This class of insurance provides a very wide form of cover for jewellery and Valuables.
Scope of Cover: The insurance covers the property described in the schedule against loss or damage by any accident or misfortune arising from fortuitous circumstances anywhere within the geographical limits stated in the schedule. The company will pay or make good to the insured such a loss to the extent of the intrinsic value of the property so lost or damaged.
Exclusion:
a) Wear and tear or depreciation
b) Moth, Vermin or any process of cleaning, repairing or restoring.
c) Convulsions of nature like earthquakes, volcanic eruptions, flood, cyclone, hurricane, tornado.
d) Existence of abnormal conditions like war and allied perils.
e) Riot, Strike, Civil Commotions.
f) Breakage of glass, damage by denting, overwinding and internal damage of watches.
g) Any act of the insured whereby the risks insured against are unnecessarily increased.
h) Nuclear exclusion
i) Delay, confiscation or detention by Customer or other Govt. Authority
The policy condition requires the insured by to take all reasonable care for protection of the property insured at all times.
Underwriting Considerations: The primary and indispensable requirement of “all risks” domestic business is good moral hazard. The cover is wide enough to include loss about which the company may have to rely to a very large extent on the insured himself. Proposals should be entertained from persons who are personally known or who have been reliably recommended to the company whose integrity and reputation are beyond doubt. Insurance should be given as an accommodation to only valued clients whose other business is on our books over a period of years. Proposals form actors, actresses, moneylenders and from person engaged in doubtful occupations should be declined.
All jewellery items and valuables proposed for insurance should be individually described in the proposal form and the sum insured agains each item should be related. No selection of risk/property should be allowed.
The following details should be ascertained and duly verified by the underwriting office should be included in the statement of statistics.
As standing reinsurance arrangements can be made upto certain limits, beyond which the company has to resort to facultative reinsurance, the concerned office should send policy copies to MAT Dept. promptly so that correct amount of premium can be ceded to the reinsurers.
Similarly, if a claim is reported on such an acceptance, this should be reported to MAT Department irrespective of the amount involved.
Once a risk is accepted, it becomes necessary to issue a policy document. A policy represents in writing, the agreement arrived at between the proposer and the insurer. Great care has to be taken to ensure that the policy wording clearly indicates the cover agreed upon. In case special conditions are to be applied either for restricting the standard cover or for extending the same, the relevant warranties or endorsements should be attached to the policy with specific reference thereof being made on the face of the policy in order to avoid any ambiguity; particulars, say, where exact rating is awaited from higher authorities or complete details are not available. In such a case, a Temporary Cover Note may be issued. Here also care should be taken to indicate the actual cover as against desired coverage.
In Miscellaneous Accident Insurance, the practice is to attach relevant clause to the standard policy document (Form No. AN-12/13) which should be properly drafted. A policy set contains extra copies for office use. Particulars regarding the insured, his name, address, period of insurance, sum insured or limits of liabilities, premium, type of risk covered should be typed on the original as well as the policy copies. In addition to this, the copies contain blocks for inserting statistical codes. Numerical codes are provided as per the code list furnished may be drawn and corrective action may not be taken or may be delayed.
Claims should be attended promptly, and if payable under the policy, settlement should not be delayed. G.I.C. has isued specific guidelines called “Claims Procedural Manual”. These guidelines should be carefully followed.
Most of the claims, especially the large claims, require investigation and assessment by an outside surveyor/loss assessor. For this purpose, empanelment of surveyors is done as per guidelines set by G.I.C. Due care should be taken to ensure that all the surveyors on the panel get the assignments equitably. It should also be ensured that the surveyor’s bills are settled as expeditiously as possible after the submission of the report. It is not necessary that payment has to await claim settlement. Surveyors are experts in their own line. Further the are independent of the insured as well as the insurer. Hence, their observations and recommendations would be unbiased. In view of this, proper co-ordination should prevail at all times.
If the estimate of loss is within Rs. 5,000 the Divisional Office shall have the discretion to waive and independent survey and settle the claim on the basis of the claim form and other supporting documents, after being satisfied that the claim is admissible under the policy provided the amount claimed is reasonable and consistent with the extent of damage. Where necessary, the authorized official in D.O. may also inspect the damage.
a) Full description of jewellery.
b) No. of precious stones, amount of gold
c) Type of ornament
d) Valuation as made by reliable recognized jeweler.
The client should however, be advised that the sum insured should not be regarded as the agreed amount payable in the event of total loss. The amount payable under the policy will be the intrinsic value of the property lost or damaged, subject to the limit of sum insured.
For belongings other jewellery, cover may be restricted to Fire and Theft only.
If camera is coverd, appropriate endorsement should be attached to the policy excluded following losses:
i) Mechanical failure or breakdown.
ii) Scratching, cracking or breakage of lens.
iii) Improper handling or use, overwinding
iv) Delay, confiscation by customs.
Camera carried loose slung over shoulder during travels or outings is more apt to be lost or left behind and consequently it do not constitute a good risk.
Since the scope of the cover extends to overseas geographical limits, insured losses may occur at stations, airports, on board of ship and in various parts of the world. These claims are more difficult to handle. Initially there may be delay in discovery and notification. Investigation usually cannot be made as effectively overseas as in India, because the insured may not be available for interview by the Company until he returns home. The chance of recovering an article lost abroad is remote and the cost of investigating a claim is heavy. In certain overseas countries the lacerny risk is very high.
It is very important to ensure the satisfactory evidence of value of individual items when the risk is proposed for insurance. This helps considerably when dealing later with the value of the article concerned, on account of appreciation or wear and tear & depreciation. This gives us firm base to ascertain liability based on proper valuation. Care exercised at the initial stages of acceptance of the risk will save unnecessary embarrassment in the event of claim.
Claims: Despite wide range of cover major losses are reported on account of theft, where insured is not in a position to explain time, place and incident of such occurrence e.g. claiming the loss occurred during illness whereas in reality the so called loss may have been on account of a gift.
We have already stressed need of good moral hazard in this class of business. In case of an individual the insured’s loss experience would be good in case of honest person who attends to his own business. In case of others loss reporting can be manipulative as insured may lodge a claim for an article lost earlier and noticed later without providing satisfactory evidence of time and circumstances of loss.
It is, therefore, evident that in this class of insurance, insured as owner of valuables should take measures to act as if not insured or alternatively restricted conditions on informing insured, should be incorporated in the policy stating that the insured jewellery when not being worn would be contained in locked safe.
In case of accidental loss of an article being reported following safeguarding measures should be adopted:
a) Systematic search should be conducted for smaller articles.
b) Payment of claim should be deferred where there is possibility of recovery by legal authorities.
c) In case of recovery of missing article, on payment of loss, it becomes property of the insurer & claimant either elects to retain payment or return money so paid in case he elects to retain the article.
d) Immediate notice of loss to the police.
e) Formal claim should be submitted to this company 7 days thereafter giving full details of loss & values involved thereof duly supported by documents.
The policy contains pair & set clause whereby the amount payable will not be more than the intrinsic value of the particular part or parts damaged or lost without reference to any special value such article may have as part or a set.
The onus will be upon the insured to prove that the claim has arisen from one of the causes insured against and that the property in respect of which the claim is made is not merely missing.
The company is not liable if loss is not discovered within 60 days of the happening of the event.
At its option, the company may elect to repair or replace the item lost or damaged instead of making cash payment.
There is an Arbitration condition which will apply in the event of dispute as to the quantum of claim, liability being otherwise admitted.
If liability is declined, the claim will become time bar within 12 calendar months from the date of disclaimer unless a suit is filed against the Company in a Court of Law.
As per GIC directives on claims procedure, where a loss is properly reported to the police and admissible loss is within Rs. 2500/- should be substantiated with a final investigation report from the police or from an independent agency or from carriers such a Railways, Airlines etc.
The behavior of the insured during investigation and settlement of the claim may warrant cancellation of policy after settlement, in which case cancellation condition No. 11 of the policy will be invoked.
If the loss is attributable to the negligence of a third party, prospects of recovery should be examined.
On a high value schedule where jewellery is concerned the insured is expected to have the article examined at reasonable intervals by competent jewellers. He should see to it that all attachments, fastenings and stone settings are attended to as advised by the jeweler.
Rating Guideline: This being non-tariff cover acceptance of risk is at the discretion of Insurer. Rating therefore, varies from 1% to 1.50%. Where Insured desires to cover valuables during travel and is required to travel extensively, above premium must be sufficiently loaded.
In case of jewellery in Bank Lockers Premium Rate may be reduced and first loss basis policy can be considered.
Minimum Premim chargeable is Rs. 30/-.