Photo: Hemant Mishra/Mint
Photo: Hemant Mishra/Mint

It is possible to insure gold lying in your bank locker as well as that at your house

Insurance premium rates are lower for gold at the bank locker compared to at home

I am planning a trip to Indonesia, which is currently in the news for volcanic eruptions. If the airport is shut and my travel plans are delayed, will my insurance cover my hotel and food expenses? What is the cap on such expenses, in terms of what can be paid and by how many days my travel is delayed?—Charan Das Negi

Yes. In case of flight delays, travel insurance is meant to cover consequential out of pocket expenses. Your food and incidental expenses will be covered by your policy. Once you incur these expenses, you should submit the actual bills along with a claim form to the insurer for reimbursement.

However, the limit for this cover is generally small and may not cover hotel expenses. The actual amounts vary by plan and insurer. For example, a common plan requires that delay should be for a minimum of 8 hours. Further, it would indemnify only $10 per 8 hours of delay and in aggregate $500. Limits are much higher in case the trip gets cancelled.

Can I insure gold lying in a bank locker as well as in my home? Is the premium different for both?—Indu Verma

Yes, you can cover gold lying in a bank locker as well as that in your home. Several home insurance policies offer these as add-on covers. Insurers are reluctant to offer stand-alone covers just for gold. Premium rates are lower for gold at the bank locker compared to at home.

I have been buying car insurance from an acquaintance for the past 7 years. Recently, I got to know about a case where a friend was palmed off a fake insurance policy; which he got to know of when he filed a claim. It is convenient for me to buy policy from the acquaintance but is there some way I can check if the policy is genuine and the one I had paid for?—Vani Dutta

Always buy insurance from an entity registered with Insurance Regulatory and Development Authority of India (Irdai). You should see a copy of their Irdai licence. In case you buy from a licensed broker, you could check these details including the contact details of the principal officer, on their website. This will minimize the chances of getting into a fraudulent transaction. Moreover, even if there were an issue, you would know an effective way to raise your grievance.

Further, you should always pay premiums vide cheque or bank transfer. Avoid cash. Payment has to be always made in favour of the insurance company. Neither brokers nor agents are authorized to accept cheques in their names. You can verify the complete name of the insurer via its website. Under contact details, you will see the full name. Do not issue cheques in any other aliases.

Finally, once you have the policy copy, you should verify it with the call-centre of the insurer. You can cite the given policy number and confirm the policy details. You can use this opportunity to double-check that your records are accurately updated in insurer's records. 

Also, it is standard practice for the insurer to send you notifications directly even if you have bought the insurance through an intermediary. 

Recently, some cases of medical overbilling were in the news. Please let me know if my medical renewal premium will be adversely affected due to such a practice by a hospital.—Davenider Bhogal

Medical overbilling is an increasing concern for insurers. Overbilling may be of several kinds including prescribing unnecessary diagnostics, and charging higher rates. Insurers routinely investigate claims to minimize such cases. In several cases, insurers blacklist hospitals that are known for bill frauds. Such cashless or reimbursement bills are not admitted by insurers. The good news is that the insured is not singled out in these situations. By law, renewal premiums cannot be increased for a particular individual based on their specific claims history.

 I have taken a business loan from a non-banking finance company (NBFC). The firm insists that I buy property insurance for my collateral. Is it advisable to buy such an insurance? What are the implications of buying it directly from an insurer compared to buying from them? —Name withheld on request

You must buy property insurance for your business assets. In case of an unforeseen accident, if you are uninsured, it may be extremely difficult to reinstate the business to its original position. Property insurance helps you indemnify losses such as fire, earthquake, flood, riot, and malicious damage. Many of these risks can cause total loss of assets.

You should certainly compare the cost-benefits of plan offered by your NBFC with that offered by the insurer directly. Your NBFC should ideally be able to source premium at a significant discount, because they are able to aggregate demand across a large number of businesses. If the cost-benefit offered by them is inferior to the terms offered by an insurer or a broker, then you should source the insurance through an alternate route.

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

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