Insured Property by order of any Public Authority. Explosion or Implosion - Lightning - Earthquake, volcanic eruption, or other - convulsions of nature Storm, Cyclone, Typhoon,Tempest, Hurricane, - Tornado, Tsunami, Flood and Inundation caused by a. normal cracking, settlement or bedding down of new structures, b. the settlement or movement of made up ground, Subsidence of the land on which Your Home c. coastal or river erosion, Building stands, Landslide, Rockslide d. defective design or workmanship or use of defective materials,or e. demolition, construction, structural alterations or repair of any property, or ground works or excavations. Bush fire, Forest Fire, Jungle Fire - Impact damage of any kind, i.e., damage caused by impact of, or collision caused by any caused by pressure waves caused by aircraft or other aerial external physical object (e.g. vehicle, falling or space devices travelling at sonic or supersonic speeds. trees, aircraft, wall etc.) 12 Which unexpected events are covered? Missile testing operations - caused by a. temporary or permanent dispossession, confiscation, commandeering, Riot, Strikes, Malicious Damages requisition or destruction by order of the government or any lawful authority, or b. temporary or permanent dispossession of Your Home by unlawful occupation by any person. Acts of terrorism (Coverage as per Terrorism Exclusions and Excess as per Terrorism Clause. Clause attached) Bursting or overflowing of water tanks, - apparatus and pipes, Leakage from automatic sprinkler installations. - caused by a. temporary or permanent dispossession, confiscation, commandeering, Subsidence of the land on which Your Home requisition or destruction by order of the government or any lawful authority, or Building stands, Landslide, Rockslide b. temporary or permanent dispossession of Your Home by unlawful occupation by any person. if it is Theft within 7 days from the occurrence of a. any article or thing outside Your Home, or and proximately caused by any of the above b. any article or thing attached from the outside of the outer walls or the roof of Insured Events. Your Home, unless securely mounted. Optional Covers Cover for Valuable Contents: On Agreed Value Basis (under Home Contents Cover): Valuable contents of Your Home such as jewellery, silverware, paintings, works of art etc. can be covered under this optional cover Personal Accident Cover: If the insured peril causing damage to the Home Building and/or Contents also results in the death of either the owner or his / her spouse, HDFC ERGO will paycompensation of `5 Lakh per person In-Built Covers: The policy also pays for the following expenses Cost of repairs Loss of Rent and Rent for alternative accommodation Act of Terrorism Architect’s, Surveyor’s, Consulting engineer’s fees - up to 5% of claim amount Costs of clearing debris - up to 2% of claim amount 13 HOME SHIELD INSURANCE A house is the most expensive asset that is owned by an individual. On an average, most part of your saving is invested in buying and furnishing the house. Not much of attention is paid to protect it against the untoward events. Natural calamities like floods and earthquakes can strike anytime anywhere without notice. In addition, robbery and burglary can also take place when you least expect it. HDFC ERGO Home Shield Insurance is one of the most comprehensive products that covers your assets up to 5 years from virtually all the fortuitous events which could take away your peace of mind. Benefits Option to cover only the building (structure) or contents or both of your home up to 5 yrs on all risk basis Multiple options to choose such as loss of rent, hotel stay, emergency purchases, expenses for shifting to alternate accommodation, etc Covers your home contents such as furniture and fixtures, electronic equipment, ACs, etc. at replacement or indemnity basis Optional coverage for portable equipment, jewellery and valuables, public liability* Building can be valued on the following basis: Reconstruction cost (Reinstatement value) Higher of registered agreement value or ready reckoner value or valuation report certified by government approved valuer (Agreed value) Depreciated cost i.e. reinstatement cost less depreciation (Indemnity basis) Eligibility: An owner occupant of flat / apartment / independent building can purchase this policy for his building and/ or contents, jewellery and valuables, curios, paintings and work of art and portable electronics equipments A tenant and other non-owners can also purchase this policy for contents, jewellery and valuables, curios, paintings and work of art and portable electronics equipments TRAVEL INSURANCE Travelling overseas, whether for business or personal reasons, involves planning, expenses,and some inherent risks. To safeguard against financial losses resulting from various potential events, travel insurance is crucial. It offers coverage for a wide range of situations that can impact your trip, including travel modifications, cancellations, medical expenses, baggage damage or theft, and more. Regardless of whether you travel frequently or occasionally, or even if it's the once-in-a-lifetime trip, travel insurance should be a top priority in all travel arrangements. It is advisable to purchase a travel insurance policy immediately after paying for your trip to ensure coverage for unused travel and accommodation costs in case of trip cancellation due to a covered event, like illness or a natural disaster. Most travel insurers provide policies that cater to families and couples, and some offer multi-trip and annual policies for frequent travellers. International travel insurance policies generally cover overseas medical and dental expenses, lost or stolen luggage, liability, accidental death or disability, and financial losses due to delays, cancellations, or rescheduled arrangements. Some travel insurers may offer additional services, such as 24-hour medical emergency translation, which can significantly enhance the quality of medical treatment while travelling. It's important to note that medical treatment in some countries can be exceedingly expensive, and some hospitals may require guarantee of payment before admitting and providing treatment. Travelling overseas makes you personally liable for covering medical costs, and it's not uncommon for even a short stay in a foreign hospital, like in the US, to incur substantial expenses reaching tens of thousands of dollars. Having travel insurance helps mitigate these potential financial burdens and ensures a more secure and worry-free journey. Travellers who do not have insurance coverage are personally responsible for bearing the medical and associated costs they may incur overseas. 14 Key points about travel insurance: Individuals up to the age of 70 can be covered under The premium amount depends on factors such as age the policy and duration of the trip The premium is payable in Rupees, but the coverage The coverage oﬀered can be either worldwide, excluding is provided in US dollars USA and Canada, or including USA and Canada What is not covered under the travel insurance policy? Intentional self-injury Injury or sickness while under the influence of intoxicating liquor or drugs Injury or sickness while participating in any sport as a professional player Injury sustained while participating in any criminal act, violent labour disturbance, riot, civil commotion, or public disorder Bodily injury sustained while participating in hazardous sports like parachuting, hang gliding, parasailing, skiing, or bungee jumping Medical expenses incurred due to pre-existing diseases Injury due to terrorism Bodily injury or sickness due to war Bodily injury or sickness due to pregnancy Bodily injury or sickness due to HIV/AIDS Having comprehensive travel insurance is essential to protect yourself financially from unexpected events and emergencies while travelling abroad. It ensures peace of mind and helps avoid substantial financial burdens that may arise due to unforeseen situations during the trip. CROP INSURANCE Crop or agriculture insurance is designed to mitigate the risks and offer financial support in case of crop yield losses due to unforeseen events. These insurance programs are implemented through various 'Schemes' or 'Programmes'. The assessment of loss or shortfall in yield for both Rabi and Kharif crops operates on the principles of the 'Area Approach'. The insurance coverage has been made optional for all farmers, including both loanee and non-loanee farmers. To better comprehend crop insurance, let's understand the concepts of Rabi and Kharif Crops: What are Rabi crops? Rabi crops, also known as winter crops, are agricultural crops that are sown during the winter season and harvested in the spring. They are typically sown around mid-November, after the monsoon rains are over, and the harvesting begins in April or May. Rabi crops rely on rainwater that has percolated into the ground or irrigation for growth. Major Rabi crops in India include wheat, barley, mustard, sesame, and peas. Peas are harvested early and are available in Indian markets from January to March. What are Kharif Crops? Kharif crops, also known as monsoon crops or autumn crops, are domesticated plants cultivated and harvested during the Indian subcontinent's monsoon season, which lasts from June to November, varying by crop and region. In India, the Kharif season is popularly considered to start in June and end in October. These crops are sown at the beginning of the first rains during the advent of the south-west monsoon season and harvested at the end of the monsoon season (October-November). The sowing dates for Kharif crops vary across different regions and depend on the onset of the monsoon. In Kerala, the southern state of India, monsoon sowing begins toward the end of May, while in some northern Indian states, it starts in July. In regions like Maharashtra, the west coast of India, and Pakistan, where rains arrive in June, Kharif crops are sown in May, June, and July. Similarly, in Bangladesh, Kharif crops are usually sown with the first rains in June. The success of Kharif crops depends on the quantity and timing of rainwater. Excessive, insufficient, or untimely rainfall can adversely impact the entire year's agricultural efforts. Rice, maize, and cotton are among the major Kharif crops cultivated in India. What are the schemes offered under crop insurance? Pradhan Mantri Fasal Bima Yojna (PMFBY) Restructured Weather Based Crop Insurance Scheme (RWBCIS) Coconut Palm insurance scheme (CPIS) Pilot Unified Package insurance scheme UPIS) 15 At HDFC ERGO, we highly promote the Pradhan Mantri Fasal Bima Yojna (PMFBY) as it has positively impacted the lives of farmers and elevated their social status. PMFBY, launched on 18th February 2016 by Prime Minister Narendra Modi, provides insurance coverage for farmers' crop yields. It replaces two earlier schemes, National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS), combining their best features and eliminating drawbacks. The main goal is to support agricultural production by offering affordable crop insurance that comprehensively covers non-preventable natural risks from pre-sowing to post-harvest stages. The scheme has completed 8 crop seasons and is being implemented across various States/Union Territories (UTs). The Ministry of Agriculture and Farmers Welfare (MoA&FW), Government of India (GoI), has been continuously improving the scheme to make it more effective, transparent, and technologically advanced, minimising manual interventions and standardising execution on the ground through detailed Operational Guidelines (OGs) and cutting-edge technological solutions. Initially, the scheme was compulsory for loanee farmers availing crop loan/KCC account for notified crops, but since 2020, it has been made voluntary with the introduction of reforms. The Ministry of Agriculture and Farmers Welfare oversees the administration of the scheme. Objective of the Scheme Pradhan Mantri Fasal Bima Yojna (PMFBY) aims at supporting sustainable production in the agriculture sector through various means, including: Providing financial support to farmers facing crop loss or damage caused by unforeseen events. Stabilising the income of farmers to ensure their continued participation in farming activities. Encouraging farmers to adopt innovative and modern agricultural practices. Ensuring the creditworthiness of farmers, promoting crop diversification, enhancing the growth and competitiveness of the agriculture sector, and providing protection to farmers from production risks. For FY 22-23, HDFC ERGO is catering the below states: Season State Kharif Rabi 2022-23 Andhra Pradesh Kharif Rabi 2022-23 Assam Kharif Rabi 2022-23 Himachal Pradesh - Rabi 2022-23 Maharashtra Kharif Rabi 2022-23 Odisha Kharif Rabi 2022-23 Rajasthan Kharif Rabi 2022-23 Tamil Nādu - Rabi 2022-23 Tripura Kharif Rabi 2022-23 Uttar Pradesh Kharif Rabi 2022-23 Karnataka Kharif Rabi The policy is offered for all types of crops, including food & oilseeds crops and annual commercial / horticultural crops, if past yield data is available. for perennial crops, coverage can be piloted for those perennial horticultural crops for which a standard methodology for yield estimation is available. This ensures that a wide range of crops can benefit from the insurance coverage provided by the policy. Coverage of risk and exclusions under the scheme The scheme operates on the principle of "area approach" in selected defined areas known as insurance units (IU), based on specific crops and defined areas, as decided by the state level coordination committees on crop insurance of the respective state/UT government. These units are notified as insurance units applicable to villages/village panchayats or any other equivalent unit for major crops. for other crops, the unit may be of a larger size, above the level of village/village panchayat. The scheme covers various stages of the crop and risks that may lead to crop loss. This includes risks from pre-sowing to post-harvest stages. It provides comprehensive risk cover for farmers against all non-preventable natural risks that can affect their crops during these stages. Coverage Description In case of majority of insured crops of a notified area are prevented from sowing/planting due to Preventive Sowing / adverse weather conditions such as deficit rainfall or adverse seasonal conditions, the insured crops Planting Risk that will be eligible for indemnity claims up to maximum of 25% of the sum insured 16 Comprehensive risk insurance is provided to cover yield losses due to non-preventable risks, viz. Standing Crop (Sowing drought, dry spells, flood, inundation, pests and diseases, landslides, natural fire and lightning, storm, to Harvesting) hailstorm, cyclone, typhoon, tempest, hurricane and tornado. Coverage is available only up to a maximum period of two weeks from harvesting for those crops which are allowed to dry in cut and spread condition in the field after harvesting against specific peril of hailstorm, cyclone and cyclonic rains and unseasonal rains. Post-Harvest Losses For the claims arising out of crop damage due to post-harvest losses and localised risks, arising out of cyclone or cyclonic rains / unseasonal rains throughout the country, resulting in damage to harvested crop lying in the field in 'cut and spread' condition for sole purpose for drying only, up to a maximum period of two weeks (14 days) from harvesting is also covered and the assessment of damage will be made on individual farm basis. Loss/damage resulting from occurrence of identified localised risk of hailstorm, landslide, Inundation, cloud burst and nature fire due to lightning affecting isolated farms in the notified area. Localised Calamities Exclusion: Losses arising out of war and nuclear risks, malicious damage and other preventable risks shall be excluded. MARINE INSURANCE Marine insurance can be broadly categorised into two types: 1. Marine Cargo insurance: This type of insurance provides coverage for the loss of or damage to goods during their transit by rail, road, sea, or air. 2. Marine Hull Insurance: This deals with the insurance of ships, including their hull, machinery, and other related components. In Marine cargo insurance, several important factors are considered, such as: The type of cargo being transported, which could be edible items, cement, glass, bulk cargo like wheat, electrical and electronic items, garments, jewellery, petroleum products, etc. The type of packaging used, whether it is cartons, boxes, bags, containers, etc. The mode of transportation used for the journey, whether it is by sea, rail, road, or air. The class of the ocean-going vessel involved in the transportation process. How marine cargo insurance helps: Cargo is vulnerable to a wide range of risks during transportation, such as accidents involving the carrying vehicle and damage caused by jolts or jerks. In international trade, both the consignor (sender) and the consignee (receiver) are responsible for ensuring the safety of the goods. Marine insurance offers protection to both parties, providing financial security in the event of any loss to the cargo. In such cases, the insurer compensates for the equivalent value of the loss, ensuring stability for both the consignor and the consignee. What is covered in a marine cargo policy? In a general all-risk policy, coverage includes protection against loss or damage caused by various factors, except for those specifically listed as exclusions. The exclusions typically encompass: Loss or damage resulting from deliberate misconduct of the insured. Ordinary leakage, normal loss in weight or volume, and regular wear and tear. Loss or damage due to inadequate or unsuitable packaging. Loss or damage caused by inherent defects or characteristics of the subject matter. Loss or damage resulting from delays. Loss or damage due to the insolvency or financial default of vessel owners/operators. Loss or damage due to war, strikes, riots, and civil commotion. Loss or damage resulting from nuclear perils. Loss or damage due to the unseaworthiness of the vessel. Duration of coverage in marine insurance: Marine insurance policies do not provide fixed-period coverage like fire insurance. Instead, they generally cover goods from warehouse to warehouse. The coverage begins when the goods leave the warehouse and ends upon delivery to the destination warehouse. 17 CYBER INSURANCE What is Cyber Crime? GLOBAL S E CURE S HI E LD Cybercrime, according to the National Cyber Crime Reporting Portal, encompasses any unlawful act in which a computer, communication device, or computer network is used to SECURE DATA FOLDER S E CURE P AYM E NT commit or facilitate the commission of a crime. Below is a list of various cybercrimes along with their explanations to help foster a better understanding of these different types of criminal activities: M OBI LE E M AI L VI RUS S E CURI TY THREAT 1. Child pornography / Child sexually abusive material (CSAM): Involves the creation, distribution, or possession of sexually explicit material featuring minors who are sexually exploited or abused. 2. Cyberbullying: Refers to harassment or bullying inflicted through electronic or communication devices, such as computers, mobile phones, or laptops. 3. Cyberstalking: Occurs when a person uses electronic communication to repeatedly follow, contact, or monitor an individual despite clear indications of disinterest, leading to harassment. 4. Cyber grooming: Involves building an online relationship with a young person with the intent to deceive or pressurise them to engage in sexual activities. 5. Online job fraud: Aims to defraud people seeking employment by providing false promises of better jobs with higher wages. 6. Online sextortion: The act of threatening to distribute private and sensitive material through electronic means unless the victim provides sexual images, favours, or money. 7. Vishing: A fraudulent attempt to obtain personal information, such as Customer ID, Net Banking password, ATM PIN, OTP, etc., through phone calls. 8. Sexting: Sending sexually explicit digital images, videos, text messages, or emails, typically via cell phones. 9. Smishing: A type of fraud that uses text messages on mobile phones to trick victims into calling fraudulent phone numbers, visiting fake websites, or downloading malicious content. 10. SIM swap scam: Involves fraudsters fraudulently obtaining a new SIM card for a registered mobile number to gain access to OTPs and alerts for financial transactions from the victim's bank account. 11. Debit / Credit card fraud: Unauthorised use of someone else's credit or debit card information for making purchases or withdrawing funds. 12. Impersonation and identity theft: Fraudulently using electronic signatures, passwords, or other unique identification features of someone else to commit deceitful acts. 13. Phishing: A type of fraud where attackers steal personal information, such as customer ID, credit/debit card details, etc., through deceptive emails that appear legitimate. 14. Spamming: Sending unsolicited commercial messages via email, SMS, MMS, or similar electronic media to persuade recipients to make purchases or divulge sensitive information. 15. Ransomware: A type of computer malware that encrypts files and holds them hostage until a ransom is paid to decrypt the data. 16. Viruses, worms & Trojans: Malicious programs designed to damage or alter computer files, replicate themselves, or grant unauthorised access to confidential information. 17. Data breach: Unauthorised access to information without proper authorisation. 18. Denial of services / distributed DoS: A DoS attack aims to deny access to a computer resource without permission, while a DDoS attack overwhelms online services by flooding them with traffic from multiple sources. 19. Website defacement: An attack that alters the appearance of a website or makes it dysfunctional, often with the posting of indecent, hostile, or obscene content. 20. Cyber-squatting: Registering, trafficking in, or using a domain name with the intent of profiting from the goodwill of a trademark belonging to someone else. 21. Pharming: Redirecting website traffic to a fraudulent website, aiming to steal sensitive information. 22. Crypto jacking: Unauthorised use of computing resources to mine crypto currencies. 23. Online drug trafficking: Illegally selling, transporting, or importing controlled substances, such as heroin, cocaine, or marijuana, using electronic means. 24. Espionage: The act of obtaining data and information without permission or knowledge of the owner, often for illicit purposes. It is crucial for individuals and organisations to be aware of these cybercrimes and take appropriate measures to protect themselves and their data from potential threats. Why do we need cyber insurance? We currently reside in a digital age where the internet has become an indispensable part of our daily lives. The COVID-19 pandemic has further accelerated our reliance on digital platforms for various activities. From sharing updates on social media to conducting financial transactions, everything is just a click away. However, this increased digital presence has also attracted online fraud, identity theft, phishing, and other cybercrimes that have been on the rise consistently over the years. The spread of COVID-19 has witnessed a significant surge in such cases. 18 In response to the growing cyber threats, insurance companies have introduced cyber insurance policies to safeguard individuals and organisations from potential financial and identity-related risks. These policies not only provide coverage against monetary losses resulting from malware or phishing attacks but also offer protection for legal defence costs incurred during legal proceedings. The aim is to ensure the safety and security of individuals and businesses against cyber frauds and their consequences. DID YOU KNOW? In today's rapidly evolving digital landscape, the cyber insurance industry plays a critical role in providing protection against the ever-changing risks posed by cyber threats. One of the most significant game-changers in recent times has been ransomware attacks. Hackers employ malware to gain control over victims' computers and demand payment to restore access to their systems. Ransomware incidents have surged, accounting for nearly 25% of all cyber incidents globally in 2020. A comprehensive cyber insurance policy is designed to mitigate the financial and reputational impact of cyberattacks. It typically covers legal fees and expenses incurred during legal proceedings. However, it goes beyond that and extends its protection to various other aspects: Restoring Personal Identities: In case of identity theft or cybercrimes that affect customers personally, the policy helps in the recovery process and restoration of their identities. Recovering Compromised Data: Data breaches are a common cyber threat, and cyber insurance assists in the recovery of compromised data, minimising the damage caused by such incidents. Repairing Damaged Computer Systems: Cyberattacks can result in damage to computer systems and networks. The insurance policy provides support for repairing and restoring these systems to normal functioning. In response to the changing cyber risk landscape and various types of cybercrimes, HDFC ERGO offers comprehensive protection through their cyber insurance product, called "Cyber Sachet Insurance." This plan is designed to address the specific needs and concerns of individuals and businesses in the face of cyber threats. The premium for this policy starts at less than `2/- per day, making it an accessible and cost-effective solution to safeguard against cyber risks. Key features of Cyber Sachet Theft of Funds Coverage: Provides protection against financial losses resulting from online frauds. Zero Deductibles: No upfront payment is required for covered claims, ensuring hassle-free coverage. Covered Devices: The policy extends coverage to multiple devices, safeguarding all your digital assets. Affordable Premium: The plan starts at a budget-friendly premium of just `2 per day*. Identity Theft Coverage: Offers coverage for financial losses arising from the misuse of personal information on the internet. Policy Period: The insurance policy is valid for a period of 1 year. Flexible Sum Insured: Choose from a range of sum insured options, from ₹10,000 to ₹5 crores, to match your coverage needs. What we cover? 1. Theft of Funds - Unauthorised digital transactions 9. Network Security Liability 2. Identity Theft 10. Privacy Breach and Data Breach Liability 3. Data Restoration/ Malware Decontamination 11. Privacy Breach by a Third Party 4. Replacement of Hardware 12. Smart Home Cover 5. Cyber Bullying, Cyber Stalking and Loss of Reputation 13. Liability Arising Due to Underage Dependent Children 6. Online Shopping 14. Theft of Funds - Unauthorised Physical Transactions 7. Online Sales 15. Cyber Extortion 8. Social Media and Media Liability What is not covered? 1. Coverage to Workplace 2. Coverage for Investment Activities 3. Protection from Legal Suits from a Family Member 4. Cost of Upgrading Devices 5. Losses Incurred in Crypto-Currency 6. Use of Restricted Websites 7. Gambling 19 CHAPTER 5 MAKING OF AN INSURANCE POLICY Insurance policies are structured into several sections, each serving a speciﬁc purpose. Understanding the construction of the policy is crucial for both the insured and the insurer. The major sections of an insurance policy are as follows: Heading: This section identiﬁes the class of the policy and is displayed at the top of the ﬁrst page. It clariﬁes the type of policy being issued, such as ﬁre policy, burglary policy, motor policy, marine policy, etc. Preamble: The preamble clause states that the insured has paid the premium and signed the proposal form, which forms the basis of the insurance contract. Operative Clause: This section details the type of event that is insured. It contains the promise of the insurance company to compensate for any loss or damage suﬀered due to the occurrence of the perils insured under the policy. The detailed list of covered perils ensures clarity between both parties regarding the coverage oﬀered. Exclusions: The exclusions section provides details of speciﬁc items or events that are not covered under the insurance contract. This is crucial to clarify what may not be covered to avoid any disputes in the future. Definitions: In the deﬁnitions section, the meaning of various terminologies used in the insurance policy is explained. This helps bring clarity to the understanding of various terms, as their general meaning may diﬀer from their speciﬁc application in the context of insurance. General Conditions: This section captures the standard conditions applicable to the insurance contract. It speciﬁes the rights and duties of both the insured and the insurer. Additionally, the treatment of certain speciﬁc circumstances is also detailed to avoid any disputes. Schedule: The schedule captures speciﬁc details of the insured and the property insured. It includes information such as the insured's name, address, sum insured, details of items covered, period of insurance, etc. Grievance Redressal Procedure: This section outlines the procedure to be followed in case the customer is dissatisﬁed with the services of the insurance company in any manner. It provides details of the various authorities who can be contacted for the fair resolution of grievances. 20 CHAPTER 6 INSURANCE LANDSCAPE IN INDIA The insurance sector in India plays a crucial role in driving economic development through its diverse range of services. These services encompass mobilising savings, facilitating ﬁnancial intermediation, encouraging investments, stabilising ﬁnancial markets, and managing both social and ﬁnancial risks. Recognising the immense potential of the insurance industry in channelling savings for productive purposes and providing social safety nets, the government has taken various measures to enhance its quality, accessibility, and popularity. Prior to the year 2000, the insurance market in India was dominated by just ﬁve state-owned companies. However, with the enactment of the Insurance Regulatory and Development Authority of India (IRDAI) Act, the sector was opened up to the private sector. As a result, IRDAI now oversees 24 life insurance and 33 non-life insurance companies. Post-liberalisation, the insurance industry in India has experienced signiﬁcant growth. Notably, the non-life insurance segment witnessed a remarkable 20.5% increase in gross direct premiums, amounting to a total gross direct premium income (GDPI) of `256,912.14 crores, approximately $31 billion, in the ﬁscal year 2023. DID YOU KNOW? Interesting historical facts reveal that insurance has deep roots in India's past. Ancient Indian texts such as Manu's 'Manu smriti,' Yagnavalkya's 'Dharma sastra,' and 'Artha shastra' by Chanakya have preserved evidence of early insurance practices. These writings document the concept of pooling resources to be redistributed during times of calamities like ﬁres, ﬂoods, epidemics, and famines. GROWING NUMBERS India's GDP has experienced remarkable growth, rising from $485.44 billion in 2001 to $3.18 trillion in 2022 with a compound annual growth rate (CAGR) of 9.4%. The insurance industry has played a signiﬁcant role in contributing to this GDP growth, as industry premiums surged from `98 billion in 2001 to `2,208 billion in 2022, recording a CAGR of 16%. Despite this growth, India's insurance penetration stands at only 1.0%, considerably lower than the global general insurance industry's penetration rate of 3.9%. In terms of insurance density, India's overall density was $69 for life insurance and $22 for non-life insurance in FY22. During FY23, the non-life insurance industry witnessed a growth rate of 16.4%, surpassing the growth of 11.1% observed in the previous year. The performance of general insurers in March 2023 showed a growth of 9.7%, compared to 13.8% in March 2022. The growth in FY23 has been primarily driven by the group health and motor insurance segments, which exhibited a growth rate of 2.0 times higher than the previous year. Non-life insurers' gross direct premium also witnessed substantial growth, increased by 20.5% in April and, reached to `25,640.66 crore as compared to `21,277.67 crore in the same period in the previous year, as reported by the General Insurance Council. Over the last two decades, the insurance industry in India has experienced impressive growth, primarily due to increased private sector participation, improved distribution capabilities, and enhanced operational eﬃciencies. Private players have seen signiﬁcant growth in individual single premium, group single premium, and individual non-single premium. Private Life Insurers are expected to continue growing their retail annual premium equivalent (APE) at a CAGR of over 17% between 2021 and 23, with new retail term premiums are expected to double within ﬁve years. The private non-life insurance segment is also forecasted to grow at 14% in FY23. The health insurance portfolio has particularly shown exceptional growth, generating over `90,667 crore, with a 23.19% growth rate, while the motor insurance portfolio generated a premium of `81,291 crore, marking a growth of 15% in FY 2022-23. Health insurance now constitutes over 35% of the total non-life premium in FY 2022-23. This impressive growth has been driven by product innovation, vibrant distribution channels, and targeted publicity and promotional campaigns by insurers. THE ROAD AHEAD India has emerged as one of the leading global economies with exponential GDP growth. To continue this upward trajectory and 21 improve our ranking among the world's largest economies, the insurance industry can play a crucial role by contributing signiﬁcantly to economic growth and adding resilience to various segments of the Indian economy through increased risk coverage. A signiﬁcant milestone awaits India in the year 2047, as it celebrates 100 years of Independence. In line with this historic occasion, the Insurance Regulatory and Development Authority of India (IRDAI) has set an ambitious vision for 2047, called "Insurance For All," aiming to raise awareness and enhance insurance penetration throughout the country. To realise this vision, IRDAI has introduced the state insurance plan, where each insurer takes on the role of a leader insurer for an assigned state and collaborates with other players to drive the overall initiative. In Tamil Nadu and Puducherry, Kotak Life Insurance Co. Ltd. and HDFC ERGO have been designated as lead insurers. Currently, insurance penetration in Tamil Nadu stands at 3.3%, Puducherry at 2.7%, and the national average at 4.2%. In Tamil

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