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Project on Motor Policy With Reference To New India Assurance Company Ltd

CHAPTER I
INTRODUCTION
Insurance is a specialized type of a contract. It is agreement between two parties. One party is insurance company who takes the insurance of other party known as insured party. Premium is the consideration of the contract of insurance. The insurer issues document in writing in the name of the insured which is called policy. The insurer has to pay certain amount of the money to the insured, if uncertain event takes place after taking the insurance and before the expire of the policy. Insurance is a method of spreading and transferring of risk. Losses of unfortunate people are shared by many people who are exposed to the same type of risk. Loss of assets for any reason deprives the owner of the expected benefit. Thus insurance is a mechanism that helps to reduce the adverse consequences due to the loss of assets. The new India assurance company to be set up by an Indian was Indian Mercantile assurance Co. Ltd., which was established in 1907. There emerged many a assurance player on the Indian scene thereafter .The general assurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The post-nationalization general assurance business was undertaken by the assurance Corporation of India (GIC) and its 3 subsidiaries

Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured. Motor insurance policies cover against any loss or damage caused to the vehicle or its accessories due to the following natural and manmade calamities. Motor insurance provides compulsory personal accident cover for individual owners of the vehicle while driving. One can also opt for a personal accident cover for passengers and third party legal liability. 1.1 OBJECTIVES OF THE STUDY i) To determine and analyze the Market Potential of the New India Assurance Co. Ltd. ii) To determine whether the customers are satisfied with the Motor policy of the company. iii) To know the customer awareness regarding the New India Assurance Co. Ltd and its products. iv)To study and determine the competitor position in the market. v) To know the future plans of the people for buying the policies. 1.2 REVIEW OF LITERATURES SUJATA DEV (2009): The report on Indian Insurance Industry Forecast (2007-2009) recently published by RNCOS it can be concluded that the market of life insurance in India is likely to reach Rs.1684 billion by the next year. The major factors that determine the status of life insurance industry are:

changing consumer behavior


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growth rate of GDP changing socio economy demography natural calamity

In April 2007, general insurance players were able to manage an increase of16% whereas new businesses made a remarkable progress with an expansion by 49%. A survey conducted by Insurance Regulatory & Development Authority reveals the name of the major organizations and role played by them in shaping the present status of Indian life insurance industry. The major profit making industries in this regard are:

SBI Life ICICI Prudential LIC

However, agencies like Bajaj Allianz, ING Vysya and Reliance Life were unable to contribute much to the profit making. Reports published by Business Standard on 14th June 2007 showed that LIC is at the top of the pyramid by selling almost 15, 89,684 of its policies. There has been a rise of 57% in LIC`s new premium with a value of Rs.2134 crore.

JACK BURKE (Insurance marketing, July 2004): CROSS SELLING emphasis that people depend on insurance agents or brokers for the selection of and buying of policies related to life, health, automobiles etc. but it has been found that most agents or brokers specialize in selling policies related only to particular field. The statistics showed that the average American
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had 7.2 insurance policies i.e., selling more than one policy to their client. This can be specified as cross selling or multiline marketing. More policies per client mean lower acquisition cost, higher client retention and greater profit.

WALTER DE OUDE AND RAJAGOPALAN KRISHNAMURTHY (health insurance, Feb 2006): The health insurance industry in India & its growing potential emphasis that ensuring public health is the principal responsibility lay down by the Indian constitution. The central government provides about 15% of the funding needs mostly for national health programs. The family planning and healthcare initiatives of the government have so far effective in reducing birthrates and improving mortality rates. According to the WHO report published in 2002 India ranked 13 th from the bottom in terms of public spending on health. Although Indias public spending is low, overall health spending improved due to higher private spending. Currently less than 15% of the Indian population has some kind of health insurance cover. 1.3 HYPOTHESIS i) The new technologies adopted by the New India Assurance Co. Ltd acts as a tool for improving the performance of the company. ii) It has reduced the role of other Private sector insurance companys & made the Motor policy which is effective to the customers. 1.4 RESEARCH METHODOLOGY

The secondary data are obtained mostly form books, journals, through website officials reports periodicals brought by the Government of India in addition to these; efforts would be made to collect as much information from the internet about the Insurance Industries in India.

1.5 LIMITATION OF STUDY Though this study is purely explorative in nature, it is brought with a number of limitations. The most outstanding among them could be listed as follows. i) Adequate secondary data are not available regarding financial aspects of New India Assurance Co. Ltd. ii) This study concentrates more on the role and performance of New India Assurance Co. Ltd without considering the role played by the company in life insurance sector. iii) This study does not analyze the problems faced by the customers. Study of primary data is not available

CHAPTER II
MEANING OF INSURANCE
Insurance is a specialized type of a contract. It is agreement between two parties. One party is insurance company who takes the insurance of other party known as insured party. Premium is the consideration of the contract of insurance. The insurer issues document in writing in the name of the insured which is called policy. The insurer has to pay certain amount of the money to the insured, if uncertain event takes place after taking the insurance and before the expire of the policy. In case of life insurance the claims is certain because the insurer has to pay the policy amount to the insured together bonus at maturity. However, in case of general insurance the claim is not certain. The insured party can claim he compensation only if uncertain event takes place and the insured suffers any loss or damage in monetary terms. Insurance is a method of spreading and transferring of risk. Losses of unfortunate people are shared by many people who are exposed to the same type of risk. Loss of assets for any reason deprives the owner of the expected benefit. Thus insurance is a mechanism that helps to reduce the adverse consequences due to the loss of assets.

Several insurances provide comprehensive coverage with affordable premiums. Premiums are periodical payment and different insurers offer diverse premium options. The periodical insurance premiums are calculated according to the total insurance amount. Mainly insurance is used as an effective tool of risk management as quantified risks of different volumes can be insured.

2.1 HISTORY A brief history of the Insurance sector the business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public .In 1956-245 Indian and foreign insurers and provident societies were taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs.5crores from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
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1907: The Indian Mercantile Insurance Ltd. Set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency Margins and Tariff advisory committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972nationalized the General insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd, and the United India Insurance Company Ltd. GIC incorporated as a company. 2.2 ORIGIN OF INSURANCE

Whenever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risk may be certain events like death, pension, retirement or uncertain events like theft, fire, accident; etc .Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. It comes under service sector and while marketing this service due care is taken in quality product and customer satisfaction. The main function of the Insurance is to provide protection against the possible chances of generating losses. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a

liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. 2.3 NEED FOR INSURANCE The business of insurance is related to the protection of the economic value of assets. Every asset has value. The asset would have been created through the efforts of the owner, in the expectation that, either through the income generated there from or some other output, some of his needs would be met. In the case of a factory or a cow, the production is sold and income generated. In the case of a motorcar, it provides comfort and convenience in transportation. There is no direct income. There is normally expected life time for the asset during which time it is expected to perform. The owner, aware of this, can so manage his affairs that by the end of that life time, a substitute is made available to ensure that the value or income is not lost. However, if the assert gets lost earlier, being destroyed or made non functional, through an accident or other unfortunate event, the owner and those deriving benefits there from suffer. Insurance is mechanism that helps to reduce such adverse consequences. Assets are insured, because they are likely to be destroyed or made non-functional through an accidental occurrence. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are perils. The damage that these perils may cause the asset, is the risk. A human life is also an income generating asset. This asset also can be lost through unexpectedly early death or made non-functional through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of ones retirement, when it could
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be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, insurance is necessary to help those dependent on the income. In the case of a human being, he may have made arrangements for his needs after his retirement. Those would have been made on the basis of some expectations like he may live for another 15 years, or that his children will look after him. If any, of these expectations do not become true, the original arrangement would become inadequate and there could be difficulties. Living too long can be as much a problem as dying too young. These are risks which need to be safeguarded against. Insurance takes care. The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run the risk of the importers in the other country defaulting as well as losses due to sudden changes in currency exchange rates, economic policies or political disturbances. These risks are now insured. Doctors run the risk of being charged with negligence and subsequent liability for damages. The amounts in question can be fairly large, beyond the capacity of individuals to bear. These are insured. Thus, insurance is extended to intangibles. In some countries, the voice of a singer or the legs of a dancer may be insured; even through the advantages of spread may not be available in these cases. The purpose of insurance is to safeguard against such misfortunes by making good the losses of the unfortunate few, through the help of the fortunate many, who were exposed to the same risk but saved from the misfortune. Thus the essence of insurance is to share losses and substitute certainty by uncertainty.

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2.4 FUNDAMENTAL PRINCIPLES OF INSURANCE Insurance is a specialized type of contract. An insurance contract is also a commercial contract. In India, all contracts are governed by the India Contract Act, 1872. Under this act, an agreement enforced by law is a contract. Such an agreement must be entered into by two or more parties with intention of creating a legally binding relationship. There are additional principles in that contract. The following are the principles of insurances contract: INSURABLE INTEREST Insurable interest means that the person opting for insurance must have pecuniary interest in the property he is going to get insured and will suffer financial loss on the occurrence of the insured event. This is one of the essential requirements of any insurance contract. Therefore, a person can go for insurance of only those properties where he stands to benefit by the safety of the property, and will suffer loss, damage, injury if any harm takes place to such property.
PRINCIPLE OF UTMOST GOOD FAITH

Like in other contracts, the insurance contract must be based on good faith. If the insurance contract is obtained by way of fraud or misrepresentation it is void. PRINCIPLE OF INDEMNITY The insurance contract should always be a contract of indemnity only and nothing more. According to this principle, the insurance contract should be such that in case of loss due to the eventualities mentioned in the contract, the insured should be neither better off nor worse off after receiving the insured amount. The main
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object of this principle is to ensure that the insured is not able to use this contract for speculation or gambling. PRINCIPLE OF SUBROGATION The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire and marine insurance. According to it, when an insured has received full indemnity in respect of his loss, all rights and remedies which he has against third person will pass on to the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he has paid under the policy. It must be clarified here that the insurer's right of subrogation arises only when he has paid for the loss for which he is liable under the policy and this right extend only to the rights and remedies available to the insured in respect of the thing to which the contract of insurance relates.
PRINCIPLE OF CONTRIBUTION

Where there are two or more insurance on one risk, the principle of contribution comes into play. The aim of contribution is to distribute the actual amount of loss among the different insurers who are liable for the same risk under different policies in respect of the same subject matter. Any one insurer may pay to the insured the full amount of the loss covered by the policy and then become entitled to contribution from his co-insurers in proportion to the amount which each has undertaken to pay in case of loss of the same subject-matter. PRINCIPLE OF LOSS MINIMIZATION According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a
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fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to control and reduce the losses in such a scenario. The insured must not neglect and behave irresponsibly during such events just because the property is insured. Hence it is a responsibility of the insured to protect his insured property and avoid further losses.

PRINCIPLE OF CAUSA PROXIMA Principle of Causa Proxima (a Latin phrase), or in simple English words, the Principle of Proximate (i.e. Nearest) Cause, means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. The principle states that to find out whether the insurer is liable for the loss or not, the proximate (closest) and not the remote (farest) must be looked into. FOR EXAMPLE: - A cargo ship's base was punctured due to rats and so sea water entered and cargo was damaged. Here there are two causes for the damage of the cargo ship - (i) The cargo ship getting punctured because of rats, and (ii) The sea water entering ship through puncture. The risk of sea water is insured but the first cause is not. The nearest cause of damage is sea water which is insured and therefore the insurer must pay the compensation. However, in case of life insurance, the principle of Causa Proxima does not apply. Whatever may be the reason of death (whether a natural death or an unnatural death) the insurer is liable to pay the amount of insurance
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2.5 INSURANCE INDUSTRY CLASSIFICATION

1. LIFE INSURANCE

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Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In the US, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. 2. GENERAL INSURANCE Also known as non-life insurance, general insurance is normally meant for a shortterm period of twelve months or less. General insurance means managing risk against financial loss arising due to fire, marine or miscellaneous events as a result of
contingencies, which may or may not occur. Recently, longer-term insurance agreements

have made an entry into the business of general insurance but their term does not exceed five years. General insurance can be classified as follows:
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Fire Insurance Fire insurance provides protection against damage to property caused by accidents due to fire, lightening or explosion, whereby the explosion is caused by boilers not being used for industrial purposes. Fire insurance is a contract under which the insurer in return for a consideration (premium) agrees to indemnify the insured for the financial loss which the latter may suffer due to destruction of or damage to property or goods, caused by fire, during a specified period. The contract specifies the maximum amount, agreed to by the parties at the time of the contract, which the insured can claim in case of loss. This amount is not , however , the measure of the loss. The loss can be ascertained only after the fire has occurred. The insurer is liable to make good the actual amount of loss not exceeding the maximum amount fixed under the policy. A fire insurance policy cannot be assigned without the permission of the insurer because the insured must have insurable interest in the property at the time of contract as well as at the time of loss. The insurable interest in goods may arise out on account of (i) ownership, (ii) possession, or (iii) contract. A person with a limited interest in a property or goods may insure them to cover not only his own interest but also the interest of others in them. Marine Insurance Marine insurance basically covers three risk areas, namely, hull, cargo and freight. The risks which these areas are exposed to are collectively known as "Perils of the Sea". These perils include theft, fire, collision etc. Marine Cargo: Marine cargo policy provides protection to the goods loaded on a ship against all perils between the departure and arrival warehouse. Therefore, marine cargo covers carriage of
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goods by sea as well as transportation of goods by land. Marine Hull: Marine hull policy provides protection against damage to ship caused due to the perils of the sea. Marine hull policy covers three-fourth of the liability of the hull owner (shipowner) against loss due to collisions at sea. The remaining 1/4th of the liability is looked after by associations formed by ship-owners for the purpose (P and I clubs). Miscellaneous As per the Insurance Act, all types of general insurance other than fire and marine insurance are covered under miscellaneous insurance. Some of the examples of general insurance are motor insurance, theft insurance, health insurance, personal accident insurance, money insurance, engineering insurance etc. Miscellaneous Insurance refers to contracts of insurance other than those of Life, Fire and Marine insurance. It covers a variety of risks, the chief of which are:Personal Accident insurance: - Personal Accident insurance is insurance for individuals or groups of persons against any personal accident or illness. The risk insured is the bodily injury resulting solely and directly from accident caused by violent, external and visible means. In India this type of insurance is done by the General Insurance Corporation. A contract of personal accident insurance is not a contract of indemnity and the insurer has to pay a fixed sum of money on the death or total disablement of the insured or provide medical benefits for recovery from the injury. If risks against certain specified diseases are also covered, the policy is known as 'Personal Accident and Sickness Insurance. Motor Vehicle Insurance: - under it, a personal or commercial vehicle is subjected to combined insurance against the risks of :- (i) loss or damage to the motor vehicle and its accessories on account of accident or theft; (ii) death of or
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injury to the owner or passenger of the vehicle due to accident; (iii) damages payable to third parties by the owner of the vehicle for accident. A comprehensive insurance policy may be taken to cover all these risks. Insurance against the first two types of risks is optional. But every owner of motor vehicle is required to take out an insurance policy to cover the third party risks under the Motor Vehicles Act, 1956. Such a policy is known as 'third party insurance or liability insurance'. Under such a policy, the third party who has suffered any loss can sue the insurer directly even though he was not a party to the contract of insurance. This policy provides insurance cover to owners of the vehicle, financiers or lessee, who have insurable interest in a motor vehicle. Fidelity Insurance: - Under it, the insurer undertakes to compensate the insured i.e. the employers against the losses suffered by him due to the employees. The losses may be due to fraud, dishonesty, and misappropriation of funds, goods or damages to property caused by the employees. In order to avail the protection under it, the employer is required to provide all material facts about their employees to the insurer and also, notify all changes in the condition of their service. Credit Insurance: - Credit Insurance is a policy taken to cover the loss which may arise due to bad debts or non-payment of dues by the debtors. It provides protection to businessmen, who sell goods on credit terms while substantially reducing the overall risk of exposure to non-payment. It protects them against losses arising out of insolvency of their debtors. It thus enables a business to take advantage of peak and cyclical selling periods and to safely expand into new product lines or territories.

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Travel insurance: - Travel insurance provides protection cover to all those individuals travelling outside India against risks such as loss of baggage, travel related accidents including injuries, illnesses and medical emergencies requiring hospitalization treatment. In India, this insurance policy has become popular among International travelers. 2.6 FOUR IS OF INSURANCE SERVICE The 4 Is refers to the different dimensions/ characteristics of any service. Unlike pure product, services have its own characteristics and its related problems. So the service provider needs to deal with these problems accordingly. The service provider has to design different strategies according the varying feature of the service. These 4 Is not only represent the characteristics of different services but also the problems and advantages attached to it. These 4 Is can be broadly classified as: Intangibility

Insurance is a guarantee against risk and neither the risk nor the guarantee is tangible. Hence, insurance rightly come under services, which are intangible .Efforts have been made by the insurance companies to make insurance tangible to some extent by including letters and forms. Inconsistency

Service quality is often inconsistent. This is because service personnel have different capabilities, which vary in performance from day to day. This problem of inconsistency in service quality can be reduced through standardization, training and mechanization.
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Inseparability

Services are produced and consumed simultaneously. Consumers cannot and do not separate the deliverer of the service from the service itself. Interaction between consumer and the service provider varies based on whether consumer must be physically present to receive the services. Inventory

No inventory can be maintained for services. Inventory carrying costs are more subjective and lead to idle production capacity. When the service is available but there is no demand, cost rises as, cost of paying the people and overhead remains constant even though the people are not required to provide services due to lack of demand. 2.7 ADVANTAGES & DISADVANTAGES OF INSURANCE ADVANTAGES

REASONABLE PROFIT

The businessmen can earn a reasonable profit for their businesses. The insurance can help them to earn the same rate of profit if their business fails to generate income.

SENSE OF SECURITY

There are many chances of losses in a business. But due to insurance, the risk of losses is transferred to insurance company and it gives the sense of security to businessman.
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EMPLOYMENT INCREASE

The insurance companies provided the jobs to thousands of people. In this way the problem of unemployment is reduced.

PROTECTION OF PROPERTY

Due to insurance the personal and business property is protected from natural losses such as accident, fire, etc.

SOLVE THE SOCIAL PROBLEM

Insurance is useful device for solving the social problems. In cash of death provides finance to his family compensation is available to overcome the industrial injuries and road accident.

FAVORABLE BALANCE OF PAYMENT

The insurance of business is an invisible export and it provides sufficient contribution toward the balance of payment

EQUITABLE PREMIUM

The large policy holders provide large funds and small policy holders pay less money in common funds. In the way the amount of premium becomes equitable.

RESEARCH FACILITIES

The insurance companies can conduct research about the rate of accidents, death and losses faced by business units.
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LOW PRICE

The risk of loss is covered by the insurance policy. In the way insurance companies help the business to sell their products as low prices.

SPREAD OF RISK

A large number of persons get marine, fire, life insurance policies and pay premiums to the insurance companies whenever a loss occurs, it is compensated out of the funds of the insurers. The loss is spread among a large number of policy holders.

PROMOTES ECONOMIC GROWTH

Insurance contributes to the efficiency of the business and promotes economic growth and development.

GIVES SENSE OF SECURITY

At every moment there is a chance of loss in business. Due to insurance risk is a transferred to the insurance company and gives the sense of security to businessman.

PROMOTES BUSINESS COMPETITION

Insurance also protects the small industrial units and also provides credit facility. So competition with the big firms increase which is very useful the customer. DISADVANTAGES

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Term insurance provides coverage only for a limited period of time, although some term policies can be renewed indefinitely. Premium rates are guaranteed only until the end of the term. Depending on the policy, premiums may be level for a period of 1, 5, 10, 15, 20, 25, or 30 years and then cease without any renewal option, or offer continual renewals at a higher premium rate.

Deteriorating health can trap you in a policy with rapidly increasing premiums.

CHAPTER III
MOTOR INSURANCE - AN ANALYSIS

Vehicle insurance (also known as auto insurance, GAP insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree vehicle insurance may
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additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions. Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobile or its parts due to natural and man-made calamities. It provides accident cover for individual owners of the vehicle while driving and also for passengers and third party legal liability. There are certain general insurance companies who also offer online insurance service for the vehicle. Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their customers instant auto quotes. Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurance in India can be accidental, theft claims or third party claims. Certain documents are required for claiming Auto Insurance in India, like duly signed claim form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy. 3.1 NEED FOR MOTOR INSURANCE We need car insurance because its mandatory its the law. For any vehicle to drive on Indian roads, it must have a valid insurance policy that at a minimum covers the cost of damage that you might cause to other people or vehicles. Rather than have to pay from our own pocket, if we have a valid car insurance policy, the insurer will assume the liability, as long as the damage is covered under the terms of the insurance contract and there is no case of fraud.

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Situations where a car insurance policy can cover costs are damages arising from an accident, theft, fire and any natural calamities like flood, earthquake, or cyclone. Car insurance policies are valid only for a year and need to be renewed annually. Even though the law requires every car to have a valid policy, the reality is that there are still lacs of vehicles in India that are not insured. Even the cost of repairs would be exorbitant. In case of hospitalization, the cost can even go up. It would be a great burden for an individual to bear his loss and hence the insurance company can indemnify against such losses and the financial liability. This is because people want to save money by not paying insurance and the policing system to check if every car is insured is not perfect. Nevertheless, its worth spending a few thousand rupees to get car insurance, so that we dont put our self under any out of pocket risk if we are in the unfortunate situation of an accident or injury. 3.2 IMPORTANCE OF MOTOR INSURANCE Just as buying car is an inescapable process, getting a motor insurance India plan is crucial too. We definitely need one to ensure absolute security for our car and timely financial assistance during emergencies. However, it is important to make sure that the insurance comes from the right source. Comparing a lot of insurance quotes online will certainly help us in this respect. The motor insurance plan is an obligation to all car owners irrespective of the type and age of our vehicle. These plans are intended towards ensuring security to our car under various emergency situations. These plans are widely available online these days. Comparing quotes is the best way to make sure you reach to the most trusted company in India.

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These days, people are leading a busy life. They have to accomplish multiple tasks in a day and the ever increasing responsibilities related to family, work and society have left them with no time. They are buying cars to save time during transportation and feel the comfort while moving around on road. Just as buying car is inescapable, a motor insurance plan too is an obligation. With rapid increase in the number of accidents on road and theft of cars, it has become a compulsion for motor owners to buy a car A Car Insurance as we all know is an arrangement between the Insurer and the Vehicle Owner wherein, the insurer provides coverage against any financial loss happening because of damage to the car. This is applicable in situations where the damage has been caused either through an accident or because of any natural calamity or any liability that could result as a part of accident or theft. Driving a vehicle at the time of stress is seriously not recommended. Nobody even drives at the time of stress. Here comes the role of insurance company and they take care of your needs in the perfect manner. To be benefited by such plans we need to contact the concerned issuer and also you need to understand the steps involved in the plans. Theyll be educating us on some of the finer aspects that are very much associated with any Auto insurance plans. Theyll clear your concept and make you understand it importance in perfect manner. If we will pay attention to the history of Automobile insurance and compare it with the present day, then we will understand that number of people has been increased manifold having auto insurance. It very much suggests that people have understood the importance of auto insurance plan.

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One phenomenon that has been very clearly noticed is increase in vehicles numbers on the road. That surely demands extra attention, and also drivers need to be highly cautious so that we can reach safely. Single mistake can cost our life or some serious damage. It could be very much disastrous for both people in the car as well as for our car. We might be lucky but chances of your car to be lucky are very less. Then its just the nice insurance plan that can rescue us.

3.3 MOTOR VEHICLE ACT The motor vehicle act was first introduced in 1939 and was revamped in 1988. According to the new Act all motor vehicles that ply in public places are to be compulsorily insured. The Act covers the following liabilities: 1. Any liability that arises in respect of damage or bodily injury to any person including the owner of the vehicle or the authorized person in the carriage. 2. Any liability that is insured in respect of damage to any property of a third party. 3. Liability incurred in respect of the death or bodily injury of any passenger of a public service vehicle. 4. Liability that arises under the Workmens Competition Act, in respect of injury or death of:
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Workers carried in a goods vehicle. Conductor or ticket examiner. A paid driver of the vehicle. 5. Liability for bodily injury or death of passengers who are carried for reward or hire by reason of a contract of employment. 6. The policy should carry a NO FAULT liability limited to a sum assured rs 50,000 in case of death rs 25,000 in case of permanent disability and rs 6,000 in case of damage to any property.

3.4 TYPES OF MOTOR INSURANCE The types of motor insurance are usually two types i.e. Third Party Liability Cover & Comprehensive Cover policy which are described below: 1. Third Party Liability: As the name suggests it covers you against any legal liability resulting from accident of your vehicle. The coverage includes death, injury or property damage to third party. This cover does not include damage to the vehicle. A Third Party Liability cover is legally mandatory in India under the Motor Vehicles Act.

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Coverage's in a Third Party Liability Policy

General Exclusions

Liability is covered for an unlimited amount with respect to death or injury and damage to third party property for up to Rs.7.5 lakhs Damage to your personal property under commercial and private car and up to Rs.1 lakh for two wheelers. Legal protection for death or injury claims Legal protection for damage to from third parties, including occupants of your third party property vehicle Personal accident benefits for you, your paid driver and occupants of your vehicle Protection of your legal liability towards your paid driver

Legal costs and expenses

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2. Comprehensive Cover Policy: Comprehensive cover is designed to offer protection to you and your vehicle. A typical comprehensive cover comprises of- firstly, damage to your vehicle, i.e., any loss or damage caused to your vehicle or its accessories due to natural and manmade calamities as defined in the scope of coverage; Secondly, a third party legal liability cover and lastly; A personal accident cover to driver (owner) of the vehicle for up to Rs.2 lakhs for a premium of Rs.100.

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Coverage's in a Comprehensive Policy

General Exclusions

Accidents & external damage

Wear & tear, depreciation, mechanical or electrical breakdown

Damage due to Fire & Driving without valid driving license explosion, Storm and Flood Burglary / Theft Damage in Transit Damaged caused consequential loss A voluntary excess (if opted)

Loss due to vehicle being driven by a Malicious act including Riots person under the influence of alcohol & strikes or drugs at the time of the loss Natural calamities like Earthquake

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3.5 BENEFITS OF MOTOR INSURANCE It is important to get motor insurance India. This will works towards protecting our car from all kinds of perils. The motor insurance facility is also available these days. We can get the cheapest car insurance plan via comparing quotes. Motor insurance is extensively known as vehicle or motor assurance. It is projected towards the repayment of expenditures sustained by the insured individual towards the following: Repairs Theft Accidents Normal wear and tear Emergencies Many other problems KEY BENEFITS OF CAR INSURANCE Car insurance offers multiple benefits:

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Coverage against loss of or damage to the vehicle insured Coverage against loss or damage to your vehicle caused by Theft Fire, Explosion, Self Ignition, Lightning Riots, Strikes or act of terrorism Any Natural Calamity Liability to Third Parties, arising out of an Injury or Death of a third party and Property Damage Personal Accident Cover For Driver. 3.6 VEHICLE CLASSIFICATION Two of the most important factors that go into determining the underwriting risk on motorized vehicles are: performance capability and retail cost. The most commonly available providers of auto insurance have underwriting restrictions against vehicles that are either designed to be capable of higher speeds and performance levels, or vehicles that retail above a certain dollar amount. Vehicles that are commonly considered luxury automobiles usually carry more expensive physical damage premiums because they are more expensive to replace. Vehicles that can be classified as high performance autos will carry higher premiums generally because there is greater opportunity for risky driving behavior. Motorcycle insurance may carry lower property-damage premiums because the risk of damage to other vehicles is minimal, yet have higher liability or personal33

injury premiums, because motorcycle riders face different physical risks while on the road. Risk classification on automobiles also takes into account the statistical analysis of reported theft, accidents, and mechanical malfunction on every given year, make, and model of auto.

3.7 COMPREHENSIVE MOTOR INSURANCE COVER This type of insurance covers all the risks covered in the Motor Vehicles Act (as above), plus loss or damage caused to the vehicle due to:

Accident Fire, Explosion, self-ignition, lightning Burglary, house-breaking, theft Riots & strikes Earthquakes Flood, typhoon, hurricane, storm, cyclones Malicious acts Terrorism Transit by rail/road. air, waterways

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Also included is the Towing charge (up to Rs.1, 500/- for private vehicles and Rs.2, 500/- for commercial vehicles) incurred due to accident to the vehicle. Exclusions to the Comprehensive Insurance Cover this insurance does not cover loss or damage caused due to: (a) Driver being under intoxication (b) Vehicle being driven by a person not holding an effective, valid license. It also does not cover: (a) Damage to tyres (unless the vehicle is also damaged).

(b) Wear & tear, mechanical breakdown 3.8 SELECTION OF SUM INSURED The sum insured of a vehicle in a Motor Policy is referred to as the I.D.V., which stands for Insured's declared Value. In case of theft of vehicle or if the vehicle is totally damaged and beyond repairs in an accident, the claim amount payable will be determined on the basis of the IDV The IDV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the brand and model of the vehicle proposed for insurance at the commencement of insurance / renewal and adjusted for depreciation as per schedule. IDV of vehicle which is beyond 5 years of age and of obsolete models of the vehicles (i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between insurers and insured.
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PREMIUM CHARGES Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company, in accordance with a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages. When the premium is not mandated by the government, it is usually derived from the calculations of an actuary, based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims. Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven). Factors Affecting Car Insurance Premium in India Cars and two wheelers have become a necessity in todays lifestyle. It has multiple utility. It can be used for business which you have set up after years of hard work. Therefore it is important to make an informed choice when you are buying one. This section deals with the information you need regarding vehicle insurance. It helps you choose the car insurance that is just perfect for you. It provides tips which can be referred to while buying low cost car insurance. At times car insurance can be confusing and difficult to understand. One has to follow certain guidelines while buying an insurance policy. Always shop around for the lowest car insurance quote. If you are unable to find one, then use our state

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of the art comparing system. Our Comparison system gives you the best way to shop for cheapest car insurance. There are innumerable car insurances available in the market with different cost and benefits. But how do you figure out which is the most suitable one for you. Well it all depends on your requirements. What all you wish to cover under the benefit? It is advisable to go for a policy which covers almost every aspect that might incur loss of a huge sum. There are many other factors which help in determining the exact insurance that youre car needs and the premium you have to pay. Let us view what these factors are, that determine the insurance needs and the premium. 1. Car information: Make of the Car like Hyundai, Mercedes, Honda, etc. Class of the car like SUV, Sedan, Family car, etc. Model of the car like Escort, Fiesta, Fusion, Hyundai, 7 series Car by Fuel type such as petrol, diesel, LPG, etc. Year of manufacturing of car Place of registration of car Current showroom price of the car. Number of Kilometers used. Modifications done on a car.
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2. Drivers age and experience affects the premium amount of the car insurance policy. 3. Higher voluntary excess also reduces the Insurance premium. Its the amount the insured volunteers have to pay in case of any claim. 4. Coverage level of the insurance is a major factor in determining the premium you may have to pay out. The more coverage you opt for higher will be the premium and vice versa. Typical Ways to Reduce Your Car Insurance Premium Save big bucks by shopping around for cheap car insurance. Our analysis shows a big gap between the most expensive and cheapest policies in India. However, people often pay according to the amount of cover that they get. Other than shopping around, there are ways to get cheap auto insurance. Following are top 10 ways to get cheap car/auto insurance: 1. Car insurance premium increases depending on the number of luxury gadgets we add to like night vision, ultrasound sensors, etc. 2. Facilities like immediate assistance from the insurer in case of car breakdown will add to your premium cost. 3. The amount of voluntary excesses us to choose the pay also determines the cost of your policy to some extent. This refers to the amount that you will have to pay in case of an accident. Thus, higher the voluntary excess, the lower will be the insurance premium.

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4. Insurance for loss of personal belongings, car locks, etc. adds to the premium cost. 5. A No Claim Bonus can also fetch us with some good amount of discount. These discounts increase as the NCB years increase. Obviously, there is an upper limit to NCB. 6. Nominating drivers or restricting the use of your car to drivers of certain age will also help you reduce the premium. 7. The safety and anti-theft features our car has like airbags, antilock brakes and immobilizers should help us to get a better premium because these are used for safety reasons. 8. Insurance companies may offer discounts to the insured owning more than one policy with the same company. 9. Avoid lapses of the policy; it might disqualify the discounts you otherwise have benefited from. 10.If you have a garage, then start sheltering the car in the garage, such vehicles attract discount. The job is not yet over, we might have managed to get a good reduced premium this year but what happens next year? Well, just remember few things and observe it as measures to control your insurance premiums. Let us list them below. 1. First and foremost drive safe! 2. If we are changing your vehicle, consider a more traditional car. It will not only save you a fortune on fuel but a ton on your insurance premiums!

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3. Dont add younger or inexperienced drivers to your insurance, it may let your premiums go sky high! CLAIMS In the event of an incident giving rise to a claim under the policy, the following steps should be taken: In case of accidental damage to the vehicle: 1. Immediate intimation to the nearest office, which will issue a Claim Form. 2. Claim Form duly filled in to be submitted along with copy of Registration Certificate and driving license of the driver of the vehicle at the time of accident as also estimate of repairs. 3. Vehicle will be surveyed by a Surveyor, appointed by the insurance company, who shall submit his report to the company. In case of a major damage to the vehicle, a spot survey, at the site of accident, would also be arranged by the company. 4. Final bills/cash memos are to be submitted duly signed by the insured. 5. Salvage of the damaged parts may be required to be deposited with the insurance company after approval of the claim. In case of theft of the vehicle: 1. Lodge an F.I.R. with the police immediately. 2. Inform the policy issuing office with a copy of FIR. 3. Submit the Final Police Report as soon as it is received.

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4. Extend full cooperation to the surveyor and/or investigator appointed by the company. 5. After approval of the claim by the company, get the Registration Certificate transferred in the name of the company, hand over the keys of the vehicle, and submit a letter of Subrogation and Indemnity on stamp paper duly notarized. In case of liability claim: 1. Inform insurance company immediately of any incident likely to give rise to liability claim. 2. On receipt of summons from Court, the same should be sent to the company immediately. Claim Form duly filled in along-with copies of Registration Certificate, Diving License, FIR are to be submitted. Fraud Car claims and Auto Insurance Fraud in India Insurance fraud has been in existence since the beginning of insurance as a commercial enterprise. Insurance crimes range in severity, from slightly exaggerating claims to deliberately causing accidents or damages. Insurance fraud poses a significant problem and the government is making efforts to deter such activities. Fraud car claims cost the insurance industry a huge sum every year. About 90 percent of auto insurance fraud is the result of claims padding (which means to add damages, injuries and fictitious passengers to insurance claims). The other 10 percent of insurance fraud comes from organized accident-staging. Innocent victims like private motorists, truck drivers, etc. are targeted by organized
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auto-accident rings. These rings make an accident happen by setting up innocent people for a rear-end collision. Reporting that your car has been stolen when you really hid it in the woods is a good example of false claim. Even if one never files a claim, lying on the application for insurance is still accountable for fraud case. Using forged documents for claiming is also a fraud case. Here are a few tips on how to deal with potential scammers and other enemies of insurance claims: 1. Get a police report even for a minor accident. This makes it difficult for cheaters to file a false claim if they have to deal with the facts of an officers report. 2. It is advisable to keep a camera in your glove box. A picture is worth a thousand lies and can stop a scammer from making fraud claims. 3. Call your own tow truck and avoid business with crooked repair shops. Motor Insurance Claim Is Rejected It is common for motor insurance companies to reject large number of car insurance claims or to reduce their payment values. Generally they would do this, only if they have genuine reasons. Filing claims and receiving the monetary benefits could be a difficult task. There are several factors that can result in claims rejection: 1. The insurer may come to the conclusion that driver was largely or entirely at fault in case the claim is related to theft from the vehicle or of the vehicle itself. The car insurance policy may contain a clause which invalidates the claim.
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2. The insurer may call off the claim if the information provided during application was inaccurate or false. 3. Another reason why a claim may get rejected is that the customer may have taken an insurance policy for a normal private car while it was actually used for commercial purposes. When a customer has a taxi, he should use a policy which is designed for taxis. 4. In case of partial damages, which occur as a result of accidents, a customer often gets claims lesser than demanded because of the depreciation of the vehicle. So, an insurance company puts a car back in the same position as it was prior to the damage of the vehicle. For example, if the engine of a fiveyear old Maruti car is damaged, the insurance company is liable to pay the customer equivalent to five year old engine. If it is replaced with the new one, then the depreciation is deducted as per the tariffs so as to bridge the gap between the cost of the new engine and five-year old engine. 5. If you are unable to provide receipts to backup claims of theft of items from your vehicle. 6. If the value of the car is considerably less than the money you've invested in restoration or enhancements. In any insurance policy your insurer expects you to disclose all the information that could be of importance to them. You are obliged to do this even if the detail is not requested. This process is known as utmost good faith. Insurance companies often use this extremely wooly approach to sharing information to justify rejecting or downscaling claims. If such situations arise with your car insurance claim, there are certain important points to remember:
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The small print of your policy carries a lot of weight, read it thoroughly before, during and after your claim. Keep the accurate records of conversations and correspondence along with all the receipts backing up your claim.

The payout figure announced by your insurance company is not a set in stone. Rather than just accepting the amount on offer you are perfectly entitled and rightful to question the payout. And you can put forward your case for why it should be increased. Road Traffic Accident Claims Accident is inevitable and anyone of us can be its victim. Car accident can be of different nature, it can be due to collision or non collision. An accident can bring life to an end. If you find yourself in such circumstances, do the following. Firstly calm down, secondly get medical attention or help if necessary, thirdly respect the police and their efforts. Do not make an immediate statement to the police or to any insurance company. Let the police know that you will speak to them later after you have calmed down and sought medical attention. Lastly contact a professional to make sure before proceeding with your matter further.

It means that if the party who injured you can show that you were in some way at fault in causing the accident, then your claim can be denied. Speed can be used as contributing factors to deny an injury claim. Even if the other party is more at fault than you, it can jeopardize your claim. Most people are not looking at their speedometer at impact. Therefore, mostly people guess at their speed. At the scene of an accident, you may be confused and shocked, be in pain and you may be
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angry. Mostly you may not be accurate and the insurance company will rely on that statement to evaluate your case. Just avoid making any statement at such a painful time. Visit the closest hospital and get a thorough check up done. Make your statement at a later date mainly after you have had time to calm down and reflect. During this course get in touch with your insurer and confirm the coverage and the claim. Our small statement can reduce our chances of getting the claim processed. Keep the steps mentioned below in mind to avoid complexities in case of car accident. 1. Do not give any statement immediately after the accident. 2. Do not sign anything unless you fully understand what it is. 3. Do not accept the blame if we think it is not our fault. 4. Do not lose our temper. 5. Do not use bad language. 6. Do not behave aggressively. 3.9 CAR INSURANCE GLOSSARY Like all other industries, insurance industry also use specific terms that is often difficult for a layman to understand the meaning. In the following we have tried to simplify the terms as much as possible. REPRESENTATIVE An insurance sales person; Independent representative who works for or on behalf of an insurance company; Broker is an insurance sales person who deals with agents and companies to find the right insurance policy for the customer. Claim 45

An insurance owner requests the insurer to pay the loss covered under a policy. Your claims to your company are "first-party claims. When a person claims against the other person's insurance company it is called "third-party claims." COLLISION COVERAGE Optional insurance covers the damage to our car caused by collision with another car or object. Is frequently required if we have a car loan. COMPREHENSIVE PHYSICAL DAMAGE COVERAGE Optional insurance covering damage to your car caused by something other than a collision or the car rolling over, such as fire, theft, vandalism, flood or hail Is frequently required if you have a car loan. Conditions - These are part of an insurance policy that states the obligations of the insurance owner and those of the insurance company in order for the policy to be in effect. INSURED DECLARED VALUE (IDV) The premium is calculated on the basis of the IDV of the vehicle, which is basically the depreciated value of the vehicle agreed upon by the insurer and the policyholder. The IDV of a vehicle reduces with age. LIABILITY COVERAGE Offers you and any other party involved in an accident a significant sum to cover mainly the medical expenses Normally these figures are divided into three parts, first one represents the maximum your insurance will pay an individual, second represents a cover to all individuals and third one covers damage to another car or property at the time of collision.
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NO CLAIM BONUS (NCB) If we do not make a claim during the policy period, a No Claim Bonus is offered on renewals. Insurers reward policyholders by giving them substantial discounts on the Own Damage Premium. However the NCB is applicable only if the policy is renewed within 90 days of the expiry date of the previous policy. OWN DAMAGE PREMIUM (OD) Payment of OD premium entitles to claim compensation in case of theft or damage of your vehicle due to fire, earthquake, etc. PERSONAL ACCIDENT COVER It covers us not only against Accidental Death and Permanent Total Disablement (PTD), but also against terrorism and acts of terrorism. POLICY PERIODIt is the period when the policy is in force. POLICY HOLDER Owner of the policy PREMIUM The amount a policy holder agrees to pay the insurer for covering the risk.

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PROOF OF LOSS Documents we provide to the insurer to support our request for payment of losses. The company uses these documents to determine whether and how much it will pay. For example written repair estimates from auto body shops, police reports, etc. UNINSURED MOTORIST COVERAGE Uninsured motorist coverage can pay for the injuries caused to us and damage to our property following an accident and the driver at fault does not own a valid insurance. 3.10 CAR INSURANCE OVERVIEW Motor Insurance or vehicle Insurance is all about protecting against financial losses arising out of vehicle usage. With the multifold rise in usage of four wheelers, motor Insurance is also termed as Car Insurance or Auto Insurance. Auto Insurance is one of the most common types of general insurance products. Car Insurance is mandatory by law and protects us and the people riding in our car from any legal claim or penalty made by a third party. Family members who may drive car can also be covered through auto insurance. Car insurance rates have been steadily rising in India over the past few years. Therefore it becomes very important that to get best insurance rates for our car. So that we can compare car insurance quotes to get best deal on our vehicle insurance

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CHAPTER IV
NEW INDIA ASSURANCE COMPANY LTD

INTRODUCTION Assurance industry has always been a growth-oriented industry globally. On the Indian scene too, the assurance industry has always recorded noticeable growth vis--vis other Indian industries. The new India assurance Co. Ltd. was the first general assurance company to be established in India in 1850, which was a wholly British-owned company. The new India assurance company to be set up by an Indian was Indian Mercantile assurance Co. Ltd., which was established in 1907. There emerged many a assurance player on the Indian scene thereafter .The general assurance business was nationalized after the promulgation of General Insurance Business (Nationalization) Act, 1972. The post-nationalization general assurance business was undertaken by the assurance Corporation of India (GIC) and its 3 subsidiaries: 1. New India Assurance Company Limited. 2. United India Insurance Company Limited.
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3. National Insurance Company Limited. Towards the end of 2000, the relation ceased to exist and the four companies are, at present, operating as independent companies. The Life assurance Corporation (AIC) was established on 01.09.1956 and had been the sole corporation to write the life assurance business in India. The Indian assurance industry saw a new sun when the assurance Development Authority invited the applications for registration as assurors in August, 2000. With the liberalization and opening up of the sector to private players, the industry has presented promising prospects for the coming future. The transition has also resulted into introduction of ample opportunities for the professionals including Chartered Accountants. The Indian assurance industry is featured by the attributes: Low market penetration; Ever-growing middle class component in population. Growth of consumer Movement with an increasing demand for better assurance products Inadequate application of information technology for business .Adequate Fillip from the Government in the form of tax incentives to the assured, etc. The industry formations need to keep vigil on these characteristics of the Indian market and formulate their strategies to entail maximum contribution to the output of the sector. The Indian life and non-life assurance business accounted for merely0.42 percent of the world's life and non-life business in 1997. The figures of the basic parameters of the industry's performance viz. assurance Density and assurance Penetration also are evident of the hitherto existing low-yield Indian market conditions. The term "assurance Penetration" broadly measures the contribution of the assurance industry in relation to a nation's entire economic productivity. The figure of premium vis--vis the GDP of 1999 stood at 0.54 percent for non-life assurance business and 1.39 percent for the life assurance
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business. The term "assurance Density" reflects the assurance purchasing power. The premium per capita in India amounted to US $ 2.40 for assurance and US $6.10 for life assurance in 1999 but with the deregulation of the sector, a sea Change in the scene is most likely. The assurance sector in India has come a full circle from being an open competitive market to Nationalization and back to a liberalized market again. Tracing the developments in the Indian assurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. 4.1 COMPANY PROFILE

New India Assurance Company is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1068 offices, comprising 26 Regional offices, 393 Divisional offices and 648 branches. With approximately 21000 employees, New India has the largest number of special stand technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims of high magnitude .New India has been rated "A-" (Excellent) by A.M .Best Co., making it the only Indian insurance company to have been rated by an international rating agency. Rating based on following factors: Superior Capital Position Strong Operating Performance Only Company to develop significant International operations, long record of successful trading outside India Shri M. D. Mallaya, Chairman & Managing Director, Bank of Baroda, has been appointed as Director The New India Assurance Company limited. Since its inception in 1994, has emerged as TATA Financial Services Inc. One of India's leading financial managing assets of a large investor base. The fund offers a range
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of investment options, which include diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. New India Assurance Company Limited follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the company's management, sustainability of its business model and its competitive position, amongst other factors TATA Financial Services Inc. Company has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to investing. TATA Financial Services Inc. Strives to provide transparent, ethical and research-based investments and wealth management service and 2 Subsidiary companies in the year 2004-05. Overseas Premium of Rs.892.35 cores in the year 2004-05, which accounts for more than 80% of total overseas premium in India Company StrengthsLargest number of Offices - In India and Abroad Trained and technically qualified staff 1068 fully computerized offices across India. "A-" (Excellent) rating by A.M Best & Co (Europe) First domestic company to be rated by an International Rating Agency Rating based upon following factors: Superior capital position Strong operating performance Strong market position Only company to develop significant International operations, long record of successful trading outside India Pioneers First company to set up an Aviation Insurance Department in 1946. First company to handle the Hull Insurance requirements of the Indian Shipping Fleet.
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First company to establish its own Training School. First company to introduce the concept of 'Model Office Training'. First company to create department in Engineering insurance. Vision To be the most trusted name in investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business in India. The vision is to make assurance Company the dominant new insurer in the life insurance industry. This it hopes to achieve through our commitment to excellence, focus on service, speed and innovation, and leveraging our technological expertise. The success of this organization will be founded on its strong focus on values and clarity of purpose. These include: Understanding the needs of customers and offering them superior products and To be the first choice insurer for customers To be the preferred employer for staff in the insurance industry To be the number one insurer for creating shareholder value. Leveraging technology to service customers quickly, efficiently and conveniently. Mission GOAL The assurance Company collects money in the form of premium from individuals (A, B, C & D). The money collected from people is used to meet one person's calamity. The assurance Company enters into the process of canalizing by disbursing the amount collected into the command economy. Thus a significant part of the

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activities of the insurance industry of an economy entails mobilization of domestic savings and its subsequent disbursal to investors. The main risk faced by the assurance company is when all the Assurors claim for the reimbursement at the same time. This situation is very rare to occur, and is one of the major threat that the assurance company faces in its business operations. To provide financial security to individuals, trade, commerce and all other segments of the society by offering insurance products and services of high quality at affordable. To consistently pursue investor's wealth optimization by achieving superior and consistent investment results. To develop general insurance Business in the best interest Creating a conducive environment to hone and retain talent. Providing customer delight. Institutionalizing system-approach in all aspects of functioning. Upholding highest standards of ethical values at all times. Values Highest priority to customer needs High standards of public conduct Transparency in operations.

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4.2 AGGREGATE PERFORMANCE OF THE COMPANY

in cores

The company has seen a remarkable rise in its Gross Premium from Rs 5508.82 crores in 2008-2009 to Gross Premium of Rs 8542.86 cores in the year 2011-2012. The company has acquired total assets of Rs42162.74 cores as on 31st March, 2011. With its 26 regional offices, 395 divisional offices, 591 branches, 27 direct agent branches and 23 extension counters, the company is ranked as number one in the Indian market. It feels proud to call the company as the largest Non-Life Insurer in Afro-Asia including Japan which is also the first Indian Non-Life
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insurance company to cross Rs 7000 cores Gross Premium and in providing Global Re-Insurance facilities to a number of overseas countries.

4.3 OVERVIEW OF COMPANY New India is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1068 offices, comprising 28 Regional offices, 393 Divisional offices and 648 branches. With approximately 21000 employees, New India has the largest number of specialist and technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims of high magnitude. New India has been rated "A-" (Excellent) by A.M.Best Co., making it the only Indian insurance company to have been rated by an international rating agency. Rating based on following factors: Superior Capital Position Strong Operating Performance Only Company to develop significant International operations, long record of successful trading outside India The new India assurance company provides flexibility stability consistency great leadership with trust in their service towards customers corporate sector. The company offers a wide range of services to assist investors have a fulfilling and rewarding financial planning experience with us. We have designed our services

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keeping in mind the needs of our investors, giving them a smooth and hassle-free financial planning process.

4.4 NEW INDIA ASSURANCE MOTOR POLICY The motor insurance plan provided by the company covers scooters, motorcycles, private cars and all types of commercial vehicles. The policy is available under two variants- liability only policy and package policy. Liability only policy covers third party liability for bodily injury, death and property damage, personal accident cover for driver is also included under the liability variant while package policy covers loss or damage to the vehicle plus everything covered under liability policy. The package policy also covers loss arising from fire, explosion, earthquake, flood, riot, strike and any damage from terrorist activity. Various add on covers like damage or loss to electrical and other accessories, legal liability to employees can be added by paying extra premium. The New India Assurance car insurance claim is settled with the help of trained surveyors and by filling up forms. The New India Assurance car insurance premium and New India Assurance car insurance quotes can be compared online in order to understand details of the policy. The New India Assurance car insurance renewal can be done by visiting companys network branch as it has extensive network across India. Further, New India Assurance car insurance plans can be compared online with the plans provided by other general insurance providers that will help you to buy the policy fulfilling your requirements.
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HIGHLIGHTS This policy covers all types of vehicles plying on public roads such as:

Scooters & Motorcycles Private cars All types of commercial vehicles Motor Trade (vehicles in show rooms and garages)

As per the Motor Vehicles Act, 1988 it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property. A Certificate of Insurance must be carried in the vehicle as a proof of such insurance. Two types of covers are available: 1. Liability only policy. This covers third party liability for bodily injury liability and / or death and property damage. Personal Accident cover for Owner-driver is also included. 2. Package policy. This cover loss or damage to the vehicle insured in addition to (1) above. No- claim discounts are available on renewal of policy, ranging from 20% to 50%, depending upon the type of vehicle and the number of years for which no claim has been made.

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SCOPE Liability Only policies: The policy covers the vehicle owner's legal liability to pay compensation for: 1. Death or bodily injury to a third party person. 2. Damage to third party property. Liability is covered for an unlimited amount in respect of death or injury and damage to third party property for Rs.7.5 lacs under Commercial vehicle and private and Rs. 1 lacs for Scooters / Motor Cycles. Package Policy In addition to the coverage under liability only, this policy covers loss or damage to the insured vehicle and its accessories due to: 1. Fire, explosion, self-ignition or lightning. 2. Burglary, housebreaking or theft. 3. Riot and Strike. 4. Malicious Act. 5. Terrorist Act. 6. Earthquake (Fire and Shock) Damage. 7. Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone and Hailstorm. 8. Accidental external means.
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9. Whilst in transit by road, inland waterway, lift, elevator or air. 10.By landslide/Rockslide The policy also pays for towing charges from the place of accident to the workshop up to a maximum limit of Rs.300/- for Scooters/Motorcycles and Rs.1500/- for cars and commercial vehicles. It is also permissible to opt for higher towing charges subject to payment of extra premium. A restricted cover is also available covering the risk of Fire and/or Theft only, in addition to the compulsory cover granted under "Liability Only Policy". However the same is not available in case of vehicle ratable under Class D, Tariff for Miscellaneous and special types of vehicles. The important exclusions under the policies are:

Wear and tear, breakdowns Consequential loss Loss when driving with invalid driving license or under the influence of alcohol.

Loss due to war, civil war, etc. Claims arising out of contractual liability. Use of vehicle otherwise than in accordance with `limitations as to use ' (e.g. private car being used as a taxi)

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PRIVATE CAR INSURANCE The Motor Policy offered by New India Assurance provides insurance cover to scooters & motorcycles, private cars, all types of commercial vehicles and also motor trade (vehicles in show rooms and garages). Further, according to the Motor Vehicles Act, 1988, every vehicle on the road should be insured for liability of damages payable to third party due to accident, physical injury or death involving the vehicle. New India Assurance offers two types of policies, namely the Liability Only Policy and the Package Policy as per the preference of the customers. COVERAGE Liability only policy: The Liability only policy covers the third party liability for physical injury or death and property of the third party. It also includes the Personal Accident cover for Owner-driver. For commercial and private vehicles, the maximum amount of liability covered is Rs. 7, 50,000 and in case of two wheelers, it is Rs. 1, 00,000. Package Policy: The Package policy, in addition to the Liability only policy coverage, also covers loss or damage to the vehicle and its accessories in the event of an accident or due to various reasons. The various probable situations in which the vehicle is covered against damages are as follows:

Fire, explosion, self-ignition or lightning Burglary, housebreaking or theft Riot and Strike Malicious Act Terrorist Act
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Earthquake (Fire and Shock) Damage Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone and Hailstorm

Accidental external means Whilst in transit by road, inland waterway, lift, elevator or air By landslide/Rockslide

Towing charges from the place of accident to a repair workshop are also covered by the policy up to a maximum of Rs. 300/- for two wheeler and Rs. 1,500 for private and commercial vehicle. A larger amount can be insured against payment of extra premium. The risk of fire and/or theft can be insured as an added cover along with the mandatory Liability only cover except in case the vehicle belongs to the Class D, Tariff for Miscellaneous and special types of vehicles. EXCLUSIONS A policy, even the Package Policy, doesnt cover the damages or loss that occur due to certain foreseeable reasons or those that occur while the vehicle is being illegally used or for purpose other than what it is capable of doing. Thus, the vehicle is not insured against damages due to the following:

Wear and tear, breakdowns Consequential loss Loss when driving with invalid driving license or under the influence of alcohol
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Loss due to war or civil war Claims arising out of contractual liability Use of vehicle otherwise than in accordance with `limitations as to use' (e.g. private car being used as a taxi)

Add on Covers In order to avail additional covers apart from the standard policy coverage, additional premium can be paid towards various Add on covers. These include covers for damage to accessories and electrical and non-electrical fittings such as fans, stereo and air-conditioners. An additional personal accident cover can be availed for passengers, paid driver, legal liability to employees in private car and legal liability to non-fare paying passengers in commercial vehicles. SUM INSURED The amount insured by the policy is known as the Insured's declared Value(IDV) which is based on the manufacturers listed selling price of the particular brand and model and adjustment for depreciation at the time of insurance proposal or renewal. IDV is considered in cases where the insured claims total amount payable for vehicle which has been stolen or which has been totally damaged in an accident and is beyond repair. The IDV for vehicles which are beyond the age of 5 years (the difference between the certificate of registration and the commencement of the policy) or are obsolete (models which have been discontinued to be manufactured) is decided upon through the understanding of the insurer and the insured.

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The policyholder applying for renewal of a policy can also avail the no-claim bonus discount if they are eligible for it. The discount would depend upon the number of years of no claims and also the type of vehicle and would range from 20 percent to 50 percent. CLAIM PROCEDURE The New India Assurance Company provides its policyholders complete information about how and when to proceed in case they want to file a claim in the event of insured damages or loss. The procedures differ for various eventualities such as accidents, theft, third party liability, etc. The following steps must be taken for the respective case: Accidental damage to the vehicle:

Immediate intimation to the nearest office for issuance of a Claim Form Claim Form should be duly filled in to be submitted along with a copy of Registration Certificate and driving license of the driver of the vehicle at the time of accident

An estimate of repairs should be attached with the claim form Vehicle will be surveyed by a surveyor who is appointed by the insurance company

The surveyor shall submit his report to the insurance company If the vehicle is badly damaged, a spot survey at the site of accident can also be arranged by the company

Final bills/cash memos are to be submitted duly signed by the insured


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Salvage of the damaged parts may be required to be deposited with the insurance company after approval of the claim

In case of theft of the vehicle:


An F.I.R. should be lodged with the police immediately The policy issuing office should be informed The claim form should duly be filled and submitted along with a copy of the Certificate of registration and the FIR

The Final Police Report should be submitted as soon as it is received Full cooperation should be extended to the surveyor and/or investigator appointed by the company

4.5 OVERVIEW OF THE PRODUCT At The new India assurance Company, we believe that your investment needs depend on personal and financial goals. Identifying your financial goals is the key to achieving the big things in your life, be it your child's education or a carefree and comfortable retired life. After identifying and defining your financial goals, you now need to plan for each of them in an organized and a professional way. Investment experts around the world advise instruments like equity funds and stocks for long-term(more than 5 years), income funds for medium-term and liquid funds for short-term needs .The investment matrix here depicts the entire available variety of investment options. Those at the top provide for a greater opportunity for long-term capital growth while those at the bottom take care of current income and reasonable return & liquidity.

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The company provide following products such as Personal Products which includes motor policy, mediclaim policy etc. Commercial Products which includes aviation insurance, marine hull policy, marine cargo policy etc Industrial Products which includes fire policy, mega packages policy etc. Social Products which includes student safety insurance rural policy, Janata personal accident insurance etc Liability Products which includes public liability policy, product liability policy, liability insurance act policy etc.

CHAPTER V
FINDINGS AND SUGGESTIONS
5.1 FINDINGS
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i) The complete findings and required suggestions are finally given in this chapter for the purpose of improving the performance of New India Assurance Co. Ltd and also framing new policies in the future. ii) To be successful in marketing of insurance products, the entire business scenario has to be taken into account. iii) During the study to be found that majority of people are aware of Motor policy. iv)During the survey it was observed that major source of information for consumer are television and newspaper and least preference are given to magazines, agents and friends. v) Attractive schemes and brand image are the most important factor that influences the buying behavior of the consumers. vi)People are not satisfied with the opted insurance. It was found that the reason for the dissatisfaction of consumer is, delay in claim settlement and poor after sale service. vii) So to achieve a greater insurance penetration, New India Assurance Co. Ltd has to create a more vibrant and competitive industry, with greater efficiency, choice of products and value for customers.

5.2 SUGGESTIONS On the basis of the collected data and the analysis along with detailed discussion made in conclusion of this report, some suggestions can be made to the New India Assurance Co. Ltd which will be helpful to them in improving their services
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operational and financial performance. These suggestions have been discussed as follows:
i) Even though most of the policy holders are satisfied with policies,

plans they have but some new attractive insurance plans should be introduce to bind them not to switch over to other companies insurance plans.
ii) The company should find out the no. of people who are not having any of

the Motor policy plans through an intensive market research and motivate them to get insured. iii) Leveraging technology to service customers quickly, efficiently and conveniently.
iv) Developing

and implementing superior risk management and

investment strategies to offer sustainable and stable returns to our policyholders. v) New India Assurance Co. Ltd should target each and every class of the society.
vi) Company should provide full information to the customers before

targeting so they can take interest in the Mediclaim which they have opted for.

5.3 CONCLUSION

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Competition will surely cause the market to grow beyond current rates, create a bigger "pie," and offer additional consumer choices through the introduction of new products, services, and price options. Yet, at the same time, public and private sector companies will be working together to ensure healthy growth and development of the sector. Challenges such as developing a common industry code of conduct, contributing to a common catastrophe reserve fund, and chalking out agreements between insurers to settle claims to the benefit of the consumer will require concerted effort from both sectors. The market is now in an evolving phase where one can expect a lot of actions in coming days.

BIBLIOGRAPHY
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BOOKS
General Insurance Year Book, Dr.Rakesh Agarwal, July 2011 Elements of Banking & Insurance, 2006, Jyotsana Sethi Innovations in Banking & insurance, Romeo S. Mascarenhas Environmental & Financial Services, P.K.Bandgar

WEBSITES www.newindia.co.in www.wikipedia.org www.myinsuranceclub.com www.policybazaar.com www.insuranceexpert.in

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