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No Claim Bonus (NCB) OR No Claim Discount NCB is offered at the time of a car insurance renewal. Clients benefit if they do not claim in a policy year. This discount off your comprehensive premium. On each renewal, your NCB or discount will increase providing you haven't made any claims that affect your NCB. If you are eligible, your NCB will keep increasing until you reach the maximum discount level. Your NCB is shown on your certificate of insurance. The no-claim bonus is a reward to the vehicle owner for prudent use of the vehicle. For example, if you sell a 10-year old car and purchase a new car, the no-claim bonus will pass on to the new vehicle and you can save considerably on your insurance costs. It can be transferred to another insurance company subject to evidence in the form of a renewal notice or letter, confirming the NCB entitlement from the previous insurer. NCB is not calculated on your entire insurance premium amount. It is not applicable for third-party car in

Legal liability in the case of motor Car Accident Liability refers to the person or party who has caused an accident and is legally responsible for the damages. Liability can be assigned to a driver, a passenger, the owner of a vehicle, or other parties. When determining liability, courts examine all facts of the case and decide on account of negligence. Simply put, “liability” in an auto accident means fault, as in, whoever is responsible for the accident is the at-fault or liable party. Liability may be simple a drunk driver running a red light and crashing into another car, for example. When your insured car is involved in an accident in which a third party suffers damages, you are legally liable to pay for those damages. If your vehicle is equipped with a car insurance policy, the third-party liability cover under the insurance will fulfill the legal requirement of compensating the victims. Common types of car accidents include: -Rear-end collisions -Intersection accidents -

A Cession Cession refers to the portion of insurance policies or portfolio which are transferred to a reinsurer. This allows the ceding company to reduce its exposure, so that risk is distributed among two or more companies instead of falling upon a single insurer. Transferring risk to a reinsurer can take place in two ways proportional or non-proportional; -Proportional reinsurance is an arrangement where the insurer and reinsurer share a percentage of the premiums and losses. -Non-proportional reinsurance only requires payment from the reinsurer if losses are above an agreed-upon amount. Currently, the insurance industry has become more complex due to high competition among the insurance companies. In this regard, reinsurance provides an opportunity for both the insurer and reinsurer to share benefits and losses based on the accurate actuarial calculations that determine the loss or risk incurred. The primary insurer essentially sub-contracts portions of responsibility for the c

CLAIM PROCESS An insurance claim is a formal request to your insurance provider for reimbursement against losses covered under your insurance policy. It acts as a safety net against financial losses. You must be the legal beneficiary to claim. The claim, step-by-step process is simple; -The first step in processing a claim is reporting the claim to the insurance company through your agent or broker, so they should understand your situation and how to proceed. -Claim investigation begins. -Your policy is reviewed. -Damage evaluation is conducted. -Payment is arranged which is the claim settlement. Where the policyholder claims financial support from the insurer. In case of life assured’s demise during the policy tenure, the nominee lodges a claim in order to receive the death benefit. In casualty and property insurance these four elements are necessary for a successful claim: -duty -breach of duty -causation, -damages. The claimant is oblige to approach the insurer to de

Death Benefit It is the amount of money your insurer will pay out to your beneficiaries if you die during the policy's term. A death benefit is the primary reason someone purchases a life insurance policy; It is the amount that is paid to the nominee in case of death of the life assured during the policy period. It is payout to the beneficiary of a life insurance policy, annuity, or pension when the insured or annuitant dies. This predetermined amount of money typically is tax-free and can be paid out all at once or in payments over time. The cost of your policy is determined by factors like your age, medical history, policy type, and the face amount you select. The greater the face amount, the higher your premium. Remember, death benefit and sum assured are no similar terms. This is because the death benefit can be equal or higher than the sum assured as it can include the rider benefit as well. If an estate exists, the executor named in the will or the administrator named

REVIVAL PERIOD The revival period is the span of time offered by the insurance company during which the policyholder can reactivate a lapsed policy. Once the revival period is over the policy can never be re-activated even if the policyholder wants to pay all the premium payments that are due. However, the re-activation process must be completed within a specific period of time after the grace period ends. This period is known as a revival period. During the revival period, the policy is reinstated on the basis of certain conditions. In one case, the policy holder needs to pay the interest along with the unpaid premium. In another case, the policy holder needs to undergo medical tests in order to reinstate the policy. Usually life insurance policies have a revival period of 2 consecutive years since the policy has been lapsed. Under the revival period the policyholder can revive the life insurance policy by making the due premium payment along with applicable charges. For example;

MATERIAL DAMAGE POLICY The policy covering damage to property (usually a commercial fire policy) as the result of which damage a business interruption claim may result. It is a condition of business interruption insurance that a material damage policy must be and remain in force. The purpose of Material Damage insurance is to reinstate the asset lost or damaged, as it was if no fire or other insured event had occurred. The insured may elect not to reinstate and can negotiate a financial settlement, which would reflect a depreciated reinstatement value. Material Damage insurance is subject to a deductible. This means that before the policy will respond the loss must exceed a pre-agreed amount. However the deductible vary between policies and insurers for a number of reasons: -Previous claims experience -Business activities -Building construction/location Three common exclusions to a Material Damage policy are: -Terrorism -Electronic Data -Building Defects Material damage pol

Engine Protect Cover (An Add-on or Extension) Engine protect cover is an add on cover that you can add to your comprehensive or own-damage car insurance policy by paying an additional premium. It covers the insured vehicle's engine against consequential damages resulting from lubricating oil leakage or water ingress. The reason Engine Protection cover is required for a car is because; the car engine is extremely expensive, and therefore, repairing it incurs a lot of costs. In addition, it can lead to significant material and labour charges that may be difficult to afford out of pocket in an unexpected incident. Engine protection is thus required because it is the most important element responsible for the overall functioning of the vehicle. This add-on cover is appropriate for vehicles that are usually parked in areas prone to waterlogging. The add-on cover also protects the damages that occur to the car engine parts such as the crankshaft, gearbox, pistons etc. A comprehensiv

EXCLUSIONS An exclusion is a provision within an insurance policy that eliminates coverage for certain acts, property, types of damage or locations. Things that are excluded are not covered by the plan, and excluded costs don't count towards the plan's total out-of-pocket maximum. Those provisions stated clearly are not covered under an insurance policy, if a claim arise based on these exclusions, the insurance company will not pay any benefit. For instance, Suicide is an exclusion in a term insurance plan. E.g. If a person commits suicide within 1 year from policy inception date, the plan will be void and only 80 % of the premiums paid will be payable as a death benefit. Policy exclusions are use in insurance to create a balance between coverage for fortuitous losses (losses you could not have reasonably prepared for) and the need to remain solvent in order to pay those claims. Common exclusions are typically included in a range of policies, for example: war, terrorism,

The SIX Principles of Insurance This six core principles that have been established over time and been upheld by the courts to respond to highly complex and sophisticated risks of our era. 1) Insurable Interest; The interest that a person has in something such as a particular property or another individual, which means that the person would suffer a loss should that property or individual be harmed. In insurance law, you can only buy insurance for something or someone in which you have an insurable interest. This principle helps to prevent moral hazard, in which a policyholder would have a financial incentive to allow or even cause a loss. 2) Utmost Good Faith; Uberrima fides is a Latin phrase meaning "utmost good faith". It is the name of a legal doctrine which governs insurance contracts. This means that all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal. Therefore parties must disclose

NOMINEE The Nominee is a person nominated by the policyholder, who receives the life insurance pay-outs and other benefits in case of an unfortunate eventuality. (Also known as the beneficiary). The nominee can be anyone you deem to be your first relative - your parents, spouse, kids, siblings etc. The nominee must be declared at the time of purchasing the policy. Policyholder’s spouse, children, parents can be declared as nominee who may have immediate financial dependence on you. If an investor dies, the individual or individuals who will receive the proceeds are called a nominee or nominees. Therefore they have the legal rights to receive an insured amount if the policyholder passes away during their policy period. As strange as it may sound, the nomination of a stranger does not really make sense. Insurers do not accept strangers as nominees. Hence, even if you want to nominate a distant relative or a friend, it will not be easy to do so. Moreover, appointing a nominee who is n

DEDUCTIBLES: VOLUNTARY & COMPULSORY Voluntary deductibles - At the time of purchase of a car insurance policy, you can opt to bear a part of all claim payouts. In such a cas you can avail a considerable discount in motor insurance own damage premium. Compulsory deductibles - It's a part of the car insurance claim amount that you will have to pay mandatory. This value depends on the cubic capacity of the vehicle. Deductibles serve a dual purpose: they save the insurance company money (including the administrative cost of processing small claims) and may help keep your premium costs lower. Compulsory deductibles are used by car insurance companies to prevent car owners from raising frequent claims, particularly for small damages. With compulsory deductible the value you contribute is a small amount, and can be easily borne at the time of a claim. Compulsory deductible the premium amount of the car insurance is not affected by the amount of compulsory deductible. Voluntary

Add-on Covers OR Extensions OR Endorsements Unlike few years ago insurance generally provided simply standard covers protecting risk of their clients, today they serve a plethora of of covers to the main policy for an additional premium. These are additional coverage benefits that offer enhanced protection to the insured life or property. By purchasing an add-on cover at an extra premium you can enhance your coverage benefits for damages that are excluded from a basic insurance policy, by paying additional premium. These happens when you buy a standard Insurance policy and desire for more security. Which can be done by enhancing the policy, getting an add-on covers/Extensions. You have the liberty to choose and pick the ‘Add on’ that entices you the most base on your budget. Practical scenario, having a comprehensive motor Insurance policy and taking a 'Roadside Assistance' cover as add-on, that offers emergency services such as towing your vehicle to a nearby service sta

OWN DAMAGE (OD) COVER This is a part of the motor insurance policy coverage Insurance is a motor insurance policy that is intended to safeguard your car against unforeseen own damages. This policy offers car insurance coverage for own damages sustained by your car due to road accidents, fire, natural calamities, or any other mishap. This part of the motor insurance coverage does not include the liabilities for third-party injuries, death, or property damage. The third party liability is covered by the liability plan not the own damage cover. So, for instance, if your car meets with an accident that causes damages to the vehicle itself, the expenses incurred for the damage repair will be borne by the insurance company. While an Own Damage cover is great for your vehicle’s protection, here are few exceptions. -Third-Party Liabilities, Drunk driving, Driving without a Licence, Add-Ons Not Bought, Consequential Damages, Contributory Negligence. If you love your car, ensure that you

Comprehensive Policy A comprehensive is an all-inclusive cover that protects the insured vehicle and the owner from various incidents. The coverage under such a plan includes the following: -Explosion, fire, lightning, self ignition -Theft, burglary, housebreaking -Strikes or riots -Earthquakes -Hurricane, typhoon, flood, cyclone, inundation, tempest, hailstorm, storm, frost -External accidents -Malicious activities -Terrorist acts -Damages to the insured vehicle while in transit via rail, road, inland waterways, lift, air, or elevator -Rockslides and landslides -Liabilities to a third party in an accident Typically you can take a comprehensive coverage at any time to the following policies: -Auto insurance -Motorcycle insurance -RV insurance -Boat insurance You may also be able to purchase comprehensive coverage for ATVs, golf carts, snowmobiles, and other types of vehicles. Comprehensive coverage is non-collision-related damage to your vehicle, which is why it&#

TAKAFUL Takaful is a system of insurance based on the Islamic principles of mutual assistance (ta’awun) and donation (tabarru). Takaful means a joint guarantee, whereby a group of participants contribute towards a pool of money and mutually agree to protect each other by compensating those participants who suffer from an insured peril. Takaful is a type of Islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage. Takaful-branded insurance is based on sharia or Islamic religious law, which explains how individuals are responsible to cooperate and protect one another. The core three principles of Takaful are: -Members cooperate among themselves for their common good. -Every member pays a subscription to help those members that might need assistance. -Divide losses and liabilities among the members through a pooling system Takaful insurance companies were introduced as an alternative to those in the co

Captive Insurance A captive insurer is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting. They are typically established to meet the unique risk-management needs of the owners or members. Examples: A companies creates an insurance company as one of it's subsidiaries to cover its risk. The companies in this case is the insured. The benefits from the underwriter profits of the risk covered by the Insurer who is it subsidiary. The advantage of captive Insurance to a business is that it can substantially lower insurance costs in comparison to premiums paid to a commercial insurer and the captive can provide coverage that is unattainable or inadequate in the private market. In addition to the opportunity to obtain more specialized coverage for the company’s risks, the parent company can achieve better contro

The Proposal Form, An Insurance policy Document or The Insurance Contract form. They all mean the same. It is a legal contract between the insurance company (the insurer) and the person(s), business, or entity being insured (the insured). It is the most important and basic document required for an insurance contract between the insured and insurance company. It includes the insured's fundamental information like address, age, name, education, occupation the person's medical history for example in a medical insurance cover. Reading your policy helps you verify that the policy meets your needs and that you understand your and the insurance company’s responsibilities if a loss occurs. Insurance policy document is a reference document that contains all information regarding cover, insured, insurance company, premium paid, risk covered, and sum assured. The document is issued by the insurance company to outline their terms on which the document is issued. #benewinsurance #

Insured v Insured: A Principle in Professional Indemnity Insurance Cover. An exclusion found in directors and officers (D&O) liability policies (and to a lesser extent in other types of professional liability coverage). The exclusion precludes coverage for claims by one director or officer against another. The Insured v. Insured, is an exclusion that provides “the Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured brought by or on behalf of any Insured. Insurers consider the above to be moral hazards. Example: A board of directors of an Institution covered by a professional liability policy from company X, if one of the directors sue another due to internal disputes/infighting. In such a case company X will not cover the legal expense or any outcome of the court case decision because a liability policy is aimed at protecting the insured actions against third parties not against his/herself. The D&O are considere

Mutual Company A mutual company is a private firm that is owned by its customers or policyholders. The company's customers are also its owners. As such, they are entitled to receive a share of the profits generated by the mutual company. Mutual companies are most often insurance companies. Each policyholder is entitled to a share of the profits, paid as a dividend or a reduced premium price. Mutual insurance companies do not have external shareholders taking profits out of the business in the form of dividends. Any surplus produced by the operating activities of a mutual insurer is applied for the sole benefit of its Members. The primary mission of a mutual company is to protect members, by maintaining the capital needed to meet their needs and cover any insured losses, not to maximize profits for shareholders. Mutual insurance as a concept began in England in the late 17th century to cover losses due to fire. It began in the United States in 1752 when Benjamin Franklin est

An Endorsement/Rider An insurance endorsement/rider is an amendment to an existing insurance contract that changes the terms of the original policy. For example, you might have an insurance endorsement to add coverage for a valuable piece of jewelry, like an engagement ring, or expensive artwork. An endorsements can be; Standard or non-standard endorsements, Mandatory or voluntary. Insureds often request endorsements to enhance their coverage for speciality property, or to add coverage that isn’t part of their insurance company’s standard policy. When an insured has a need that is not covered by standard policy wordings, insurance companies can still accommodate them. The insurance company adds an endorsement to the policy that overrides the standard policy wordings. An endorsement/rider can be issued at the time of purchase, mid-term or at renewal time. Insurance premiums may be affected and adjusted as a result. It's a legally binding amendment to a contract. An endorseme

Volenti Non Fit Injuria This a a Latin Maxime that states, No wrong is done to someone who willingly places themselves in a position where harm might result, knowing that some degree of harm might result. This is a defence which may be raised in cases of a tort of negligence by the defence party. For example: accepting a lift from a drunk driver any resulting accident that may occur will be considered as contributing negligence ( volenti non Fit Injuria). Therefore, a person who knowingly and voluntarily risks danger cannot recover for any resulting injury. Insurance compensation may not be applied in cases of volenti Non Fit Injuria. A defense against charges of negligence barring or severely limiting an individual's recovery under the tort of negligence. The defendant must prove that 1) the plaintiff was reasonably aware of and appreciated the danger involved; 2) the plaintiff voluntarily exposed himself to the danger; and 3) the assumed danger was the proximate cause of t