Car insurance becomes effective from the date of premium payment

If you have a cover note, then your insurance is valid and you can make a claim


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I bought a car a few days ago and also signed my insurance papers before I took possession of the car. Unfortunately, just one day after I brought the car home, two of its tyres and the sound system were stolen. I have lodged a complaint about it at the local police station and have a copy of the report. As the theft took place the very next day I took delivery of the vehicle, will my claim still be entertained? I am not sure if the policy has come into effect? What should I do?

—Sadananda Rao

An insurance policy becomes effective from the date of payment, if an insurer accepts risk coverage. Typically for a motor insurance policy, insurers issue a temporary cover note before a formal policy copy is issued. While purchasing a new car, a cover note is handed over immediately on or before delivery. If you have a cover note, then your insurance is valid and you can make a claim. You should immediately inform the insurer about the loss. The insurer will appoint a surveyor to inspect the loss and advise you on the next steps.

I live in a joint family and currently there are four earning members. As I am earning better than the others, I want to take a health insurance policy for everyone—including my parents, my children and wife, my brothers and their wives and children—12 members in all. Can you suggest a cost-efficient plan for us?

—Raghav Chaddha

While there are policies that can cover the entire joint family, I recommend that you buy separate policies for each family member. It works out better to issue separate policies for a few reasons. First, to calculate premium under a joint policy, significant weight is ascribed to the eldest individual in the family. Second, medical history for each person is unique. Any adverse medical history for a specific individual may influence the underwriting decision for the entire family. Third, future claim utilization will vary by each family. In case of a joint-family policy, a single claim will make the no-claim bonus void for everyone. Fourth, the sum assured will be shared with a much larger set.

You could refer to the Mint SecureNow Mediclaim Ratings to find the most suitable plan for each family member (http://www.livemint.com/mediratings).

I live in an independent house and have bought a home insurance policy, which also covers personal property. But my property also has expensive fittings. As I have a personal property cover, can I get these items added to the policy or is the cover restricted to personal items inside my home only?

—Prateek Kumar

A home insurance policy can be customized to include contents of the house. Contents could include furniture and fittings, leasehold improvements, jewellery, electronic appliances, art and other belongings. For some of these assets, such as art, jewellery and electronic equipment, it is possible to get an extended all-risk cover other than the standard fire and special perils cover, which is extended for the building. All-risk coverage includes losses due to mishandling, short-circuit and theft.

What is a top-up health insurance plan? How does it work? Is there something called super top-up as well? What is the difference between the two? Can I take a top-up plan along with my company’s health insurance?

—Chandresh Narang

A top-up plan supplements a base plan to provide additional coverage in a cost-effective way. A top-up plan has a deductible—an initial claim amount that is not covered under the policy. Claim amounts that cross the deductible get paid under a top-up plan. Top-up plans vary in the way a deducible is applied. A standard top-up plan applies the deductible for each and every claim whereas a super top-up plan considers aggregate deductibles for a year. So, in a super top-up plan if two or more claims occur in a policy period, all of them will be counted towards the deductible. A super top-up plan is slightly more expensive.

Most top-up plans work irrespective of the base plan, and work with a company’s health insurance plan as well. For claims up to the deductible amount, you can use your company’s health insurance policy. For claims above the deductible threshold, you can utilize the top-up plan.

Abhishek Bondia is principal officer and managing director, SecureNow.in

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