Travelling Abroad? Here Are 3 Things You Must Know About Travel Insurance.

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Posted on January 25, 2013 by Runjhun

3 Things You Must Know About Travel Insurance

Insurance is a dubious prospect and despite its proven necessity and utility, there is still a large section of individuals who think several times before investing even a penny of their hard earned money into insurance. It would not be an exaggeration if we say that has insurance not had tax benefits, the number of insurance patrons in this country would have been drastically low.

Admittedly, consumer awareness has increased in this regard in past several years and insurance has increasingly been recognized as a necessity rather than a liability. However, add travel behind insurance and we have consumers clamoring all over again.

Travel insurance continues to be an alien territory for the consumers, willfully sacrificed at the altar of frugality. Even when consumers do opt for travel insurance out of compulsion, they still fail to recognize the importance of this form of insurance and the things they must keep in mind while opting for it.

We bring you a lowdown on some crucial ‘Whys’ and ‘Hows’.

Travelling Overseas? You Need Travel Insurance—You need it not just because it is something needed to be done. You need it because it is your cushion against a whole lot of very real issues that one may face overseas including medical expenses, evacuation and repatriation, loss of checked-in baggage, delay in baggage, personal accident, loss of passport, trip delay and even hijack/other terrorist activities.

An overseas travel insurance is your safety net in a foreign land and hence, you must be extra careful when opting for a policy. Do not make the choice mechanically. Be cautious and aware.

Choose Your Insurer Wisely — Getting travel insurance these days is extremely easy with insurers having convenient tie-ups with ticketing platforms where the insurance policy is issued along with the ticket. But in this ease lies the trap. Don’t sacrifice your insurance to a safe travel for the sake of convenience. Be vigilante and make a lot of enquiries. Make sure your insurer is a established and trusted brand with a good track record. Do background research yourself on the internet and read the reviews/complaints of the people who have had an experience with that insurer. Their perspective may not be entirely objective but reading enough user reviews is bound to give you a fair idea of any recurring concerns or red flags with respect to the insurer.

Choose Your Policy Carefully—This is an extension of the previous point. In addition to a good insurer, you also need to opt for a policy that suits your individual needs. If you are a kind of a traveler who travels with bare minimum luggage, a policy that focuses on personal safety and insurance would be a better choice than one that puts a lot of emphasis on insurance of the baggage. Also, always compare the premiums and benefits before settling for a policy. The policy your travel agent is offering may not be the best deal around. Always look into the comparative pricing and coverage of all the policies and then make a decision.

While we hope that none of our readers ever be in a situation where they need to avail their travel insurance, we always intend to give you the best pragmatic advice—which in this case is to always get a travel insurance when travelling abroad. It is an investment that shall hold you in good stead.

Happy Travelling!

Misselling No More! IRDA Comes Out With A Framework To Curb Insurance Frauds.

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Posted on January 23, 2013 by Runjhun

IRDA To Curb The Insurance Frauds, Cheating Agents Menace, Comes Out With A Framework.(Picture Credit: topcontentcenter.com)

Just because you are not paranoid, doesn’t mean your insurance agent is not out there to cheat you!

For the longest period of time, we have been resonating with this sentiment, urging our readers to be on guard against the misselling tactics of the insurance agents. For a glimpse of our concerns and take on this issue, see 5 Shocking Misselling Tactics Of Insurance Agents.

Our paranoia hasn’t been without a reason and the statistics emerging from within the insurance industry with respect to the cheating insurance agents has done nothing to quell our fears. However, the regulator IRDA seems to have been bothered by these concerns as much as the ‘aam junta‘ and after a long long while, decided to do something concrete about it.

IRDA has come out with a framework for monitoring frauds in the insurance sector and asked insurers to carry out due diligence on their staff, including agents. The circular issued by IRDA to the insurers directs them to lay down procedures to carry out the due diligence on the personnel (management/staff)/ insurance agent/ corporate agent/ intermediary/ TPAs before appointment with them. It is required that insurers understand the nature of fraud and take steps to minimise the vulnerability of their operations to fraud.

The insurers are required to submit a compliance report with the regulator by June 30, 2013.

A rigorous due dilligence of the employees, especially agents, if done right, is one of the most effective methods to curb fraudulent practices and to that extent IRDA’s has taken a step in the right direction.

IRDA has classified frauds in the insurance sector under three heads — claim fraud or policyholder fraud, intermediary fraud and internal fraud. It has also asked the insurance companies to frame anti-fraud policy and said that the company’s board would review the policy on an annual basis.

Insurer have been directed to inform both potential and existing clients about their anti-fraud policies and highlight the consequences of submitting false statement for the benefit of policyholder in the insurance contract.

We really hope that the move doesn’t turn out be another damp squid and does succeed in actually curbing this menace at least to some extent.

IRDA comes out with framework for monitoring insurance frauds (Business Standard)

Good News! Delayed In Filing An Insurance Claim? Your Claim Still Cannot Be Denied!

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Posted on January 15, 2013 by Runjhun

complaint against oriental insurance consumer forum says claims are not timebound

Insurance and good news is an oxymoron in more ways than one. Yet this is one of those rare times when tidings from the insurance industry are favorable for the average consumers.

Predictably, insurance industry is hardly responsible for the good stuff. It flows from the Maharashtra State Consumer Dispute Resolution Commission.

In a landmark verdict that has the potential of fundamentally changing the way the claims are rejected by the insurers in this country, the Maharashtra State Commission has held that insurance claims are not timebound. The ‘deadline’ for filing a claim is not mandatory but only directory and the insurers cannot reject any claim simply because it was filed after the expiry of this ‘deadline’.

This remarkable verdict was delivered by the State Commission while deciding upon a complaint filed by a widow against the Oriental Insurance Company Ltd. The forum directed The Oriental Insurance Company Ltd to pay the widow of a man who died in a 2006 accident the entire claim of Rs 1 lakh plus a compensation of Rs 46,000 even though the claim had been filed well past the one-month ‘deadline’.

The Commission further stated that it has constantly held that giving intimation within specified period or within one month is not a ‘mandatory condition’, but it is a ‘directory’ in nature and breach of this condition does not empower appellant insurance company to forfeit or foreclose the insurance claim required to be duly settled.

And thus, the insurers in the country were duly snatched of one of their favorite grounds for repudiation of valid claims–delay in filing!

Kudos State Commission!

Insurance claims not time-bound: Panel (Times Of India)

Consumer Alert! LIC A Better Bet For Consumers Than Private Insurers, Says IRDA.

Posted on January 7, 2013 by Runjhun

LIC better at paying claims than private players according to IRDA

This one is for all those who have weathered every doubt, every cynic and every critic in the country to uphold one single belief–Bima lena to Bhartiya Jeevan Bima Nigam se hi lena!

As far as we are concerned, choosing among insurers is like choosing between the rock and a very hard place. If we could, we would have hung all the insurers upside down in the nearest well till they promised to treat the consumers fairly.

But of course, it is not possible. Insurers are huge corporate structures and while they exhibit all human evil, they are hardly human enough to be hung–upside down or otherwise.

While we struggle to choose the lesser evil amongst the insurers, it seems IRDA does not have a similar difficulty–they have a clear-cut favorite.

No prizes for guessing–it is the LIC!

According to IRDA’s annual report, LIC’s claim settlement ratio is better than the two dozen odd private insurers in the country.

According to the report, LIC has settled 97.42 per cent cases relating to death claims during 2011-12 compared to 89.34 per cent by private sector companies. The industry average worked out to be 96.26 per cent.

As per the report, settlement ratio of LIC increased to 97.42 per cent during the year 2011-12 when compared to 97.03 per cent during the previous year and the private insurers repudiated higher number of claims as compared to LIC.

Of course, a claim settlement percentage as high as 90% is surreal for us lesser mortals. For all we know, we have been reporting only repudiations all through the year with alarming frequency.

The report, however, re-establishes LIC’s comparative credibility in the Insurance sector–a proposition that Tadka agrees with, making insurance the one of the rare sectors where a government organization a better bet for the consumers than the private players.

LIC better at paying claims than private insurers: Irda report (Business Today)

Beware! The Cheque For Your Premium Payment May Buy You A New Insurance Policy–Without Your Consent!

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Posted on December 27, 2012 by Runjhun

complaint against insurance agents misselling insurance policy IRDA mulls new norms

Picture this. Your duly sign a cheque for the payment of the premium of your existing policy, handing it over to your agent well within time. A couple of months later you come to know that your premium was never paid. And not just that, you are also the ‘proud’ holder of a brand new policy–one you had never really bought!

Unbelievable as it may sound, this is a scenario which routinely presents itself in the insurance sector as a biting reality. There has been a disturbing rise in the number of cases where unscrupulous representatives or agents collect renewal payments but use the cheques to sell fresh policies to unsuspecting customers.

Mis-selling is a concern we have been regularly raising and warning our readers against (See 5 Shocking Misselling Tactics Of Insurance Agents That Everybody Ought To Know About!). This is just another facet that has raised its ugly head and need to be guarded against.

The issue has become grave enough for IRDA to actually plan an intervention and ensure such instances are not repeated. IRDA is reported to be considering a suggestion that renewal cheques should be made in favour of specific policy numbers to avoid such cheques being used for any other purpose except the payment of the premium.

At present, the regulations are unclear and unspecific. Insurers accept cheques made out to a specific policy number but don’t refuse those that are simply in favour of the company. Some advise policyholders to specify the policy number on the cheque while others don’t. The result is a slew of such malpractices which not only leave a bunch of troubled consumers with unwanted policies but also insurance companies plagued by dissatisfied consumers.

Both the regulator and the industry are trying to rectify the situation by introducing fresh measures. While IRDA contemplates new regulation, several insurers are also planning to make mentioning policy number on the cheque mandatory. There are also proposals to have a welcome call whenever a new policy is purchased and let the consumer know if there is an unpaid premium of any previous policy.

While the regulations are contemplated and implemented, the chunk of responsibility to save themselves from the fraud lies with the consumers themselves. Awareness and education is the key.

The consumers should make sure that they always make the cheque stating their policy number. When buying a new policy, customers should mention their name, telephone number, email id and the name of the policy opted for on the back of the cheque.

Irrespective of what measures do or do not come into place, this is one sure shot way of saving yourself from this fraud.

IRDA mulls new rule to chequemate fraudsters (Economic Times)

Consumers Alert! Insurers Can’t Alter The Terms Of Your Policy Unilaterally At The Time Of Renewal.

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Posted on December 26, 2012 by Runjhun

complaint against united india insurance, to pay for altering terms unilaterally

Ever been in a situation where your policy regulations said something when you bought them and suddenly at the time of redemption, you are told that terms were ‘changed’?

Unbelievable as it sounds, this is surprisingly common. Hidden in indecipherable fine print of most policy terms is the insurer’s right to change the policy regulations. Insurers surreptitiously change the policy terms at the time of the renewal and the result more often than not is a very surprised..scratch that..shocked consumer!

This is what precisely happened to a consumer in Mumbai who was admitted in Ashwini Ayurvedic Hospital at Borivali from May 3, 2007 to May 24, 2007, for which she was billed Rs 77,050. In addition, she had spent Rs 3,432 for medicines. She claimed these amounts under her mediclaim policy issued by United India Insurance, but the company rejected it, stating ayurvedic treatment was not covered under the policy. This despite the fact that similar claims had been honoured in the past by the Company.

The aggrieved consumer filed a complaint with the Mumbai Suburban District Consumer Forum which held this conduct of the insurance company was arbitrary. The Forum also observed the policy excluded only claims in respect of naturopathy treatment. There was no clause which excluded claims for ayurvedic treatment. The Forum directed the insurance company to pay the entire claim amount of Rs 84,491 along with nine per cent interest and Rs 5,000 as costs.

The most crucial aspect of this verdict was the fact that the consumer had challenged the change in the terms and conditions and claimed that the policy ought to be renewed on identical terms contracted when the insurance first came into existence. On the other hand, the insurance company claimed it was yearly contract and it had a right to change the policy conditions.

The forum, relying on the judgment of the Supreme Court, in the case of Biman Krishna Bose v. United India Insurance held the terms and conditions of the policy could not be unilaterally changed at the time of renewal and that renewal would have to be on identical terms and conditions as embodied in the original policy when it was first issued.

A commendable verdict and a crucial one with respect to curbing the surreptitious practice of unilaterally altering the terms and conditions of the policy without the consent or knowledge of the policy holder.

Insurers have to inform policy holders about change in terms (Business Standard)