What is insurance?
Insurance is a contract between two parties insurer and insured in which one party (the insurer, in return of the certain and agreed amount of money, called the premium), assure the other party (the insured) to make good any financial loss. The insured may suffer as a result of the occurrence of the specified, insured, and unforeseen events (perils) that take place within the period described in the contract.
How many types of insurance are there in the market?
There are two types of insurance in the market, namely Life Insurance and Non-Life or General Insurance. Life Insurance provides cover for human and human-related things. Premier Insurance Company (Nepal) Limited only issues Non-Life Insurance.
What is Non Life Insurance?
Non-Life or General Insurance provides cover for all the rest (house, warehouse, industry, vehicle, etc.) apart from that covers in Life Insurance. However, Personal Accidents, Personal Medical, Third Party Liability, Production Liability, Travel Trip are also covered in Non-Life Insurance. The nature of Non-Life insurance cover is normally short term, such as one year.
What does underwriting mean?
Underwriting is the function of evaluating the subject of insurance, whether a person, property, profession, business, or other entity, and determining whether to insure it. The underwriter must apply company standards to each applicant and, base on these standards, ascertain whether the application represents an acceptable risk. Underwriting is the foundation of the insurance transaction process.
What is Risk?
The possibility of financial and physical loss.
Who is insurer?
The party to an insurance arrangement who undertakes to indemnity for losses.
Who is insured?
A person whose interests are protected by an insurance policy.
What is sum insured?
Declared value of assets or property.
What is premium?
The financial cost of obtaining an insurance cover paid as a lump sum during the duration of the policy.
What is policy?
Written contract or certificate of insurance.
Difference between insurance and Re-insurance?
Insurance is basically covering risk against adversity. Insurance is where insurance companies cover the risk of the general public through different lines of business and types of products for which they charge a premium amount from the customer for the coverage period.
Re-Insurance is a company that provides insurance for Insurance companies or in other words shares the risk with the insurance company and also shares the premium amount received. So, for example, customer A has bought a policy with Insurer X who has been Re- Insured by Y. Now when A pays X the premium, X will give a % of the premium to Y. similarly, tom if A were to file a Claim with X, X would pay A the sum assured post which Y would pay a% of the sum assured to X.
What is the purpose of filing up the proposal form?
The purpose of the proposal form is to get information from the insured to issue an insurance policy. The information is as followed:
· Name & Address of proposer;
· Details about the proposed properties, persons, liabilities, etc;
· Location, Transit route, etc. of proposed;
· Property, profession age, etc. of proposed persons, nature of business for liabilities, etc;
· Proposed Value, Limit of liabilities, Sum Insured, etc. for the insurance;
· Risks required;
· Period of insurance;
· Past insurance and claim record…..etc
When does coverage become effective?
As per the Insurance Act without the payment of premium, the insurance policy will not be valid Therefore after paying premium against the Risk, the coverage becomes effective. The liability of an insurance company does not commence until the proposal has been accepted by the company and the premium is paid.
What is deductible?
A deductible is an amount you’re responsible for in the event of a covered loss. In most covered loss. In most covered loss cases, you are responsible for any amounts up to your deductible level and your insurance would cover anything beyond that up to your coverage limit.
How do I report a claim?
What are the duties of insurance policy holder?
The insurance policyholder should check the “Policy Schedule” for the confirmation of the insured name, the policy period, property/person/liability insured, risks covered, premium, special exclusions, etc and “Policy” for terms, conditions, exclusions, warranties, limitations, etc. The insurance policyholder should also check the premium calculation.