Unit – III

Motor insurance

Motor insurance policy is a must for every car owner. Hence, it is important to understand
these features in order to extract maximum benefits. You can now get your car repaired at one of the
listed garages without paying cash. The repair bill will be taken care of by the insurance company. The
facility is referred to as cashless claim.

Owning a car has been a dream for many. In fact, most of us have nurtured this dream since
childhood. Getting it insured will protect this investment.Motor insurance policy, also known as auto
insurance or car insurance is usually bought for cars. The major benefit of having one is that it ensures
higher level of protection against losses incurred due to road accidents. It also protects us against
complications arising from third party liability

A motor insurance policy is categorized into two types:

 Comprehensive car insurance

 Third Party car insurance

1. Comprehensive Car Insurance

The comprehensive plan will cover you and your vehicle against number of risks arising out of
destruction done to the vehicle due to an accident, theft etc. It also covers death of driver and/or
passengers inside the vehicle in the event of an accident. The plan offers cover against damage caused
by the car to the third party or his/her property.

Features of Comprehensive Car Insurance

A standard comprehensive car insurance plan insures your car against the following listed below:

Natural Calamities

It covers against listed damage and destruction done to the car due to floods, earthquakes,
typhoons etc.

Man-made Calamities

It covers damage and destruction caused to the vehicle due to theft, burglary, strikes, riots, etc.

Personal Accident Cover

The cover offers protection for the owner/driver of the car and co-passengers while travelling.
The cover is also valid for damage and destruction caused during mounting or dismounting from the car.

2. Third Party Insurance Cover

This plan will protect insurance buyer against damage or destruction done by your vehicle to
another vehicle or property. You will not be covered for theft, burglary, accidents, or any other damage
to the car.
Features of Third Party Insurance

The third party liability cover will protect you against any legal liability caused due to
unintentional damages including:
Permanent injury of the individual

 Death of the individual

 Damage caused to the property of the individual
Damage caused while driving the insured vehicle on road
 Both Comprehensive and Third Party car insurance plans are valid for about 12 months. One
needs to renew the plan each year to avail of the benefits offered by the insurance company.

Premium Features of Motor Insurance Policy

The premium of car policy depends on some specific parameters such as classification of vehicle
(model, year of make, type etc.), value etc.

Motor Insurance Policy Clauses

There are certain clauses which very much an integral part of car insurance that a buyer should
be aware of.

You as an insurance owner cannot claim for destruction or damage occurring to the car due to
the following:

 General wear and tear of car

 General aging of vehicle
 Depreciation
 Consequential loss
 Mechanical breakdown
 Breakdown due to electrical faults
 Wear and tear of tubes and tires
 If the vehicle is used for purposes other than stated in the 'restrictions' of usage in the policy
agreement
 Car being used outside India’s geographical boundaries
 Driving without a valid license
 Driver under the influence of alcohol or drugs
 Loss or damage occurred due to nuclear risk, war, or mutiny

Making Claims for Car Insurance

If you are involved in an accident or damaged someone's car, you can claim for insurance.

In order to make such as a claim, you require doing the following listed below:

 Record the licence plate number of car vehicle involved (if any)
 Record names and phone numbers of witnesses (if any)
 Reach out to the car insurance company and file a claim.
 Note down the claim reference number offered to you and make a list of documents needed for
processing of claim. Confirm whether the insurance corporation has a list for preferred garaged. If yes,
then you must get details of the same.

File an FIR (First Information Report) at the nearest police station if major damages, physical
injury, theft, or property damage have occurred.

Submit documents to the representative of car insurance company. You should also verify the
documents with originals.

Pay the garage authorities for additional charges.

MARINE INSURANCE

A marine insurance contract basically refers to a mutually agreed-upon insurance agreement

between two parties. In this, the insurer and the assured agree on the way the payment is going to be
made for any sort of damages that will or could occur during the journey. This agreement makes this
process easier automatically as the terms and conditions have been listed beforehand for both parties
making it a smooth process. 

The features of a marine insurance contract that are important are as follows: 

Insurable Interest:

There needs to be an insurable interest or else the agreement and policy will be void. Any person
who has their goods being transported via a marine journey and can be affected has an insurable interest
in it. 

Proposal and Acceptance:

Once the contractual agreement has been drawn up and there is a proposal for the assured, the
insurer accepts the contract. The policy can also be derived via a contract in case it has not been issued
separately. The insurance policy must include and specify: 

 The name of the assured

 The subject that is insured 
 The risk against which it has been insured against
 The policy that has been mutually agreed upon
 The names of the signatories

Consideration:

The premium is referred to as the consideration in this agreement. The premium is then paid
when the execution of this contract is being carried out. 

Policy Issuance:

Once the contract has been signed, stamped it can be used legally in the court of law. Despite its
issuance, the policy can be changed and rectified by the court in accordance with the intentions of the
signatories.

Floating:
 A floating policy is more of an open policy where all the things are no defined clearly. A marine
insurance policy is one such floating policy. Here it is left open. For example, the general terms are
mentioned but specifics such as the specific ship names have been left out. These are only decided later
on hence making it a floating policy.

Assignment:

The policy and contract can be transferred as per the assignment. This can however not be done
if there is a clause that does not allow this and actually prohibits this specifically. It can only however be
transferred before a loss has been incurred or after one has been incurred and not during it. 

Utmost Good Faith:

This contract is based on the principle of good faith. All details must be shared between the
insurer and the assured and nothing must be neglected or left out. It is the duty of the parties to disclose
all facts and figures and evaluate all possible situations that may occur. The assured must be aware of
any ordinary or extraordinary situation that he could possibly be embroiled in. 

Hence, a marine insurance contract contains several features and these are some of the most
important ones that you should remember while purchasing a plan from an insurance company.

Fire Insurance

Fire insurance is an agreement between two parties, i.e., insurer and insured. The insurer
undertakes to compensate for the loss or damage suffered by the insured in consideration of the insured
paying certain sum called ‘Premium’.

The term ‘fire’ claim must satisfy two conditions:

 There must be actual fire or ignition;

 The fire should be accidental but not incidental. The property must be damaged or burnt by fire.

Features of a Fire Insurance Contract

 A fire insurance contract is a contract of indemnity. It means the insured can only recover the
amount of loss subject to a maximum of the sum assured.
 The insured person should have insurable interest in the subject-matter of the ‘contract, both at
the time of the contract and at the time of loss.
 A contract of fire insurance covers the risk of loss resulting from fire or any cause which is a
proximate cause of such loss.
 A fire insurance contract is an yearly contract.„It automatically lapses after the expiry of the
year, unless it is renewed.

Insurable Interest in fire insurance

In case of fire insurance, insurable interest should exist at both times, i.e., while taking policy
and also at the time of suffering loss. The following persons have insurable interest in the fire insurance:
  The owner of goods in his own goods.

 The owner of the property in his property.

 The agent in the goods of the principal.

 The trustee in the ‘goods of the trust’.

 The pledger in his pledged goods

 The partner in the assets of the firm.

Travel Insurance

Travel insurance is a type of insurance that covers the costs and losses associated with traveling.
It is useful protection for those traveling domestically or abroad. 

Any companies selling tickets or travel packages give consumers the option to purchase travel
insurance, also known as travelers insurance. Some travel policies cover damage to personal property,
rented equipment, such as rental cars, or even the cost of paying a ransom. Frequently sold as a package,
travel insurance may include several types of coverage. The main categories of travel insurance include
trip cancellation or interruption coverage, baggage and personal effects coverage, medical
expense coverage, and accidental death or flight accident coverage.

Coverage often includes 24/7 emergency services, such as replacing lost passports, cash wire
assistance, and re-booking canceled flights. Also, some travel insurance policies may duplicate existing
coverage from other providers or offer protection for costs that are refundable by other means. 

Take a look at these 5 key features of travel insurance and save yourself from confusion at the
time of emergency. Your travel insurance should:

1.Cover You For All the Medical Emergencies

Unfortunate events can happen anytime and the possibility of it being health related is more.
Imagine being stranded with your family in a foreign land in such a situation. Make sure you take a
wide coverage which takes care of your in-patient and out-patient medical expenses.

2.Cover against loss of Checked Baggage and Loss of Passport

Imagine the plight of a person who lands in a completely new place only to find out that his
baggage has been lost or that of a person who lost his passport while exploring places. You certainly do
not want to be stuck in this situation! Make sure you get a travel insurance plan which provides you with
coverage for these things

3.Cover You Against Personal Accident

  It is important to ensure that your travel insurance covers you against bodily injury or death
caused due to accidents.

4.Covers You For Trip Cancellation and Curtailment

Imagine a situation where a family member suddenly falls ill. While your travel arrangements
are made, you certainly cannot travel. Ensure that the travel insurance you opt for covers you for such
last minute trip curtailment or  cancellations

5.Covers You Against a Burglary While You Are Away

Home burglary happens mostly when no one is at home. Opting for a plan  which covers you for
a burglary at your home while you’re away is a wise decision.

For all those planning to travel soon, ensure that you keep these factors in mind. Take a look at
the best travel insurance plans available!

Transportation Insurance

Whether you are buying or selling goods from or to the international market, there is always a
risk that they may be damaged, lost or delayed in transit.

Most people in the supply chain who facilitate the movement of goods operate under conditions
limiting their liability in cases of loss, damage or delay. Traders should therefore insure their goods
against loss, damage or delay in transit.

Promoting Customer Loyalty for General Insurance

Customer loyalty indicates the extent to which customers are devoted to a company’s products
or services and how strong is their tendency to select one brand over the competition.

Customer loyalty is positively related to customer satisfaction as happy customers consistently

favor the brands that meet their needs. Loyal customers are purchasing a firm’s products or services
exclusively, and they are not willing to switch their preferences over a competitive firm.

Types of Customer Loyalty Programs

 Point-based loyalty program

 Tiered loyalty program
 Paid loyalty program
 Value-based loyalty program
 Coalition loyalty program
 Game-based loyalty program
1.Point-Based Loyalty Program

This is arguably the most common loyalty program methodology in existence. Frequent
customers earn points which translates into some type of reward such as a discount code, freebie, or
other type of special offer.

Where many companies falter in this method, however, is making the relationship between
points and tangible rewards complex and confusing.

"Fourteen points equals one dollar, and twenty dollars earn 50% off your next purchase in
April!"

That's not rewarding. That's a headache.

If you opt for a points-based loyalty program, keep the conversions simple and
intuitive.Although a points system is perhaps the most common form of loyalty programs, it isn't
necessarily applicable to every type of business. It works best for businesses that encourage frequent,
short-term purchases, like Dunkin' Donuts.

2. Tiered Loyalty Program

Finding a balance between attainable and desirable rewards is a challenge for most companies
designing loyalty programs. One way to combat this is to implement a tiered system which rewards
initial loyalty and encourages more purchases.

Present small rewards as a base offering for being a part of the program, and then encourage
repeat customers by increasing the value of the rewards as they move up the loyalty ladder. This solves
for the potential issue of members forgetting about their points (and never redeeming them) because the
time between purchase and gratification is too long.

The biggest difference between the points system and the tiered system is that customers extract
short-term versus long-term value from the loyalty program. You may find tiered programs work better
for high commitment, higher price-point businesses like airlines, hospitality businesses, or insurance
companies.

3. Paid (VIP) Loyalty Program 

Loyalty programs are meant to break down barriers between customers and your business ... so
are we seriously telling you to charge them a fee?

In some circumstances, a one-time (or annual) fee that lets customers bypass common purchase
barriers is actually quite beneficial for both business and customer.

If you identify factors that may cause your customers to leave, you can customize a fee-based
loyalty program to address those specific obstacles.

For example, have you ever abandoned your online shopping cart after tax and shipping were
calculated? This is a frequent issue for online businesses. To combat it, you might offer a loyalty
program like Amazon Prime — by signing up and paying an upfront fee, customers automatically get
free two-day shipping on orders (plus other awesome benefits like free books and movies).
4. Value-Based Loyalty Program

Truly understanding your customer requires you to identify the values and desires of your target
audience — in doing so, you can encourage customer loyalty by targeting those characteristics.

While any company can offer promotional coupons and discount codes, some businesses may
find greater success in resonating with their target audience by offering value in ways unrelated to
money — this can build a unique connection with customers, fostering trust and loyalty.

5. Coalition (Partnership) Loyalty Program

Strategic partnerships for customer loyalty (also known as coalition programs) can be an
effective way to retain customers and grow your company.

Which company would a good fit for a partnership? The answer depends on your customers'
everyday lives, needs, and purchase processes.

For example, if you're a dog food company, you might partner with a veterinary office or pet
grooming facility to offer co-branded deals that are mutually beneficial for your company and your
customer.

When you provide your customers with relevant value that goes beyond what your company
alone can offer them, you're showing them that you understand and care about their challenges and goals
(even those you can't solve alone). Plus, it helps you grow your network to reach your partners'
customers, too.

6. Game-Based Loyalty Program

Who doesn't love a good game? Turn your loyalty program into a game to encourage repeat
customers and — depending on the type of game you choose — solidify your brand's image.

With any contest or sweepstakes, though, you run the risk of having customers feel like your
company is jerking them around to win business. To mitigate this risk, ensure your customers don't feel
like you're duping them out of their rewards.

The odds should be no lower than 25%, and the purchase requirements to play should be
attainable. Also, make sure your company's legal department is fully informed and on-board before you
make your contest public.

When executed properly, this type of program could work for almost any type of company and
makes the process of making a purchase engaging and exciting.