Chapter:1 INSURANCE

1.1 INTRODUCTION TO INSURANCE

When broken down into simple terms, insurance can be considered a method for distributing risk among a group of people so that no single person feels the full effects of a loss. Defined that way, insurance has a long history. In ancient China, farmers crops were taken to market via water, rather than land. If a ship sank, obviously it meant great financial loss. Eventfully, farmers distributed their crops across a group of ships so that the sinking of one ship wouldnt ruin one lone farmer. Other ancient societies had similar systems of safe-guarding individual investments. In the 13th century, European merchants began insuring their ships by signing contracts with wealthy benefactors that provided compensation in case a ship was lost at sea. Insurance is a very old idea. As far as 3000BC Chinese merchants spread their shipments among a number of different vessels so as to manage their risk of a loss. Lloyds, the insurance market, has been selling insurance in London since the 1600s, after a group of ship owners met in a coffee shop to discuss sharing the cost of dangerous voyages. Nowadays you can insure everything from your car to your body parts, from your legal expenses to the type of weather that you want on your holiday. But the idea behind insurance is simple. Insurance is taken out when you pay a set amount of money, known as a premium, to an insurance company that in return agrees to cover your costs if a certain predetermined event occurs. The insurance company is, in effect, taking on your risk.
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Insurance is a federal subject in India and has a history dating back to 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the countrys GDP while general insurance premiums to 0.65% of Indias GDP the Insurance sector in India has gone through a number of phrases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance company wanting to have a lions share. Currently, the largest life insurance company in India is still owned by the government. Insurance is a risk-reducing investment in which the buyer pays a small fixed amount to be protected from a potential large loss.Insurance is a financial topic of paramount importance for every individual. Insurance is a designed to protect the financial well-being of you and your depends in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between you and the insurance company. In exchange for payments from you (called premiums), the insurance company agrees to pay you a sum of money
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upon the occurrence of a specific event. That event may be as mundane as a visit to the doctor or as serious as a car crash, depending on the type of insurance.

1.2 DEFINITION OF INSURANCE

The term insurance can be defined in both financial and legal terms. The financial definition focuses in an agreement that redistributes the cost of unexpected losses. That is the collection of small premium payment from all exposed and distributed to those suffering loss. The legal definition focuses on contractual agreement whereby one party agrees to compensate another party for losses. The financial definition provides for the funding of the losses whereas the legal definition provides for the legally enforceable contract that spells out the legal rights, duties and obligations of all the parties of the contract.

In Financial Sense Insurance is a social device in which a group of individuals (insureds) transfer risk to another party (insurer) in order to combine loss experience, which permits statistical prediction of losses and provides for payment of losses from funds contributed (premiums) by all member who transferred risk.

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In Legal Sense A contract of insurance is contract by which one party in consideration of the price paid to him proportionate to the risk provides security to the other party that he shall not suffer loss, damage or prejudice security to the other party specified events. Insurance is meant t protect the insured against uncertain events which may cause disadvantage to him. Life insurance is a distinctive type of insurance where there is certainly of the payment of specified amount either on the death of the maturity of the policy which ever is earlier

1.3 Purpose & Need of Insurance

Assets are insured, because they are likely to be destroyed or made non-functional before the expected life term, through accidental occurrences. Such possible occurrences are called perils. Fire, floods breakdown, lightning earthquakes, etc are perils. If such perils can cause damage to the asset, it is said that the asset is exposed to that risk. Perils are the event. Risks are the consequential losses or damages. The risk to an owner of the building, because of the peril of the earthquake may be a few lakhs damage.
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or few crores of rupees, depending on

the coast of the building, the contents in it and the extent of

The risk only means that there is possibility of loss or damage. The damages may or may not happen. The earthquake may or may not happen. The earthquake may occur. But the building may not happen affected at all. Insurance is done against the possibility that the damage may happen. There has to be an uncertainty about the risk. The word possibility implies uncertainty. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human being, death is certain but the time of death is uncertain. The person is insured, become of the uncertainty about the time of his death. In the case of aperson who is terminally ill, the time of death is not uncertain, through not exactly known. It would be soon.he cannot be insured.

Insurance does not protect the asset. It does not prevent its loss due to peril. The peril cannot be avoided through insurance. The risk can sometimes be avoided through insurance. The risk can sometimes be avoided, through better safety and damage control measures. Insurance only then tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. They are the ones who benefit from the asset and therefore, would lose, when the asset is damaged. Insurance only compensates for the lossesand the losses- that too, not fully.

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Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of noneconomic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.

1.4 Role of Insurance

On the basis of the following advantages of insurance the importance of insurance and its role is made clear: 1. Insurance protects and safe guards the interest of the individuals and businessmen in their business proportions. It gives them safety and creates confidence in their minds. Indirectly this brings expansion of business activities. 2. It results in diversification of risk among specialized professional agencies called insurance company 3. It promotes the rate of savings and investments and leads to capital formation in its economy. 4. Insurance creates a sense of security for loans and advances offered by banks. Risk in granting loans is limited if the property is properly insured by the borrower. 5. It brings safety in storage and transportation and leads to expansion of commercial activities.

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6.

Insurance

company

act

as

underwriter,

guarantor,

subscriber and financier of industrial concerns. They help and support their clients in different ways and in different areas 7. It gives proper investment advice to businessmen and creates proper investment climate in the country. 8. It accelerates the process of industrialization by rendering various services. This suggest the role of insurance in the society as well as in the development of national economy.

1.5 FUNCTIONS OF INSURANCE

The functions of insurance can be bifurcated into three parts: 1. Primary functions 2. Secondary functions 3. Other functions

1. THE PRIMARY FUNCTIONS OF INSURANCE

Provide Protection: The primary function of insurance is to provide

protection against future risk, accidents and uncertainty. Insurance

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cannot check the happening of the risk, but can certainly provide for the losses of risk.

Collective bearing of risk: Insurance is a device to share the

financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.

Assessment of risk: Insurance determines the probable volume of

risk by evaluating various factors that give risk to risk. Risk is the basis for determining the premium rate also.

Provide Certainity: Insurance is a device, which helps to change

from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.

2. THE SECONDARY FUNCTIONS OF INSURANCE

Prevention of Losses: Insurance cautions individuals and

businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safely instructions; installation of
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automatic sparkler or alarm systems, etc. prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured.

Small Capital to Cover Larger Risks: Insurance relieves the

businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of larger industries:

Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

3. THE OTHER FUNCTIONS OF INSURANCE

Means of saving and Investment: Insurance serves as savings and

investment, insurance is a compulsory way of saving and it restricts the

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unnecessary expenses by the insureds For the purpose of availing income-tax exemptions also, people invest in insurance.

Risk Free Trade: Insurance promotes exports insurance, which

makes the foreign trade risk free with the help of different types of policies under marine insurance cover.

Source of Earning Foreign Exchange: Insurance is an

international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.

CHAPTER 2 HOME INSURANCE

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2.1 INTRODUCTION TO HOME INSURANCE

Home is where the heart is. There are no truer words than these. Our entire life revolves around our home. Besides being an investment of our life's savings, home is also the place of our dreams. India has population of 115 crores (1150 Million) assuming family size of 5 this means that we have 230 million homes.According to our estimate 2% of the homes are insured in India, which means that 46 million homes are insured. If we take average premium at Rs. 2000/- per home then figure should be RS. 920 crores. The truth is we are no where near it. We feel that figure of 2% is not correct figure and the homes insured in India are 0.5% which means half of 1%. Home insurance is a necessary precaution one must take when owning a home. If you purchase insurance you pay a decided premium to have your house insured and protected. Some home owners have lower premiums to pay because their homes are in safe areas and less likely to be affected by a disaster.
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Home Insurance deals with the coverage of homes from specific injuries or accident that might occur in the house. Home Insurance policy has a fixed duration like they have start date known as date of commencement and end date like date of maturity. Home insurance, also commonly called hazard insurance or homeowner's insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. It requires that at least one of the named insureds occupies the home.

2.2 HISTORY OF HOME INSURANCE

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The history of homeowners Insurance dates back to the 1950s. This policy was first introduced in the United States of America on the 15th of September 1950. Although that was its official founding homeowners Insurance had been around for some time and has been widely used in Great Britain even before World War. Other areas across the world also used this policy besides the United States and Britain. Before in the 1940s an Insurance law was passed in the United States by the governing body and it was during this time that certain insurance policies were regarded and created. The policies were written and passed through before they officially became legal and that was the beginning of homeowners Insurance also known as Home Insurance. Before the 1950s before the homeowners Insurance became in to law there used to be certain separate policies on different perils that could impinge on your home. Then as a home owner one would have had to purchase separate policies for fire, lightning strikes, earthquakes, theft and the more which was kind of a daunting task to do. In the 1950s the policies were reviewed and they allowed the home owner to buy all the insurance they needed in a single policy. This was of great benefit to the home owner and still continues to be. However policies differed according to the insurance company and that was still a difficulty.

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The first form of insurance began in the United States in the form of fire insurance. It began in Charles Town, now popularly known as Charleston, South Carolina. It was then supported by Benjamin Franklin who standardized the practice of insurance, specifically against fire.

2.3 HOMEOWNERS INSURANCE.

When a major natural disaster strikes, rebuilding can be relied on volunteers, the government, and donations from private sectors. At the same time, many others are able to return to their lives because of the adequate insurance coverage that are being provided by homeowners insurance. But of course, this kind of insurance is not tailor made for victims of major disasters only. Home owners insurance has many applications which include water destruction, property wreckage and even when someone is injured in an accident inside your home. All of these are reasons for you to consider homeowners insurance as essential when you own a house.

2.4 HOMEOWNERS INSURANCE CHALLENGES.

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Sometimes there are more challenges to getting insurance than just finding the best rate. At times, it can be difficult to get insured at all. If you live in an area considered high risk, such as one with severe weather conditions or an urban area with lots of crime and theft, insurance companies may decline to cover you. A home with old plumbing, heating or electrical systems may also be denied coverage, though these problems can generally be fixed through repairs.

2.5 NEED OF HOME INSURANCE

The largest single investment most consumers make is in their home. The consumer can protect his or her home, possessions, and liability with a home insurance policy. In addition to its availability to homeowners, similar coverage is available to those who rent homes or apartments. These policies are referred to as tenants or renters homeowners policies. A condominium owner may purchase a condominium homeowners policy to insure personal property. Some policies may also include any additions or alterations not insured by the condominium association. It is important to check with your condominium association and your agent before buying a policy to make sure you are adequately covered. Home is often the most valuable asset we have in our life. Purchasing home insurance can give the sense of security because it will cover various risks to the house itself as well as injuries to third parties visiting you in the house. There are basically two main reasons why people purchase home insurance. First, everybody wants to protect their property from any damages or
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destruction. Second, if you qualify for a mortgage, the lender will oblige you to insure the collateral. So if you are going to or already own a house, an insurance policy is often the necessary investment to avoid financial losses in future.

2.6 INSURANCE ELIGIBILITY.

If a company refuses to insure you, its probably because they consider your home in some way to be too much of a risk. In that case, find out if there are any improvements you can make. If you are in a new home, ask a realtor for companies that insure in the area, or if you just purchased your home, find out from the previous owners who insured their home. If you are eligible under the law you cannot be denied insurance solely because of the age of your house, its location, or the type of neighborhood you live in. however, you may be considered ineligible and can be turned down for insurance if: Within the past 5 years, you have found guilty of a crime (or an attempt to commit a crime) of arson, the use of explosives, or destroying property. Taxes on the property you want to insure are over 2 years past due. The property you want to insure is used for illegal or dangerous purposes. You refuse to buy the minimum required amount of coverage for the type of policy you want to buy.
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 If your home has a physical condition which presents an extreme likelihood of a significant loss. Within the past 2 years your home insurance has been cancelled because of non- payment of premium. This can be overlooked if you pay the entire premium on the policy you are buying in advance. A company requires you to be a member of a group, club or organization and you choose not to join. Within the past 5 years, you have been denied payment of a claim because there was evidence of arson or fraud on your part.

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CHAPTER 3 POLICIES 3.1 TYPES OF POLICIES IN HOME INSURANCE

An insurance form is another name for an insurance policy, and it specifies what perils your home and belongings are insured against. The following are descriptions of the various insurance forms available for homeowners, renters, and condominium owners. Not all insures use these exact terms to describe their home insurance forms.

INSURANCE FORMS
There are several types of homeowners policies available. They vary according to the coverage in the policy and the type of dwelling being insured. Currently, the ISO has seven standardized homeowners insurance forms in general use:
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HO1 Basic Form Homeowner Policy A basic policy form that provides coverage on a home against 11 listed perils; contents are generally included in this type of coverage, but must be explicitly enumerated. The perils include fire or lightning, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion riot or civil commotion, glass breakage, smoke, volcanic eruption, and personal liability. Exceptions include floods, earthquakes. HO2 Broad Form Homeowner Policy A more advanced form that provides coverage on a home against 17 listed perils (including all 11 on the HO1). The coverage is usually a "named perils" policy, which lists the events that would be covered. HO3 Special Form Homeowner Policy The typical, most comprehensive form used for single-family homes. The policy provides "all risk" coverage on the home with some perils excluded, such as earthquake and flood. Contents are covered on a named peril basis. (Note: "All Risk" is poorly termed as it is essentially named exclusions (i.e., if it is not specifically excluded, it is covered)) HO4 Renter's Insurance The Tenants form is for renters. It covers personal property against the same perils as the contents portion of the HO2 or HO3 HO5 - Premier Homeowner Policy Covers the same as HO3 plus more (can also be achieved by endorsing an HO15 to the HO3)
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HO6 Condominium Policy The form for condominium owners. HO8 Older Houses The Modified Coverage form is for the owner-occupied older home whose replacement cost far exceeds the propertys market value

The broad form (usually called HO-2) covers fire or lightning, windstorm or hail, theft, explosion, smoke, removal of property endangered by peril, vandalism and malicious mischief, and riot or civil commotion. The HO-2 also covers building collapse: freezing of or accidental discharge of water or steam from within plumbing, heating or air conditioning systems and domestic appliances; falling objects; weight of ice, snow, or sleet: and rupture of bursting of stream or hot water heating systems. The special form (HO-3) insures your dwelling and detached structures against loss or damage from any peril except for the ones specifically listed in the policy as being excluded. An HO-3 also provides coverage for damage to personal property caused by any of the perils covered by the HO-2. For an additional premium, a special personal property coverage endorsement (HO15) can be added to extent the HO-3 to provide comprehensive coverage on unscheduled personal property.

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The comprehensive form (HO-5) is not often sold today, but you could have one from earlier years. It has an even shorter list of exclusions. Not all insurers offer the HO-5, but many offer policies similar to the HO-5.

The modified coverage form (HO-8) is designed to provide package coverage to the owner-occupants of homes that do not meet all the requirements applicable to other homeowner policies. An HO-8 provides building and personal property coverage slightly more restrictive than that of other homeowner policies for owner occupants that include a replacement cost clause. The HO-8 is particularly well-suited for residences that have suffered extensive depreciation. Your home may not qualify for one of the homeowners package policies; therefore, a company may offer you limited coverage on your house. This coverage may be Fire and Extended Coverage. Your home and only your home would be covered for damage due to very specific perils or losses.

DWELLING POLICY
A dwelling policy provides more limited property coverage than a homeowners policy. The dwelling policy provides property coverage only (protection for individuals and families against loss to a dwelling or personal belongings). The homeowners policy covers more. It offers a combination of property and liability coverages. Dwelling policies may be used to insure homes that dont qualify for homeowners insurance. For example, they are commonly used to insure
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seasonal homes which are unoccupied for portions of the year. To qualify for dwelling insurance, a building does not have to occupied by the owner, and it may even be under construction. Some types of stationary mobile homes qualify as well as homes with up to five boarders and four unit apartment complexes.(although some mobile homes may qualify for the broader coverage of a homeowners policy You will also see the term dwelling appear in a homeowners policy. In the context of a homeowners policy, dwelling means the structure in which the homeowner lives

RENTERS INSURANCE.
If you rent an apartment or a house, you are responsible for insuring your personal possessions and for personal liability coverage. Personal liability coverage protects renters the same as it would if you were a homeowner. The owner of the property is responsible for insuring the building and for obtaining his or her own liability coverage.

TENANTS FORM (HO-4).

Tenants Form (HO-4) or renters policy insures your household contents and personal belongings against the perils included in the homeowners HO-2 policy. Like homeowners insurance, it provides coverage for additional living expenses, medical payments, and includes personal liability protection.

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CONDOMINIUM INSURANCE.
Your condominium association should purchase a policy that covers the building, including any common walls and grounds, and includes personal liability protection associated with common properties. You have a right to examine the association policy. To protect your contents and interior walls, you may purchase a Unit- Owners form. An individual unit-owner policy is similar to the homeowners and renters insurance policy.

CONDOMINIUM UNIT-OWNERS FORM(HO-6).

It provides coverage for a unit-owner who wishes to insure his or her property or to cover any items not insured by the associations policy. An HO-6 policy will also pay for property damage to personal belongings, wall, floor, and ceiling coverings and any accessories not originally installed in the unit. It also provides personal liability protection.

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3.2 OTHER TYPES OF POLICIES

MOBILE HOMEOWNERS POLICY The mobile homeowners policy is a package of insurance written specifically for mobile homes, that includes coverage on the mobile home as well as theft and liability protection.

A mobile homeowners policy can be either a named peril or a comprehensive policy. The named peril policy usually provides coverage for fire, lightning. Explosion, transportation, theft, windstorm, riot or civil commotion, and personal effects. The comprehensive policy provides protection against all risks of physical loss, with started exceptions. You should be aware that you are liable for any damages resulting from an unnamed risk or for exceptions in your comprehensive policy. A mobile homeowners policy also provides also provides personal property coverage, personal liability coverage and medical payments coverage. A mobile homeowners policy provides the following optical coverages:

CONSENT TO MOVE ENDORSEMENT waives the prohibition

against moving the mobile home and extends coverage for 30 days

TRANSPORTATION COVERAGE provides collision coverage for

your mobile home and its contents against damage by collision or upset while being transported from one location to another.

LIEN HOLDERS SINGLE INTEREST COVERAGE provides

coverage to protect a lien holders interest in a mobile home and its equipment
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against loss due to collision damage or embezzlement, conversion, or secretion while the mobile home is in lawful possession of the insured. The premium charged for such coverage must be paid for by the lien holder and by the tenant or the person owning the mobile home.

MOBILE HOME TIE- DOWN REQUIREMENTS

An insurer may require that your mobile home be secured to the ground by approved tie-downs and ground anchors, unless the mobile home is secured to the ground on a permanent foundation. It is up to the insured to provide for such tie-downs or there is a possibility that insurance coverage will not be provided because of the eligibility requirements imposed by the company. Tie down requirement vary among insurers. Contact your insurance agent or insurance company to see exactly what your insurance companys requirements are with respect to tie-downs. Mobile home policies are written on an actual cash value basis, which means that the depreciation of the mobile home is taken into consideration at the time of a loss. There are a few companies currently writing replacement cost coverage on mobile homes. You need to check with your agent to see if this coverage is available. Mobile home policies may require either a wind deductible and/ or hail deducible. Some companies offer higher deductibles that will reduce your total premium charge. Be sure you understand what specific deductibles are involved with your mobile home policy. Make sure any additions to the mobile home are added to your insurance policy. Check with your agent to be sure that adjacent sheds, tip out rooms, skirting, and rooms built on are covered by your policy.
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FARM OR RANCH POLICIES

A farm owners policy resembles a homeowners policy in many ways. The usual farm owners policy does not provide replacement cost coverage on your dwelling no matter what policy limits you may purchase. You can buy replacement cost coverage for your farm, but you must ask for it. Crops, livestock, and farm equipment usually must be insured under separate policies. Check with your agent to make sure that your entire farm operation is adequately insured.

FLOOD INSURANCE
The homeowners insurance policy excludes water damage as a result of flooding. You may, be able to purchase flood insurance through the National Flood Insurance Program (NFIP). To qualify for the NFIP program, you must live in a designated community that complies with the government guidelines for flood prevention. The best person to help you buy flood insurance is the agent or the insurer from whom you obtain your homeowners or automobile insurance. Flood insurance may be bought through any licensed property. Some insurers actually issue the flood insurance policies, in partnership with the federal government, as services and convenience for their policy holders. In those instances, the insurer handles the premium billing and collection, policy issuance, and loss adjustment on behalf of the federal government. These insurers are called Write Your Own (WYO) insurers. If your agent or insurer is not in the WYO program, you may be referred to another agent or insurer involved in the program. Your agent may also order the policy for you directly from the federal government.

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SEWER BACKUP
Losses from the backing up of a sewer or sump pump are not covered under your homeowners insurance policy, and are probably not covered by your flood insurance policy. Sewer backup coverage is an endorsement available through most insurance companies, but it may not be offered to you when purchasing homeowners insurance coverage if you dont ask for it. Ask your agent for more information on sewer backup coverage.

3.3 COMPONENTS OF HOMEOWNERS POLICY.

Your home is probably your largest and most important investment - not to mention that its also the roof over head. Heres how to make sure you get right coverage. While plans may vary from insurer to insurer, a standard homeowners policy generally has four components.

Coverage for the structure

This is the most important aspect of any policy. It covers damage to your house from fire, storms and other disasters (see exceptions below). Its wise to insure your home for 100 percent of what it would cost to rebuild it. If destruction is complete if , for example, your home burns to the ground you will then have adequate funds. To determine what the amount would be, hire a local builder who can give you an estimate. Or figure it out yourself by using the free calculator at Building-Cost.net. A basic policy will insure your home against major disasters, except for
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flood, earthquake, war or nuclear accident. (For flood and other coverage, see below). In addition, it will cover other structures on your property like a separate garage or shed. Some companies cover you at just 10 percent of the value of the structure of your home.

Coverage for contents

Most plans will also cover the cost of replacing your personal belongings if they are stolen or lost in a fire or other insured disaster. The standard coverage limit is equal to 50 percent of the value of the structure of your home. So if you have determined that it will cost $200,00 to replace your home, then you could have about $100,000 of adequate, make a detailed list of the contents of your home including furniture, clothing, tools and appliances. Or use the insurance Information Institutes free home inventory software. Its also smart to take pictures of all your valuable and save them in a safe deposit box or fireproof box doing so will make filing a claim much simpler. Most companies provide off-premises coverage as well, meaning that your belongings will be covered anywhere in the world. So if your camera is stolen while youre on vacation, you can file a claim for reimbursement. Some companies limit the amount to 10 percent of the total coverage you have on your possessions. You will also probably have up to $500 of coverage for unauthorized use of your credit cards.

Liability Protection
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A standard policy covers you in three ways. It covers damage to other peoples property. If your son accidentally throws a ball through your neighbors window, your policy will cover the cost of the damages. It covers personal liability. If someone sues you or the courts find that you are legally responsible for someone elses injury or property damage, your policy pays for both the cost of defending you in court and any court awards up to limit of your policy. It also covers medical expenses for injuries suffered by others. If a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. Most homeowner policies provide a minimum of $100,000 of liability protection. But some experts recommend that you purchase at least $300,000 in protection or more, depending on your assets.

Reimbursement for additional living expenses Should a fire or

any other insured calamity destroy your home and force you to leave, your plan will cover your expenses. In general, this coverage includes hotel bills, restaurant meals and rental car bills. Many policies provide coverage equal to about 20 percent of the coverage on your house.

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3.4

COVERAGE

INCLUDED

IN

HOME

INSURANCE

POLICIES
BASIC COVERAGES INCLUDED IN HOME INSURANCE POLICIES. Home insurance, is also called property insurance. The homeowners insurance policy is a package policy that combines more than one type of insurance coverage in a single policy. There are four types of coverages that are contained in the homeowners policy: dwelling and personal property, personal liability, medical payments, and additional living expenses.

PROPERTY DAMAGE COVERAGE

Property damage coverage helps pay for damage to your home and personal property. Other structures such as a detached garage, a toll shed, or any other building on your property are usually covered for 10% of the amount of coverage on your house. Personal property coverage will pay for personal property including household furniture, clothing, and other personal belongings. The amount of insurance coverage is usually 50% of the policy limit on your dwelling. The coverage is also limited by the types of loss listed in the policy. The coverage only pays the current cash value of the item destroyed, unless you purchased replacement cost coverage. Homeowners policy also provides off-premises coverage. This means that the policy covers belongings against theft even when they are not inside your home. Your insurer will reimburse you for the cost of replacing your suitcase and its contents if it were lost or stolen while you were on vacation, but only for replacing them with items of like kind and quality.
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PERSONAL PROPERTY FLOATER

Your homeowners insurance policy may provide only limited coverage for furs, jewelry, silver, and other valuables. It may be necessary to insure these valuables with a special addition to your homeowners policy, such as a personal property floater. A personal property floater itemizes each article, gives description of the article insured, and lists excluded perils. It often provides coverage that is broader than the coverage granted in the home insurance policy. Your homeowners insurance policy does not cover your pets, your car, and any aircraft. Although your policy does not cover your pet or damage it does to your possessions, it will cover damage your pet does to others or their possessions.

PERSONAL LIABILITY COVERAGE

Homeowners policies provide personal liability coverage that applies to non auto accidents on and off your property if the injury or damage is caused by you, a member of your family, or your pet. The liability coverage in your policy pays both for the cost of defending you and paying for any damages the court rules you must pay. And unlike the other coverage in your policy, liability insurance does not have a deducible that you must meet before the insurer begins to pay losses. The basic limit for liability coverage is usually $100,000 for each occurrence. You can request higher limits that are available for an additional cost.
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MEDICAL PAYMENTS COVERAGE.

Medical payments coverage pays if someone outside your family is injured at your home regardless of fault. This includes payment for reasonable medical expenses incurred within one year from the date of loss for a person who is injured in an accident in your home. The coverage does not apply to you and members of your household. The medical payments portion of your homeowners policy will also pay if you are involved in the injury of another person away from your home in some limited circumstances. Medical payments coverage limits are generally $1,000 for each person. Higher limits of medical payments coverage are available at additional cost.

ADDITIONAL LIVING EXPENSES

If it is necessary for you to move into a motel or apartment temporarily because of damage caused by a peril covered by your policy, your insurance company will pay reasonable and necessary additional living expenses. The typical policy will pay an amount up to 20% of the policy limit on your dwelling for these expenses. If you move in temporarily with a friend or relative and do not have any extra expenses, you will not be paid any additional living expenses by your insurance company.

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3.4 ADDITIONAL COVERAGE

Homeowners policy generally provides the following additional coverages for expenses that go beyond the repair of the house.

DEBRIS REMOVAL
The policy covers the expenses of having of the debris that is left as a result of the loss removed from the premises.

TREES, PLANTS, AND SHRUBS

Trees, plants, and shrubs around the house are usually covered for 5% of the insurance on the house. A homeowners policy provides coverage against theft, fire, lightning, explosion, vandalism, riot, and even falling aircraft. But it doesnt cover them against windstorm damage. The reason is the wind causes so much damage to gardens and landscaping, including it in coverage would make the insurance unaffordable for most people.

CREDIT CARD COVERAGE

Personal property coverage extends to credit cars as well. Most policies will pay to cover unauthorized use of your credit cards.

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COMMON EXCLUSIONS
Most homeowners policies do not provide coverage for loss of animals, birds, fish, or damage to automobiles. Water damage caused by flood, surface water, overflow of a body of water, or spray from any of these whether or not driven by wind are usually excluded. Water damage resulting sewers or drains that have backed up are also excluded. Damage resulting from war, nuclear hazard, neglect, earth movement, or power failure are not covered. If you own a boat, you should ask your agent about whether or not it is covered under your policy. Some policies cover small motorboats and sailboats, but not larger ones. What is not covered by your insurance policy as well as what is varies from insurer to insurer. Ask questions before you purchase a policy. Here is a sample of commonly asked questions:

Am I covered for food spoilage during a power failure? What about debris removal? from my building? - -from my neighbors buildings? What happens when a tree falls on my roof? How does the insurer figure depreciation? Is ice damage covered? How do the additional living expenses benefit work? What kinds of proof of loss will I need? How do the deductibles work?
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 Is my TV antenna covered?

3.5 OPTIONAL COVERAGES SECONDARY RESIDENCE PREMISES ENDORSEMENTS

Homeowners coverage under this endorsement applies to a secondary residence (example: summer home). Remember that these secondary residences are not automatically covered by the home insurance policy on your primary or principal residence.

WATERCRAFT ENDORSEMENT
Applicable to small sailboats and outboard motor boats, this endorsement broadens personal liability and medical payments coverage on them.

THEFT COVERAGE PROTECTION ENDORSEMENT

As a result of this endorsement, your theft protection is broadened. The contents of your motor vehicle, trailer, or watercraft are covered without proof of forcible entry. This endorsement applies only to forms HO-2, HO-3, and HO-4.

CREDIT CARD FORGERY AND DEPOSITORS FORGERY COVERAGE ENDORSEMENT

Loss, theft, or unauthorized use of credit cards (with certain exceptions) is covered by this endorsement. Also covered is the forgery of any check, draft,
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promissory note, etc., again with certain exceptions. No deducible applies to this endorsement.

DEDUCTIBLES
Deductibles reduce costs because you pay the first $250 or $500 of every loss. The deductible applies to only coverage on your house and personal property. Since you are actually self-insuring for the deductible amount, you should ask if the savings is worth it. There are many kinds of deductibles. Some insurers have flat $50 or $100 deductibles applying to all covered losses. Others apply the deductible only to certain losses. Some provide a disappearing deductible. The deductible decreases as the amount of the loss increases. When your loss exceeds a certain amount, the deductible disappears and the insurer pays the full amount. The higher the deductible, the lower the premium on your policy will be. For example, homeowners policies that provide for $100,000 to $250,000 coverage, the standard deductible is $250. If you take a deductible of $500, the premium will be about 5% to 10% lower.

3.6 BUYING THE CORRECT AMOUNT OF COVERAGE. TYPICAL COVERAGES

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In a homeowners policy, the amounts of personal property and other coverage automatically provided is a fixed percentage of the amount of the coverage on the home because of age or wear and tear. In order to qualify for replacement cost coverage, the dwelling is required to be insured to at least 80% of the replacement cost. The amount of replacement cost coverage available is limited to the amount of insurance you choose to buy. The coverage amount is stated on the declarations page of your policy. If you purchase an amount less than 80% of replacement cost of your home, your insurance company will not be obligated to pay the total cost of loss to your home even if there is a small l The loss settlement section of your policy explains how the settlement is calculated. Do not confuse replacement cost with market value. Market value is a real estate term that describes what the current value of your home would be if you were to sell it, including the price of the land.

ACTUAL CASH VALUE is a value of your property when it is damaged

or destroyed. This is usually figured out by taking the replacement cost and subtracting depreciation. Contents coverage (for such items as furniture, television sets, and appliances) is usually on an actual cash value basis. For example a chair that costs $500 to replace may have a reasonable life of 20 years. If it is destroyed after 10 years, its actually cash value will be much less than $500, probably about $250.
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Most policies pay for losses to your contents on an actual cash value basis, but a better option is the replacement cost coverageReplacement cost coverage is available for an additional premium. GUARANTEED REPLACEMENT COST COVERAGE (ALSO CALLED EXTENDED REPLACEMENT COST) Guaranteed replacement cost coverage is a more complete coverage for your home. It will pay the full amount needed to replace your home if it is destroyed by a covered peril, even if that amount is more than policy. To obtain this type of coverage, you typically must meet specific underwriting rules and conditions of the company. This may include selecting a dwelling limit equal to 100% replacement cost and increasing the amount of your insurance on a monthly, quarterly, or yearly basis to keep up with the inflation rate. Many companies will not offer this additional protection on older homes. Check with your insurance agent to determine if an additional premium is required and if there are exclusions or conditions that apply. Most homeowners policies include an inflation-guard. This automatically increases the value of your policy as for example, under a home-owners Form 2, this is how it would work:

PERCENT OF DWELLING
TYPE OF PROPERTY INSURED FOR INSURANCE: If dwelling is insured for $60,000 Detached garages, storage Sheds, etc. 6,000 10%
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Unscheduled personal property on premises (possessions) 30,000 50% Unscheduled personal property off premises 3,000 10% of personal property

Additional living expenses 12,000 20% Personal liability 100,000 per occurrence Medical payments 1,000

3.7 WAYS TO REDUCE THE COST OF HOMEOWNERS COVERAGE

Every homeowner insurer has its own package of special discounts to attract particular types of customers. Below is a sample of discounts to ask your agent about.

MULTI-POLICY
Having home, car or other policies with the same company will let you receive a package discount. Usually, the insurance agency will reward you with a discount on all policies- sometimes 10% or more.

DEDUCTIBLES

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Raising your deductibles can lead to significant money savings. A deductible is the amount you pay before the insurance company starts to pay your claim. You can choose a higher deductible in order to lower your insurance premiums(of course, if you dont mind taking on the added risk).

NON SMOKER DISCOUNT

A few insurers offer to reduce premiums for homeowners who do not smoke. (you will not qualify for this discount if any family member who lives with you is a smoker).

FIRE-RESISTANT BUILDING MATERIALS

A few insurers offer discounts for homes that are made of fire resistant materials.

HOME SECURITY SYSTEMS

Most home insurance companies will give you a discount for having a functional home security system in your home. It will protect your home from burglary and therefore make your house less of an insurance risk.

DEADBOLT LOCKS

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Many insurance companies provide discounts for deadbolt locks because they make your home safer and more secure. Deadbolt locks are rather inexpensive in comparison with the possible insurance savings. However, it is often required to have deadbolt locks on the doors.

CREDIT SCORE
A lot of insurance companies perform credit check to find out your financial responsibility and creditworthiness.

SENOR CITIZENS
Many companies offer a discount on home insurance to senior citizens over 55 years of age. If you qualify, check with your agent too see if this discount is available from your company.

AFFILIATED ORGANIZATIONS
Many insurances offer a discount if you are affiliated with certain organizations- for example, a credit union or college. Call your provider to find out whether they cooperate with any affiliated organizations.

PREVIOUS CLAIMS
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If you havent filed a home insurance claim in the past few years, it means that you are a low risk to home insurance companies. Thats why you can get a reduced rate.

SHOP AROUND
Get quotes from multiple insurance companies to make a careful comparison and find the best rates.

3.8 IF ONE HAVE A LOSS

CALL THE POLICE: Report theft losses to your police authority immediately. If you have a lost your checkbook or credit cards, notify the bank or credit Card Company.

CALL YOUR AGENT: Phone your agent promptly. Have your policy number ready and any information that might be relevant.

ASK YOUR AGENT: Find out what documents, forms and data youll need. If you have any questions, your agent will be able to assist you in filling out the forms.

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MAKE NECESSARY REPAIRS: If your property has been damaged, it is important to make any necessary temporary repairs to protect from further loss or damage. For example, if windows are broken, have them boarded up to protect against vandalism or weather damage.

SAVE RECEIPTS: Expenses for making necessary temporary repairs are covered under your policy, so be sure to save any receipts or bills. Permanent repairs must wait until the insurance adjuster has had a chance to review the damage.

DETERMINE THE DAMAGE TO YOUR PROPERTY: Begin by making a written list of what was damaged. Make a separate list of personal property items damaged beyond repair. If you have maintained a household inventory, process will be much easier. Contractors, catalogs, and local retailers also are good sources for current cost information.

SUBMIT A COPY OF YOUR LIST TO YOUR INSURER: the list should include information used to support the actual cash value, or if your policy covers the replacement cost of personal
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property, the replacement cost of the damaged items. The necessary information includes purchase dates, purchase price, and cost to replace with a similar item. Make your repot of the damage and your list as complete as possible. Use any purchase receipts, photos, or other information that is still available to help prove the value of your claim. If you cannot live in your damaged home, keep all receipts for additional living expenses, list them, and submit a copy to your insurer. Your insurer will make an offer to repay you for the additional expenses covered by your policy. It is important to keep the lines of communication open between you and the insurance company representatives. If you feel the amount of money offered by the insurer is not fair, there are several alternatives courses of action that you may consider: You can request that the loss be valued by appraisers who do not work for insurer. You can file a complaint with the OCI. You can hire an attorney to represent your best interests.

SOME TIPS ON LOSS PREVENTION

Taking steps to prevent losses is just as important as buying insurance to cover them: Install smoke and heat detectors near sleeping areas.

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 Keep your house or apartment clear of accumulated trash, oily rags, and combustible materials. Check lamps, lamp cords, and light switches to make sure there is no faulty wiring. Practice home fire drills. Make sure everyone (especially children) knows what to do in case of fire. Keep matches away frm children. Make sure that smokers do not smoke in bed.

Install adequate locks on your home and take other precautions such as not letting newspapers accumulate in your absence.

Many insurers, fire companies, and civic associations provide window decals to identify rooms occupied by the elderly and children so that these may be evacuated first in the event of an emergency.

3.9 THINGS TO CONSIDER WHEN PURCHASING HOME INSURANCE:

It is also important to calculate the insurance you need to carry. Home insurance reimburses you for the cost per square foot of rebuilding your home and not the market value of the house. Figure out how much it would take to replace the contents of your home. You can record them by taking photographs or videotaping the items. If

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you prefer, you can hire a professional appraiser to help you with the process.

Note that a standard policy has reimbursement limits. Therefore if you own something particularly valuable that exceeds the limit, buy a separate policy for it. You will have to prove its worth with an appraisal. You can also consider buying additional coverage. Damage from fire or lightning may be covered in standard policies but bear in mind that flooding and earthquakes are not. Hurricanes are generally covered but the floods they cause are normally not included. Living in an area prone to disasters will make rebuilding costs to skyrocket. If this is the case, you might want extended replacement coverage which gives you an additional 20 to 25 percent over your policy limit. Weigh the pros and cons of the cash value policy, which give the money to replace your belongings minus depreciation, versus a replacement cost policy, which reimburses you for the current costs for replacing your goods. Take note that replacement cost policy has higher premiums. Get at least three rate quotes since premiums can vary wildly. It is also recommended to check for the financial health of the insurance companies you are considering. Search online for their financial strength ratings. You can also check rates with your car insurer if you own a car as some companies would normally give discounts to customers with multiple policies. Ask if you qualify for a premium discount especially if you have a security system, an upgraded electrical system, or a new plumbing.

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Choose the highest deductible you can safely afford. It can reduce your premiums by as much as 25 percent.

Review your policy and alert your insurance company anytime you make substantial renovations or a pricey purchase.

3.10 STEPS IN CLAIMING HOME INSURANCE.

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The following are the five steps how to prepare and to file your insurance claim:

1. Give the insurance company an immediate notice of your insurance claim. Immediately call the agent about any damages that you think will need a claim.

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2. You should document any damages on your property that you noticed or confirmed. You can use a digital or video camera to capture visual evidence of the damage. Prepare written documentation as well.

3. Repair the damage temporarily if you can. If you noticed a damage, try making immediate repairs because preventing further damage is your responsibility. If youre buying supplies for the repairs, keep the receipts for future reimbursements.

4.

List down all the items that you suspect are missing or damaged. Inspect one room after another and remember every single item that was in there before. If your insurance policy includes replacement coverage on personal items, a whole lot of your personal property must be replaced a new, regardless if the old item cost less than the new one.

5. Be patient in waiting for our claim. If there was a disaster that hit your area and the area is in total wreck, families experiencing more damage will most probably be attended first. Just keep the communication line open between you and your insurance agent.

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CHAPTER 4

4.1 COMPANY PROFILE

The ICICI Ltd. was established in 1955 by the World Bank, the Government of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6,848 companies and 16,851 projects. Lombard Canada Ltd., is a leading insurance management company responsible for providing insurance management services for all of the Lombard group's commercial, personal, and specialized insurance companies. Canadian owned and operated ,Lombard Canada Ltd. has its head office in Toronto and has annual sales in excess of $500 million and is a wholly owned subsidiary of Fairfax Financial Holdings Limited (FFH on the TSF Lombard Canada Ltd. has achieved a reputation for providing solid underwriting performance, diversified books of business and strong capital positions.
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The Joint Venture ICICI Lombard General Insurance Co will be headed by Mr. Sanjiv Kerkar. ICICI would hold about 74 percent stake, while Canadian insurer Lombard would hold the maximum permissible 26 percent and commence business with a start-up capital of Rs.100 crore. ICICl Lombard has plans to sell covers to the corporate clients of ICICl. At the same time it will sell property insurance for ICICI home loan seekers and auto insurance for those availing of car finance.

4.2 Present status of the organization

ICICI Lombard Auto Insurance has been rated highest in customer satisfaction by J.D. Power Asia Pacific in India among 11 auto insurance providers. The company has been conferred the Golden Peacock- Eco Innovation Award of 2009 for weather insurance and the Customer and Brand Loyalty award in the Insurance Sector - Non- Life at the 2nd Loyalty awards, 2009. It was awarded the General Insurance Company of the Year at the 11th Asia Insurance Industry Awards. The company also won the NDTV Profit Business Leadership Award 2007 and was adjudged as the most Customer Responsive Company in the Insurance category at the Economic Times Avaya Global Connect Customer Responsiveness Award 2006. It has the Gold Shield for Excellence in Financial Reporting by the ICAI (Institute of Chartered Accountants of India) for the year ended March 31, 2006.

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4.3 Functional Departments of the Organization Claim Settlement:

Lightning-fast claim settlement is one of the key areas of focus for ICICI Lombard. Our dedicated Relationship Managers, wide spread network across India and presence of 24 *7 call centers assure our customers that we are always on call, day or night. Our tie-up with Cunningham Lindsey, the worlds second largest loss adjustors with its network in 80 locations across India, ensures a surveyor on site in less than 24 hours.

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Rural Initiative:
ICICI Lombard believes in striking the right balance between the commercial and socio-economic aspects of the insurance business. In its Endeavour to offer tailormade products to meet the requirement of the rural population, explore business opportunities in the related segments and build a competitive edge through strong distribution network and product innovation, ICICI Lombard uses Intermediaries like ICICI Banks kiosks, direct selling Agents, state-level tie-ups, ITCs e-Chou pals, NGOs and other micro finance Institutions (MFIs). The rural segment offers immense business opportunities for insurers since it constitutes 50% of the GDP. Growing per capita and disposable income and rising financial awareness among rural masses has opened up new avenues for insurers in this segment.

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Corporate Business:
ICICI Lombard via its CSG segment aims to tap large corporate with high premium potential. The company has emerged as a major player in the corporate segment with a well-balanced portfolio. It has made forays into specialized products that require complex product development and strong underwriting skills. In addition, a strong distribution has enabled it to reach out to over 3,000 corporate. It also offers single point contact through dedicated relationship managers for both sales and customer service.

Bank assurance
The Company has set up a dedicated SBU to cater to banc assurance business managed by dedicated teams for each bank partner across all locations to ensure highest levels of service to the channel and their customers and to provide complete support and value addition to the bank partners. Our banc assurance philosophy emphasizes on complete respect for the partners brand & business model with a clear understanding that the partner owns the customer. The company has tied up with few partners like ABN Amro Bank, ICICI Bank, UTI Bank etc, to ensure complete support and continuous value addition to the partner. The business philosophy behind the banc assurance initiative is to leverage distribution synergies with partners. The channel offers unmatched product suite customized for bank channels and customers.

Retail
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ICICI Lombard aims to tap retail segment through multi-product and multichannel approach to marketing. The company believes that retail segment has immense potential and will drive the companys growth in future. It has presence in all retail categories -- travel, health, home and motor. It has launched a number of innovative products and features in each category like Pay-per-day in Overseas Travel Insurance and floater cover for individual Health Insurance. The key to success in this area is effective market segmentation and targeted product offerings that meet customer needs.

E-channel
ICICI Lombards e-channel initiative has embraced technology with open arms. The effective use of technology platforms has enabled customers to view all their insurance transactions through the web on a real time basis. ICICI Lombards echannel mainly focuses on targeting customers through Internet, intranet (of large corporate and manufacturing companies) and other national level distribution networks. The focus is on targeting customers through the online medium. The model is to develop an integrated and customized product platform with key partners ICICI Direct, ICICI Bank.

4.4 HOME INSURANCE

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ICICI Lombard's Home Insurance policy secures the structure or contents of ones home against natural and man-made disasters. Policy Details Key Benefits

Comprehensive insurance, which covers both structure and / or contents of your home Coverage up to 5 years for structure and contents Cover against Fire and allied perils, Burglary & Theft and Optional cover Terrorism and Additional expenses of rent for accommodation. for alternative

What is not covered

Willful destruction of property. Loss, damage and destruction caused by war, wear and tear etc. Losses if your home has been unoccupied for more than 30 days, without prior notice to the company. Cash, bullion, painting, works of art and antiques.

4.4

CASE

STUDY

ON

ICICI

LOMBARD

GENERAL

INSURANCE COMPANY LIMITED.

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ICICI Lombard General Insurance Company limited, since it received regulatory approvals in 2001, has emerged as the number one player in the insurance sector in India. And all these is attributed to its breakthrough performance in providing a comprehensive product line, instant online policy issuance, simple and fast documentation and fast claims settlement. ICICI Lombard has also implemented exclusive Home Insurance plans which are customized to secure your home from natural and man- made calamities.

Key Benefits:

Digitally signed policy is available 24x7 online, customer can take prints instantly. The hard copy of the policy is couriered the same day (or next day if customer buys after 6 PM) and will reach him/her within 2-3 working days. Avail 15% discount on a 3 years home insurance policy and 25% discount on 5 years policy. Optional covers available - Terrorism and additional expenses of rent for alternative accommodation.

The ICICI Lombard and Home Insurance plan ensures its clients the guarantee of protecting the building structure and its contents. The policy offers its clients the flexibility of choice for buying insurance only for the building structure of your home, or only the contents/possessions or both. The policy covers the
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loss or damage to the structure and contents of your home due to any natural and man made calamities. 1) Fire 2) Riot, strike & malicious damage 3) Explosion & implosion 4) Earthquake, subsidence, landslides and rockslides 5) Lightning, storm, cyclone, tempest, tornado, hurricane, flood & inundation 6) Damage due to impact by vehicles 7) Missile testing operation and Aircraft damage 8) Damage due to bursting and/or overflowing of water tanks, apparatus and pipes 9) Burglary cover (only for contents)

The promotional values included in Home Insurance policy is 15% discount on a 3 years home insurance policy and 25% discount on 5 years policy and provision for Optional Covers for: 1) Loss/ damage to the structure and/or contents of your home due to acts of terrorism. 2) Additional expenses of rent for alternative accommodation with maximum coverage of up to Rs. 1,00,000 for up to 6 months, in cases if your insured building structure is destroyed or damaged by any of the above mentioned peril.

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The ICICI Lombard Home Insurance plan insures the building structure of your home for its reconstruction value i. e. the cost incurred to reconstruct the home if it is damaged and not for its market value such as the cost of land etc. sum insured is calculated by multiplying the built up area of your home with construction rate per sq. feet. The insurance policy for contents/possessions of your home are estimated on market value basis i.e. the current market value of similar items after depreciation, which is although not applicable on jewellery.

The ICICI Lombard Home Insurance policy is not applicable to a few categories of loss or damage due to : 1) Willful destruction of property. 2) Destruction caused by war, wear and tear, atmospheric conditions etc. 3) Losses incurred if your home has been unoccupied for more than 30 days.
4)

Loss of cash, bullion, painting, works of art

The ICICI Lombard Home Insurance Policy has a comprehensive range of covers to protect your home. They are as follows: Fire and Special Perils (Structure and/or Contents) Covers losses to the structure of the house and the contents due to any natural and man-made calamities. The calamities covered are :

Fire
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Lightning Explosion / Implosion Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation Riot, strike ,malicious and Terrorism damage Subsidence and Landslide including Rockslide Bursting and/or overflowing of water tanks, apparatus and pipes Missile testing operations Leakage from automatic sprinkler installations Bush fire Earthquake

CHAPTER 5

5.1 COMPANY PROFILE The Tata group comprises over 90 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. The total revenue of Tata companies, taken together, was $67.4 billion (around Rs319,534 crore) in 2009-10, with 57 per cent of this coming from business
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outside India. Tata companies employ around 395,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 28 publicly listed Tata enterprises and they have a combined market capitalisation of about $97.13 billion (as on March 17, 2011), and a shareholder base of 3.5 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels and Tata Communications. Tata AIG General Insurance Company provides non-life insurance solutions to individuals, groups and corporate houses in India. The company was established in 2001. Tata is one of the oldest and leading business groups of India. Tata Group has had a long association with India's insurance sector being the largest insurance company in India prior to the nationalisation. American International Group, Inc (AIG) is the leading U.S. based international insurance and financial services organization. Tata Sons holds a 74 per cent stake in the company with American International Group Inc (AIG) holding the balance 26 per cent. AIG is the worlds leading international insurance and financial services organisation. The company provides non-life insurance solutions for automobiles, homes, personal accident, travel, energy, marine, property and casualty as well as several specialised financial lines for corporate clients and individuals.
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5.2 HOME INSURANCE

Majority of people would consider that their home is the biggest and most important investment they had made. So, it is only reasonable to insure that very valuable property with Home insurance. Tata AIG realises the need and has designed a variety of home insurance products that cater to everyones home insurance needs. After all, homes are not built every day.

5.3 TYPES OF HOME INSURANCE 1.Instachoice Home Insurance

Tata AIG Instachoice Home Insurance is a do it your self insurance product which allows you to choose and design your own home insurance cover instantly.

Key Features
Easy and Instant, No Documentation Flexible lets you decide the premium that you want depending on the coverage amount you choose Offers a burglary cover for jewellery

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 Covers domestic appliances as old as 8 years making it an instant hit amongst home owners and non-owners alike.

What are the benefits of TATA AIG Instachoice Home Insurance

Fire and Special Perils: Protects home structure as well as contents against fires, earthquakes, floods, lightning, thunderstorms, storms, inundation, cyclones, etc. It also protects against man-made threats like terrorism, riots and strikes

Rent for alternative accommodation: Covers additional rent in case the house is severely damaged and rendered uninhabitable under Fire and allied perils. This has a maximum limit of Rs.30, 000 for 3 months.

Burglary & Theft: Covers Loss or damage to your household contents in the event of Burglary / Theft or Attempted Burglary / Theft. Coverage option available on 1st loss basis. is

Public Liability: Protects your guests or any third party against any damage caused to them or their property in the insureds home.

Baggage Loss: This cover protects Accidental loss/damage/theft anywhere in India of accompanied personal baggage whilst on travel outside municipal limits of city.

Audio & Audio Visual Appliances: This is a Comprehensive cover against loss/
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damage to your Audio/AV appliances at home due to fire and allied perils, Burglary/theft, Accidental external means, Mechanical and electrical breakdown, legal liability.

Breakdown of Domestic Appliances: This cover protects against Mechanical &/or Electrical Breakdown to other domestic appliances at your home.

Personal Accident:This is a Family cover for compensation in case of death or disablement of the insured person due to accidental bodily injury anywhere in world.

Purchase Protection: This covers New Items purchased under Benefits: Fire & Burglary / Theft up to 30 days from the date of purchase.

*In Burglary at First loss, the condition of average is not applied. Therefore it allows you to cover your contents adequately at a reduced premium.

2. Home Secure Supreme

Tata AIGs Home Secure Supreme is a flexible home insurance plan which can be customized for Individual needs. The plan offers you 15 comprehensive coverage options to choose from.

Key Features

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Offers new benefits like purchase protection, medical expenses, temporary resettlement expenses. Totally Customizable: it gives you the flexibility to choose not only from the cover options but also the sum insured as per your need. Jewellery and Valuables are being offered as an all risk cover as a part of this particular plan.

It offers coverage for loss / damage due to the following Fire: Benefits Include: Explosion / Implosion, Aircraft Damage caused by aircraft, Riot, Strike, Malicious Damage cover, Damages due to Impact by rail / road vehicle or animal, Bursting and / or overflowing of water tanks, apparatus and pipes, Missile Testing operations, Leakage from Automatic Sprinkler Installations, Lightning, Loss caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation, Destruction by subsidence of part of the site on which the property stands or landslide, Bush Fire.

Cover

includes:

Building,

Contents,

Rent

for

Alternative

accommodation, covers additional expenses on rent incurred by you in case of loss or damage to the premises caused by an insured peril rendering the premises unfit for occupation and forcing you to shift to an

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alternative accommodation for a maximum period of 30 days, Impact damage by own vehicle

Public Liability: Covers your legal liability as a house owner towards others (third parties) and your domestic helps. Burglary: Provides automatic protection for newly purchased articles against fire and burglary up to 30 days from the date of purchase Purchase Protection: Provides automatic protection for newly purchased articles against fire and burglary up to 30days from the date of purchase. Pedal Cycle: It covers your pedal cycle comprehensively against accidental damages. Additionally it also covers liability towards third party injury and/ or property damage up to Rs.10, 000 only. Plate Glass: Securely fixed plate glass (e.g. windows) is covered against accidental loss or damage resulting into breakage. Baggage: Your accompanied baggage is protected even while you travel. Any accidental loss or damage and theft of personal baggage during the travel is covered anywhere in India. Audio Visual Appliance: It covers Fire, Burglary, Theft, Legal Liability, accidental damages and breakdowns associated with audio and audio visual equipment Domestic Appliance: It covers your domestic appliances like Refrigerator against the risk of unforeseen and sudden mechanical and /or electrical breakdown. Marine: In case you need to relocate to a different city or a different household in the same city, Home Secure will hold your possessions protected against loss or damage during transit in case of an accident to the carrying vehicle or if the entire goods are not delivered.
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Personal Accident: Home Secure provides Personal Accident cover to your entire family on account of death, permanent total or partial disablement and Medical expenses and Ambulance charges up to specified limits related to and arising out of accident. Medical Expense : Hospital expenses due to accidents causing death / PTD. Ambulance Charge: Ambulance charges due to accident. Expenses for Temporary Resettlement: In case your home has been rendered uninhabitable due to fire, Home Secure covers the cost of packing and transportation (up to specified limits) of your household goods to an alternative residence. Money : Dispossession of money withdrawn from a Bank branch or Automated Teller Machine (ATM) on your way back home due to robbery or hold-up.

3.Home Coupon
An on the spot cover for your home that comes with easy documentation.

Key Features:
Fire & Allied Perils includes earthquake & terrorism as per tariff. Burglary on 1st loss - In the event of a claim, any loss up to the SI would be paid in full, regardless of the total contents value at the time of Loss, without applying the under-insurance clause.

What coverage options are offered?

Sr No. Benefit 3 SI (Rs) lacs5 SI (Rs) lacs

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Fire

&

Allied

Perils300,000 &

500,000

including

Earthquake

Terrorism - for Contents 2 Burglary & Theft on 1 st10000 loss - for Contents Final premium incl tax 596 728 10000

4.India Fire - Fire & Special Perils Cover

India Fire Home Insurance provides coverage against fire and some special perils.

Key Features
This policy covers buildings (RCC construction) and your household contents. Covers the following:

Fire Lightning Explosion/Implosion Aircraft Damage Riot, Strike and Malicious damage Impact damage by any Rail/Road, vehicle or animal by direct contact(excluding damage by own vehicle)
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Subsidence and landslide including rockslide Bursting and/or overflowing of Water Tanks, Apparatus and Pipes Missile Testing operations Leakage from Automatic Sprinkler Installations Bush Fire Flood, Storm, Inundation etc. Earthquake

Fixation of sum insured: Building - Cost of reconstruction excluding land value. Building value should be equal to present day cost of reconstruction, while contents should be insured for their market value.

5.4 Claims Procedure

Basis of Claim Settlement In case of Total Loss:

Sum Insured or Market Value whichever is less.

Partial
Reasonable repair costs.

Losses:

Not more than 20% of the total value of contents in respect of a single item. Rateable proportion of loss in case of underinsurance (permitted upto 15%, only for the package policies, not for stand alone Fire policies).
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Contribution clause to operate in case of double insurance.

Other Features

Claims to be notified immediately by any means followed by written intimation within a week. For Burglary/Theft / Jewellery / Baggage/ Cash in transit claims F.I.R. is a must. For Fire benefit auto reinstatement of sum insured will be there unless otherwise opted immediately after occurrence of loss. Cancellation notice on either side would be 15 days. No refund on cancellation in case there is a claim under the policy. Though the pre-underwritten packages give a fixed sum insured, there will be an option to increase the sum insured in case of Fire: Building cover only.

Fire & related danger

Fire Lightning Explosion / Implosion Aircraft Damage Riot, Strike and damage due to mal-intention Damage due to impact by any vehicle or animal by direct contact Subsidence and landslide Bursting and / or overflowing of Water Tanks, Apparatus and Pipes Missile testing operation Leakage from automatic Sprinkler installations
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Bush fire Flood, Storm, Inundation Earthquake & Terrorism (as an add-on cover by paying extra premium) Rent for alternate accommodation Can be opted only if Fire and allied perils cover for building is taken) Provides a shelter in case of damage to the house due to Fire / other related risks The house post damage must be rendered as completely inhabitable A maximum sum of Rs. 30,000 for upto 3 months. CHAPTER 6 COMPARITIVE STUDY

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ICICI LOMBARD Types of polices for home insurance 1. Basic policy. 2. Broad policy. 3. Special policy. 4. Renters insurance 5. Premium homeowners policy 6. Condominium policy 7. Older houses from homeowner from home owners from homeowners

TATA AIG Types of polices for home insurance 1. Instachoice insurance 2. Home secure supreme 3. Home coupon
4.

home

Indian fire-fire and perils house

1)Instachoice home insurance Feature: Easy and instant, no

HO1.Basic form homeowner policy. It covers the home against 11 listed perils which includes fire or lightning, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion riot or civil commotion, glass breakage, Exceptions earthquakes. HO2. Broad form homeowner policy. A more advanced form that smoke, include volcanic floods, eruption, and personal liability.

documentation Flexible lets you decide the premium that u want depending upon coverage amount you choose. Offers burglary covers for jewellary Covers domestic appliance and old an 8years making instant hit amongst home owners and nonowners alike.

provides coverage on a home 2)Home secure supreme: against 17 listed perils Feature: ( including 11 of HO1policy) HO3.SPECIAL Offers new befits like Page | 72 purchase potential medical expenses FORM Features :

CHAPTER 7
CONCLUSION Striving for enjoying this life people constantly take care of the health of their dearest and nearest and sure of their own. Still health is sometimes not enough for receiving full satisfaction from life. Thus nice clothes, beautiful homes and other properties are of great value as well. In order to protect our homes and property we purchase the most secure locks and advanced security devices. However tribulations come depending not on our wish. At present property insurance is the main sphere of services offered by insurance companies.

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It is now that not only rich people are interested in having house insurance. Those with tight budgets also come to a conclusion that their houses and property that were gained by hard and persistent work should be covered by insurance. Thus many insurance companies taking into account such tight budgets work out special house insurance policy like cheap house insurance programs making them affordable for everyone. However there is something to be realized by those who are trying to save on house insurance. The thing is that house insurance should be taken rather like reliable money investment than like wasting money. Homeowners insurance typically covers the dwelling (the structure), personal property and contents, and some forms of personal liability for unintentional acts arising out of the non-business, non-automobile activities of the insured and members of that insureds household. Insurance works by pooling risks. Because the number of insured individuals is so large, insurance companies can use statistical analysis to project what their actual losses will be within the given class. This follows the insurance companies to operate profitably and at the same time pay for claims that may arise. Underwriting is the process of evaluating the risk to be insured. This is done by the insurer when determining how likely it is that the loss will occur, how much the loss could be and then using this information to determine how much you should pay to insure against the risk. The insurance contract is a legal document that spells out the coverage, features, conditions and limitations of an insurance policy.
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The reason to buy long term care insurance is to protect your assets in case you need to pay for assisted living, home care or a nursing home stay.

BIBLIOGRAPY

BOOKS 1.General Insurance Insurance institute of India publication 2.Insurance (principle and practice), MN Mishra SITES
1. 2. 3.

www.google.com www.wikipedia.com www.tataaiggeneralinsurance.com

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4.

www.icicilombard.com

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