The Insurance Regulatory and Development Authority (IRDA) has come up with guidelines for issuing insurance policies electronically.

Insurance companies can now sell all kinds of insurance – life and non-life – directly from their websites, and electronic policies will be considered fully legal contracts. But insurers need to set up a qualified repository.

“The objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in an electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy,” the regulator said.

IRDA also stressed that insurers must safeguard the privacy of the data maintained and introduce measures “to prevent manipulation of records and transactions”.

The full guidelines can be found here.

Although the terminology differs somewhat from country to country, the basic ideas of main insurance products such as car insurance and home insurance are universal.

Still, many people still feel that insurance is a complicated topic. The good news is that there are many useful online guides to insurance. Among the newest additions is one by the Financial Consumer Agency of Canada (FCAC), “Understanding Insurance Basics”.

This publication provides a definition of insurance, and explains how it works and why we might need it. So if you still find yourself asking the question “what is insurance?” then have a look at the guide.

There are numerous kinds of travel insurance plans to choose from. But if you take the time to study the choices closely, it can save you a lot of money.

First of all, you should know why you want travel cover in the first place. Is it primarily because you may need to cancel a trip you have planned and want to be compensated? Or maybe you want to be sure you can avail of medical services if you have an accident or get ill while abroad?

Most insurance companies offer travel insurance as either a single trip or multi trip. The single trip cover is for one specific travel, while the multi trip policy will cover all of your travels and holidays during a specified period, normally a year.

Be sure that your product has the features that you need. Otherwise, you can probably buy them for an additional fee – the so-called “riders”.

On the other hand, you should not “overinsure” by paying for a lot of features that you are very unlikely to use. If you are young, you may not focus much on medical cover, unless you are going on a skiing holiday where accidents happen…

If you already have a health insurance or an accident insurance, travel insurance may also be available as riders on your existing policy.

As always with insurance policies, the fine print looks boring. But it really is crucial to take the time to read it in order to ensure you get exactly what you want so you can enjoy your travels no matter what.

There are many thing you have to consider before you decide what kind of life insurance cover to buy. Life insurance is a rather complicated matter, and there are many different products to choose from.

The first thing to do is look at what stage in life you are at, and what the main purpose of a life insurance would be. Do you have family you want to protect in case of your death or dismemberment? Maybe you want a plan that gives you a lump sum even if you live on throughout the policy tenure? Or is an endowment plan with regular payments during your senior years the way to go?

You also have to take into account if you want your life insurance to be linked to investment in securities, and if so, what kind of investments. And will the projected return on the investment be eaten up by inflation?

It is also important to see if buying a cover will give you tax deduction privileges.

If you already know what type of life insurance you want, the next step it to avoid becoming underinsured or overinsured. There are different estimates as to how much cover is just right, but as a general rule your loved ones should get at least 40 times the annual premium in case of your demise. At the same time, the annual premium should not be more than eight percent of your annual income.

Before you buy the cover, make sure that you are purchasing from a licensed company, agent or broker. And it really is paramount to read all the small print of the policy to be sure you and your family are not left worse off than you thought.

With the emergency of a lively Indian insurance market since the liberalization in 2000, quite naturally the number of insurance consumer complaints has also grown.

If you are a policyholder who is unsatisfied with your relationship with your insurer, it is important that you know your rights.

The first step is always to contact the insurance company. They will have customer grievance redressal procedures. Some of them, such as Bharti AXA, have the procedure published on their website.

If you are still not happy with the outcome, you can contact Insurance Regulatory and Development Authority (IRDA). One of the main purposes of the government insurance regulator is to protect consumers. Among the rights that IRDA stresses insurance customers should know are:

• A claim has to be paid or disputed by the insurance company, giving relevant reasons within 30 days of receiving all relevant documents.
• The insurer shall furnish the prospect, a copy of the proposal form, free of charge, within 30 days of the acceptance of a proposal.
• Proposals shall be processed and communicated within 15 days of receipt by the insurer.
• In case of delay in settlement of claim after submission of all necessary documents, the insurance company will be liable to pay a stipulated amount of interest.
• A life insurance policyholder is entitled to a “free look period” of 15 days (from the date of receipt of policy) to cancel the policy.
• An insurance company shall respond within 10 days of receipt of any communication from its policy holders.

A third administrative option – before maybe taking the dispute to the civil courts – is filing a complaint with the Insurance Ombudsmen.

The US-based Insurance Information Institute (III) has conducted a survey that shows many policyholders do not know enough about their insurance products.

The institute has therefore complied a list of the five biggest mistakes Americans make when they buy insurance. These mistakes might lead to costly underinsurance and should therefore be avoided. The most common mistakes are:

• Insuring a home for its real estate value rather than for the cost of rebuilding. When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings. A better way to save: Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your premium payments.

• Selecting an insurance company by price alone. It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service. A better way to save: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations. You should select an insurance company that will respond to your needs and handle claims fairly and efficiently.

• Dropping flood insurance. Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. Many homeowners are unaware they are at risk for flooding, but in fact 25 percent of all flood losses occur in low risk areas. Furthermore with the significant snow fall this winter, spring related flooding may be particularly severe, thus increasing the importance of purchasing flood insurance. A better way to save: Before purchasing a home, check with the NFIP to determine whether the property is situated in a flood zone; if so, consider a less risky area. If you are already living in a designated flood zone, look at mitigation efforts that can reduce your risk of flood damage and consider purchasing flood insurance.

• Only purchasing the legally required amount of liability for your car. In today’s litigious society, buying only the minimum amount of liability means you are likely to pay more out-of-pocket if you are sued—and those costs may be steep. A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.

• Neglecting to buy renters insurance. A renters insurance policy covers your possessions and additional living expenses if you have to move out due to an insured disaster, such as a fire or hurricane. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue. A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings.

Third party car insurance is mandatory by law in India. So the question is not whether you should buy motor insurance, but rather which insurance is best for your automobile vehicle.

It is not good to be underinsured, but neither is overinsured. And striking the right balance can be difficult with so many providers to choose from.

If you buy a comprehensive cover, in most cases you will be safe in case anything happens to either your own car or another car that you encounter in an accident.

But often there is money to save if you take some precautions. First of all, install a certified anti-theft system in your car. This will give you a rebate on the premium.

You can also chose to increase the so-called voluntary excess and thereby decrease the premium. The voluntary excess is an amount – for example 20 percent of the claim – that you will have to shoulder yourself in the case of a claim made.

If you have had no claims during your first full year, you will also be eligible for a lowered premium the following year. And with the new “pay-as-you-go” type covers, the first year will show your driving habits, and annual premiums thereafter will be based on these habits.

Besides saving on your premium, you may also want to expand your insurance cover with a host of add-ons, or so-called riders. For example, your auto insurance might include compensation for medical expenses following a road accident or cover for your personal belongings in your car.

With the large increase in the number of companies offering insurance products, it is important that consumers do proper research before buying cover.

If you decide to buy from an agent or broker instead of directly from the insurance company, make sure that they are indeed authorized to sell insurance products. Agents operate on behalf of a specific insurer, while brokers help customers select insurance products from all available insurance companies.

Insurance brokers must be licensed by the Insurance Regulatory and Development Authority (IRDA), and you can check a list of authorized brokers at the website of the Insurance Brokers Association of India (IBAI).

If you have already purchased an insurance product and feel that you have not been treated fairly after making a claim or otherwise, the first thing you should do is contact the company or broker to present your view.

In case this does not produce a satisfactory result, you can contact the IRDA consumer affairs department by the following means:

The IRDA is also working on a system that would facilitate the handling of consumer complaints online.

Another option is to contact one of the currently 12 Insurance Ombudsmen appointed by the Ministry of Finance.

The ombudsmen have a mandate to deal with complaints from private insurance policyholders who are insured for less than Rs.20 lakhs. You may find a list of their contact details at the Ministry of Finance.

Since the opening up of the Indian insurance market in 2000, there has been a boom in the number of players. There are now almost 40 licensed insurance companies offering cover to individuals and companies.

But what are the largest insurers in the country? According to the 2009-10 figures from the Insurance Regulatory and Development Authority (IRDA), Life Insurance Corporation of India (LIC) is overwhelmingly the largest life insurance company based on total premium income. The public corporation had a market share of just over 70 percent, while the remaining almost 30 percent were spread among private insurers.

When it comes to non-life (general) insurance companies, IRDA provides more detailed statistics. Below are the market shares of the four state-owned and 13 private non-life insurance companies (the figures do not include specialized insurers and pure health insurance companies):

• New India: 17.45 percent
• United India Insurance: 15.13 percent
• Oriental Insurance: 13.68 percent
• National Insurance: 13.36 percent
• ICICI Lombard: 9.52 percent
• Bajaj Allianz: 7.17 percent
• Reliance: 5.72 percent
• IFFCO-Tokio: 4.21 percent
• Royal Sundaram: 2.64 percent
• HDFC Ergo: 2.64 percent
• Tata AGI: 2.47 percent
• Chola MS: 2.27 percent
• Shriram: 1.20
• Future Generali: 1.09 percent
• Bharta AXA: 0.90 percent
• Universal Sompo: 0.55 percent
• Raheja QBE (just started operations): 0.00 percent

Although the insurance industry in India is booming these days, getting insured is far from a new thing. The first insurance companies arrived almost two centuries ago, but insurance has been around for a much longer time than that.

The idea of insurance – pooling resources to use in times of calamity – are mentioned as early as the writings of Manu (Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya (Arthasastra ). And ancient Indian history show traces of insurance such as marine trade loans.

Insurance as we know it today is heavily influenced by England. The first life insurance company in India was the Oriental Life Insurance Company, which was set up in 1818. While it only managed to survive for 16 years, other companies slowly began to appear.

The Madras Presidency got life insurance company Madras Equitable in 1829, and the British Insurance Act of 1870 was followed by the establishment of another three insurance companies: Bombay Mutual in 1871, Oriental in 1874 and Empire of India in 1897. At the same time, foreign operators such as Albert Life Insurance and Liverpool and London Globe Insurance began to do brisk business in India.

The life insurance industry in India first came under regulation in 1912 with the Indian Life Assurance Companies Act. This and other acts were replaced by the Insurance Act in 1938.

By 1950, there were many companies active in the Indian life insurance market, and there was a high level of competition among insurers. However, following allegations of unfair trade practices, the government in 1956 decided to nationalize the industry.

This led to the creation of Life Insurance Corporation (LIC), which was made up of no less than 245 Indian and foreign insurers. The LIC, which still today is a major player in the insurance business, enjoyed a monopoly until the late 90s when the sector was finally re-privatized.

General insurance (also called non-life insurance) in India has an equally interesting history. The first general insurance company was Triton Insurance Company set up by the British in 1850 in Calcutta. As more companies followed, in 1957 the General Insurance Council was set up with the aim of establishing a code of conduct and sound business practices.

As with life insurance, general insurance was nationalized as well, but not until 1973. A total of 107 general insurance companies were transformed into four companies, all of which are household names today: National Insurance Company, the New India Assurance Company, the Oriental Insurance Company and the United India Insurance Company. At the same time, the General Insurance Corporation of India (GIC) was set up as a holding company.

The insurance market was open for free competition from 2000, following the establishment of the Insurance Regulatory and Development Authority (IRDA). Foreign companies were allowed to hold up to 26 percent of Indian insurance companies, and later that year, the subsidiaries of GIC were restructured as independent companies and GIC became a national re-insurer.

Today, most Indian insurance companies do indeed have foreign partners with strong financial backgrounds. The insurance market is growing at a breathtaking pace, and with the country’s ongoing economic development, this trend is bound to continue.

Source: IRDA