MOTOR INSURANCE CONTRACT

MOTOR INSURANCE
BURGLARY AND PERSONAL
ACCIDENT INSURANCE

Motor insurance got recently a great momentum. In the older times,

persons, who were injured or killed through the negligence of the
motorists, could not get financial redress either to them or to their legal
heirs because no scheme of insurance was present at that time. To
mitigate the financial hardship caused to the persons, the Motor
Vehicles Act, 1939, as amended from time to time, has made it
compulsory for the motorists to insure against the risk of liability to
third parties.

The rate of premium is standardized because the business is tariff.

No insurer can charge lower rates than tire tariff rates and no insurer
can grant benefits exceeding than those prescribed by the tariff.

Vehicles for the purpose of insurance are classified as below:—

(i) Private Cars (not used for carrying passengers for hire or
reward).

(ii) Commercial vehicles such as goods carrying vehicles,

passenger vehicles, tractors and others.

(iii) Motor cycles, scooters and auto cycles.

KINDS OF POLICIES

The policies under motor insurance are as follows:-

(i) Act Liability only.

 (ii) Third Party only.
(iii) Comprehensive Policy.

1. Act Policies

This policy is designed to meet the requirements of Motor Vehicles

Act, 1939, which provides for compulsory insurance in regard to
liabilities arising out of use of motor vehicles in a public place. This
kind of policy is limited to bodily injury or death of the third parties.
Section 95 (2) of the Motor Vehicles Act lays down that a policy of
insurance shall cover any liability incurred in respect of any one
accident up to the following limits:

(i) Goods Vehicle: Rs. 50,000 in all includes the liabilities if

arising under the W.C. Act, 1923, in respect of death of or bodily
injury to employees (other than the driver) not exceeding six in number
being carried in the vehicle. This means that liabilities if any towards
driver and employees (above six) being carried in the vehicle under
W.C. Act in addition to Rs. 50,000.

(ii) Passenger Vehicles: Vehicles in which passengers are carried

—

(a) For hire or reward.

(b) By reason of or in pursuance of contract of employment.

(1) in respect of persons other than passengers carried for hire

or reward-Rs. 50,000 in all.
(2) in respect of passengers-

Rs. 50,000 in all where the vehicle is registered to carry not more
than 30 passengers;
 Rs, 75,000 in all where the vehicle is registered to carry not less
than 30 but not more than 60 passengers;

Rs. 1, 00,000 in all where the vehicles are registered to carry

more than 60 passengers; and

Subject to the limit aforesaid Rs. 10,000 for each individual

passenger where the vehicle is a motor car (used to carry not more
than 6 passengers excluding the driver) and Rs. 5,000 for each in-
dividual passenger in any other case.

(iii) Other Vehicles: The amount of liability incurred except as

provided otherwise.

The Act policy besides the cover as required under the Motor
Vehicles Act provides for indemnification of the claimants' costs and
expenses which the insured shall become legally liable to pay as also
costs and expenses incurred with the written consent of the insurer.
The policy may extend to indemnify any driver who is driving the
motor vehicles on the Insured's order or with his permission provided,
he is not entitled to indemnify under any other policy.

2. Third Party Policy

This policy covers the liabilities of the third parties who suffered
loss in connection with the damage of property and personal injury or
death. Thus, this policy indemnifies the insured against his legal
liability in respect of damage to property of third parties over and
above Rs. 2,000, The
limit of liability is as follows :—
(a)Private Car-Unlimited.
(b)Commercial Vehicle:
 (i) Goods or passenger-carrying vehicles-Rs. 20,000.
(ii) Other miscellaneous or special type of vehicles-Rs,
50,000.

Motor cycle-Unlimited.

The policy may be extended to include:—

(a)fire,

(b) theft risks, ----

(c) Legal liabilities to persons employed in connection with the

operation and/or maintenance and/or loading and/or unloading
of motor vehicles. .
*

The private car policy extends to indemnify the insured (individual

only) against legal liabilities incurred by him subject to limitations of
indemnity whilst personally driving a private motor car. Private car
policy covers legal liability of the insured to passengers (not for hire
or reward) in the car although under the passengers (not for hire or
reward) in the car although under the Motor Vehicles Act, it is not
required to be covered. Liabilities arising while the motor car is being
used in private places are covered. The policy covers bodily injury or
death, property damage and medical expenses. Due to the
amendment to the Motor Vehicles Act, 1994, liability on third party
claims has gone up as 'No fault' liability compensation has been
enhanced and Structured Compensation has been introduced.
3. Comprehensive Policy
 The comprehensive policy covers the following risks :—
1. Damage to car parts or body.
2. Removal charges for repairs.
3. Third Party Liabilities.
4. Costs and Expenses incurred with risk.
5. Repair Charges.
6. Medical expenses.
At the payment of extra premiums, the following risks are also
insured:—
(i) Death or injury to family members who are above 16
years and below 65 years,
(ii) Riots, strikes, thefts, larceny, etc.
(iii) Loss of Rugs.

Jald Rahat Yojna (Pre-litigation Settlements) has been introduced

to help claimants to get payment of compensations without
approaching courts. Structured Compensation formula has been used
for quick settlements of claims.

PROCEDURES OF INSURANCE

The proposal form is completed for making proposal for motor

insurance. The form is divided into three parts—

(i) Identification of vehicles —registered number, horse-power,

shape and size, model, etc.

(ii) Risk-information —past insurance, type of policy got

previously, equipments, vehicles.
(iii) Declaration —The declaration of true and full statement of
the questions is made at the end of the policy.
Rating the Motor Insurance
Since the motor insurance is subject to tariff, basic premium is
determined by the tariff association. Additional premium is added to
the basic premium on the basis of shape, size, horse power, use, value
of the motor car, etc. The higher the risk, the more will be the amount of
premium. Rebate in premium is allowed if the insured has more than
one car, is a member of Automobile Association and there was no loss
in the previous years. The car was under the personal use and care of
the owner.

Issue of Policy
As soon as the proposal form is accepted, cover note is issued.
The cover note is a certificate of insurance although it cannot be used
as a proof of insurance in a court of law. As soon as the policy is
issued, the cover note is cancelled.

Term of Insurance

The motor insurance policy is issued generally for one year.

However, the policy can be issued for less than one year but the
premium rate will be higher, e.g., the premium rate is three-fourths of
annual premium of the policy issued for six months.

Additions of Benefits

During the currency of policy, after payment of extra-premium

additional benefits can be added
to the original policy. Thus additional risks can be included to the
original policy.
Change of Vehicle

The insured vehicles can be disposed of along with the policy. The
term of policy will remain the same. The policy will continue up to the
unexpired period with the purchaser of the car. Similarly the insured
can replace another car under the same policy.

Furlough Concessions

When risk is reduced, the proportionate share of premium is

returned or the period of coverage is extended by the excess premium.
This is called 'furlough concessions'.

Settlement of Claims
As soon as the damage occurs, notice of that is given to the insurer.
The evidence or eyewitness should be placed to the insurer. When the
insurer is satisfied with the notice and evidence, he can issue claim
form which is returned to the insured after completing it in all respects.
Personal injury is also made in connection with the personal injury,
damage to property, defence and prosecution.

Negligence of the Parties

The insurer will pay the amount of liability only when the insured
is at negligence. In other words, the insurer shall pay only when the
insured not legally liable for indemnification to third party.

Knock for Knock Agreement

This clause says that the liability of the insurers will be limited
only to the liability to the insured. In this case the third party
liabilities do not arise.
Halving Agreement

Under this agreement the loss of both partners (insured) and third
party and is equally divided amongst the insurer.

Private Car

Cover is granted against the loss of or damage to motor car and its
accessories whilst thereon,
anywhere in India, caused by any of the following perils:—
: Accidental, external means
1. Fire
3. External explosion
4. Self-ignition
5. Lighting .
6. Frost
7. Burglary, house breaking or theft, and
8. Malicious act.

The cover is also operative whilst the car is in transit by road, rail, in
land, waterway, lift or elevator.

The following are excluded,

(0 Consequential loss;
(ii) Depreciation;
(Hi) Wear and tear; and
(iv) Mechanical or electrical breakdowns, failures or breakages.

Damage to tyres is ordinarily not payable. If, however, the insured

car is also damaged at the Isame time, the damage to tyres is payable
but the amount payable in that event is limited to 50% of (the cost of
replacement of the tyres. The exclusion applies to damage to tyres and,
therefore, losses lof tyre due to theft is payable.

If the motor car is disabled as a result of damage covered by the

Policy, the insurers bear a (reasonable cost of protecting the car and
removing it to the nearest repairs, as also of redelivery to pe insured.
The amount so borne by the insurers is limited to Rs. 150 in respect of
anyone accident.

Normally, repairs arising out of damage covered by the policy can

be carried out only after [they are authorised by the insurers. In terms
of this section of comprehensive policy, the insured [may authorise
the repair to the car provided that—

(a) the estimated cost of such repair does not exceed Rs. 300;
(b) the insurers are furnished forthwith a detailed estimate of the
cost; and
(c) the insured gives the insurers every assistance to ensure that
such repair is necessary and
that the charge is reasonable.

Section II
It provides for the cover in respect of liability to the third parties.

[Section III
If any bodily injury is caused to the isured or to any occupant of the
motor car by violent accidental, external and visible means as the direct
result of an accident to the motor car, and if the Insured incur medical
expenses for the treatment of such injury, the medical expenses
reasonably Incurred by the insured in this behalf are reimbursed to him,
subject to a limit of Rs. 350 in respect of lay accident. A notable feature
of this provision is that insured car must meet an accident in order to
attract the benefit.

General Exceptions
The insurer is not liable under the policy in respect of—

1) Any accident, loss, damage and liability caused, sustained or

incurred outside the Geographical area specified in the schedule of the
policy, i.e., India. On request it can be extended to Nepal, Sikkim lad
Bhutan.

2) Any claim arising out of any contractual liability. If, however,

the liability arises independent 9f the contract, the claim is payable.

3) Any claim arising whilst the vehicle is being:

a. Used otherwise than in accordance with the limitations as to
use specified in the schedule of the policy; or

b. Driven by any person other than a driver described in the

schedule of the policy.

4) Any claim arising after any variation in or termination of the

insured's interest in the vehicles.

5) Any claim directly or indirectly arising from—

 Ionizing, radiations or contamination by radio-

activity from any nuclear waste from the combustion of
nuclear fuel.

 Nuclear weapons material.

 Flood, typhoon, hurricane, volcanic eruption,

 earthquakes or other convulsions of nature.

 War, invasion act of foreign enemies, hostilities

or war-like operations, civil war, strike, riot, civil
commotion, invasion, rebellion, military or usurped
power.

 Driving of the car under the influence of

intoxicating liquor or drugs.

6) This does not cover use for hire or reward or gaining, pace-
making, reliability trial, speed testing, the carriage of goods
(other than samples) in connection with any trade or business or
use for any purpose in connection with motor trade.

Extra Benefits
The policy may be extended to cover the following extra-benefits on
payment of additional premium:

1) Accidents to insured or any named person (not less than 16 not

more than 65 years of age) other than a paid driver or cleaner. This
provide for specified scale of benefits in the nature of personal
accident cover.

2) Accidents to insured and wife. Benefits and limits are similar to

(i) above. In the event of both the insured and his wife being in
the same car at the time of an accident the benefits will apply to
insured and his wife to the extent of 50% only.

3) Accidents to unnamed passenger other than insured and his paid

driver or cleaner. The benefits and age limits are similar to (i)
 above.

4) The legal liabilities to employees of the insured who may be

traveling in or driving the employer's car (other than paid
drivers).

5) Business use by fellow employers. The policy extends to

include use by persons other than insured for the business of the
insured's employer and to indemnify such person. The additional
premium depends upon whether use of one named person or
use by unnamed is desired.

6) Accident to Soldiers/sailors/airmen employed as by officers in

their private capacity.

7) Trailers: Trailers may not be the insured separately and the

cover on the trailers must correspond to the cover on the car.

8) Riot and strikes.

9) Earthquake (fire and damage).

10) Flood, inundation, typhoon and hurricane.

11) Rugs, coats and luggage.

12) Legal liability of passengers for acts of negligence; and

13)Reliability trials and rallies.

Commercial Vehicles

The following points of difference between this policy and private car policy
comprehensive policy should be noted :—
(a) Loss of or damage to the vehicle and its accessories whilst
thereon is not covered.
 (ii) If loss or damage is due to overloading or strain or by
explosion of the boiler or the motor vehicle.

(b) Loss or damage to accessories whilst on the vehicle is covered

against the risk of burglary, house-breaking or theft only if the vehicle
is stolen at the same time.

(c) The insured can authorise repairs if estimated cost of repairs

does not exceed Rs. 150 (against Rs. 300 in the case of Private Car).

(d) There is a compulsory excess for each and every claim in

respect of goods carrying vehicles, taxis or private car type vehicles plying
for public hire and public passenger service vehicles, buses and
motorised rickshaws.

(e) Loss of or damage to tyres, lamps, bumpers, mudguards and

painting of vehicles is not covered except in case of total loss.

Application of limit of Indemnity

It is provided that if out of an accident indemnity is available to

more than one person the limit of indemnity prescribed by the policy
applied to the total of the amounts payable to all eligible persons and if
the limit is less than the total of the amounts due, the insured will have
priority in indemnification. For example, if an indemnity of Rs. 40,000 is
due to the insured and of Rs. 20,000 to some other person against a limit
of Rs. 50,000 under the policy, the insured will be paid Rs. 40,000 first
and only the balance of Rs. 10.000 will be paid to the other person.

Motor Cycle
Under this policy, following points should be noted:—
(i) The cost of removal, etc., in one event of an accident is limited to
Rs. 50;
 (ii) The amount up to which the insured is authorised to repair is
specified at Rs. 50; and

(iii) The policies covering motor scooters are made subject to an

excess of Rs. 50 for each and every claim.
The liability in respect of death or bodily injury to any person being
conveyed in or on the motor cycle is excluded. Such liability is, however,
covered if the said person is being conveyed by reason of or in pursuance
of a contract of employment in terms, and subject to, limitation of
indemnity. Under this section the insured individual is indemnified
whilst personally driving a motor cycle not belonging to him and not
hired to him under a Hire Purchase System. The extension, however, is
not available for policies issued .in respect of auto-cycles or
mechanically assisted pedal cycles.

Extra Benefits

The following extra benefits may be granted on payment of

additional premium:

(a) increase in the limit of indemnity for liability to public risks

can be effected;

(b) full liability under Workmen's Compensation Act, 1923, Indian

Fatal Accidents Act or at Common Law for accidents to paid driver,
cleaner or conductor can be covered on payment of extra annual
premium per head of Rs. 5; and

(c) in the case of vehicles plying for hire—(i) legal liability for
loss or damage to goods caused by accident whilst being conveyed on
the insured vehicle can be covered; (ii) Fire risk whilst vehicle is
garage can be covered.
Underwriting Considerations

Relating to the insured and driver: The insured himself presents a

great hazard in Motor insurance; he is likely to be the principal driver,
particularly in private cars. Besides he will have a good deal of
influence in the selection of other drivers. If the insured is a firm, the
underwriter may have to examine the policy of the proposed firm in
the matter of selection of drivers.

The business or profession of the insured is another important

consideration, because this would show how, where and to what
extent the vehicle will be used.

The nationality of the proposer is an underwriting consideration

because—
(i) Foreigners are not accustomed to the local road and traffic
conditions ;
(ii) It is not always possible to ascertain their (insurer) history
and driving experience;
(iii) In the event of an accident, they may not be available when
they are required as witnesses for their own defence; and

(iv) Language difficulties may make them unsatisfactory

witnesses.

Age of the driver is also important as very young persons are prone
to accident as well as very old persons. The physical condition of the
driver should also be considered when underwriting the risk. All
convictions for drivig offences are also material facts and must be
reported to the insurers. The underwriter may ignore a series of
convictions for minor offences but may take serious note of a single
conviction for a major and dangerous offence. Drunken drivers have
always been posing a serious problems to the underwriters;

After examining the proposal and assessing the risk, the

underwriter will decide on any one or more of the following lines:—

(i) accept the risk at normal terms,

(ii) increase the premium,

(iii) impose a compulsory excess in respect of each and every loss,
under one or more sections of the policy,

(iv) restrict the cover to third party, fire and theft risk only,
(v) restrict the cover to third party risk only,
(vi) restrictthe cover to act liability only, and
(vii) decline the risk. The declinature is, however, resorted to in
exceptional circumstances only.

Burglary Insurance
Burglary Insurance is one of the major classes of business
underwritten in the miscellaneous department and accounts for a
sizeable portion of the department's premium income. For the
business house Burglary insurance is as essential as Fire
insurance, as it enables them to recoup the losses suffered by
 them consequnt on burglary or house breaking. In addition to the
burglary policy, oth-jr types of policies giving wider covers have
also been devised by the burglary department.

The main types of policies

are as follows

(i) Business Premises

Policy, (ii) Private
Dwelling Policy,

(v) Money in Transit

Policy
Definitions

Burglary

The criminal law of the country does not speak of an offence called
burglary. Hence it becomes necessary for the insurers to lay down in the
policy the definition of the term. As normally understood burglary is—

(a) Theft of property from the premises following upon entry of the said
premises by violent and forcible means, or

(b) Theft by a person in the premises who subsequently breaks out by

violent and forcible means.

Theft

Indian Penal Code in Section 378 defines theft as follows: "whoever

intending to take dishonestly any movable property out of the possession
of any person without the consent of that person or of any person having
for that purpose authority, moves that property in order to such taking is
said to commit theft."
House-breaking
The word in practice is equal to 'Burglary'. Section 445 of the Indian
Penal Code has laid down a definition of the term. A person is said to
commit housebreaking who commits house trespass if he effects his
entrance into the house (or any part of it), or if being in the house (or any
part of it) for the purpose of committing an offence, or having ©bmmitted
an offence therein he quits the house, such entrance or exit being made by
use of force in one of the six ways as described in the Indian Penal Code.

Coverage
Business premises are generally covered against burglary and house
breaking only. Mere theft
without the use offeree and violence is not covered, robbery and dacoity
being aggravated forms of
theft. Burglary and house breaking fall within the scope of this cover.
Under policies issued for
private dwellings, the contents are covered against burglary, house-breaking
and theft risks. Similarly
jewellery and valuables are also insured in the same manner.___

Money in transit

Policies, as a matter of rule, cover robbery, hold-up and dacoity in

addition to burglary, housebreaking and theft.

Business Premises Insurance Policies

Policies issued to business premises cover stock-in-trade, goods in
trust or on commission, fixtures and fittings, tools of trade such as
typewriters, calculators and other similar property and cash and currency
notes in locked safe against the risk of burglary and house-breakiijg. In
regard to stock-in-trade and other goods the policy may be issued on full
value basis or on "first loss" basis.

A "First Loss" Policy insures the property up to a specified amount

only which is calculated tc
be the maximum likely loss on any one occasion. This type of policy
is taken where a total loss is s I physical impossibility. First loss
policies are usually taken for bulk commodities. 1'he amount insurec I
is always specified as a certain percentage of the full value, say, 10%
or 12.5% of the full value.

The amount of premium-loss reinsurance was Rs. 16.60 crores by

New India in 1994-95. It has
got profit of Rs. 12.12 crores in that year.

All Risks (Jewellery and Valuables) Insurance

Policies under this form of insurance cover risks in respect of
jewellery, plate, watches, personal
ornaments and other valuables. Loss or damage by any accident or
misfortune including fire, theft. I robbery from the person, defective
settings or fastening and. accidental damage are thus covered, I The
policies do not, however, cover loss or damage:
(i) occasioned by or in consequence of war, invasion, act of
foreign enemy, hostilities, civil
war, nuting, rebellion, revolution, insurrection, military or usurped
power, riot, civil commotion, I earthquake or other convulsions of
nature;
(ii) caused by or arising from any process of repairing,
restoring or, renovating any property
insured;
(iii) due to moth, wildew, wear or other deterioration or inherent
defect in any property
insured. The insurance is applicable in all places within the
geographical limits provided for in the I policy.

Exceptions
The exceptions peculiar to a burglary (business premises) policy
are>
(i) loss or damage where any member of the insured's house-
hold or his business staff is
concerned as principa 1 or accessory or resulting from any act
committed by any other person lawfully on the premises wherein the
property may happen to be;

(ii) loss or damage which can be insured against by a fire or a

gross or a motor insurance
policy;
(iii) loss of or damage to deeds, bonds, bills of exchange,
promissory notes, cash, treasury,
bank notes, cheques, securities for money, stamps, stamp collections,
books of accounts, manuscripts, [ documents of any kind and medals
and coins, unless specially mentioned and agreed to be covered.

Extension Under the Policy

An extension of the policy frequently sought is in respect of riot
and strike damage which is a common exclusion in all policies. Riot
as included in the policy is deemed to mean riot as defined in the
Indian Penal Code.
 Insurance of Money in Transit

This is a modified version of Burglary Insurance covering money

or securities in transit between the insured's premises and bank or
post office or other specified place or between the insured's (main)
premises and branch premises. The cover is granted only to
commercial and industrial establishments.

The coverage of money in transit policy

is as below :—

(a) Wages in transit from bank to insured's premises.

(b) Cash in transit from insured's premises to post office for
purchase of postal orders, money orders and postage QT Revenue
Stamps.
(c) Postal orders, money orders and postage or revenue stamps in
transit from Post Office to insured premises.

(d) Wages in transit from the insured's (main) premises to insured

branch premises.
(e) Cash other than wages in transit from Bank to insured's
premises from insured's to bank and between insured's premises and
the insured's branch premises.
(f) Cheques, bills of exchange, money orders and postal orders in
transit from the insured's premises to bank.

(g) Cash collected by employees from the time of collection during

rounds and until delivered at the insured's premises or bank on the day
of collection.

(h) Cash (other than wages) secured in locked safe when

insured's premises or closed.

(i) Cash (other than wages) contained in the insured's premises

whilst occupied for business
purposes. .

In a money-in-transit policy, two sums are significant:

(i) Limit of the insurer's liability for any one loss; and (ii)
Estimated amount in transit during the year.

Extension (Infidelity of employees)

The normal policy does not cover loss to the insured arising
through the acts of dishonesty by
the employees entrusted with the carrying of the money. The policy is
extended at additional
premimum to cover any loss to the insured of the property insured by
any act of fraud or dishonesty
committed by the employees or employees carrying the property. This
is known as 'Infidelity
Extension'.

PERSONAL ACCIDENT INSURANCE

Introduction
Personal accident insurance is one of the popular classes of
accident insurance and as a supplement to life insurance, it provides an
ideal protection against death or disability. Though the majority of the
policies still issued are to individuals, it has found favour with
employers who offer personal accident insurance benefits as a part of
the service benefits to their employees.

Due to rapid industrialization, and more and more use of

complex machinery, industrial accidents are more frequent. To cater to
the varying and increasing needs, different forms of cover are
available. Individuals are granted this cover under an individual
personal accident insurance policy. For a group of individuals, the
insurers have devised a group personal accident insurance policy.

Coverage
Personal accident policy provides for specific benefits of insured
person suffering injury, resulting in death or disablement arising solely
and directly from an accident caused by violent external and visible
means. The bodily injury within twelve calendar months (period
varies) from occurrence thereof shall solely and directly cause or result
in—
1. Death,

2. Loss by Physical Separation at or above the wrist or ankle of-

(i) both hands or feet or one hand and one foot (known as loss
of limbs).
(ii) complete and irrecoverable loss of sight in both eyes.
(iii) loss of one limb and complete and irrecoverable loss of
sight in one eye.

In these above cases capital sum insured is given.

(iv) loss of one limb or complete and recoverable loss of sight
of one eye-in this regard
50% of capital sum insured.

3. Temporary total disablement-in this respect 33% of capital

sum insured, maximum Rs.
500 per week.

features of the Policy

1. The maximum liability of the insurer is the capital sum
insured.

2. The amount of the claim is payable to the insured person or his

legal representative in case of death. Appointment of nominee is
desirable.

3. No weekly compensation shall become payable, until total amount

shall have been ascertained and agreed.

4. Personal accidents cover (other than coupon insurance) with

another insurer must be within he knowledge and written permission
of the insurer or else policy becomes void.

5. Age limits between 16 and 25 years. The upper age limit may be
relaxed in certain cases In merit.

Rating
The rate of premium to be charged depends mainly on the type of
cover desired and the insured Person's occupation. This is a non-tariff
business. The rates of premium charged by the various Insurers for
the same risk may, therefore, vary. The proposal and the policy forms
used by the arious insurers also differ widely. The rates are usually
charged per mile of the capital sum insured by the policy.

Extensions of Policy (Motor cycling)

In most parts of India, motor cycling and scooter riding have become
so common that if iccidents arising out using them are not covered, the
policy is hardly of any practical significance, piost of the insurers are,
therefore, willing to grant cover against these risks with or without
additional premium.

Exceptions
 1. War and kindered risk, riot, strike and civil commotion or
Intentional self-injury whether friminal or not.

2. Injury sustained whilst the insured person is under influence of

intoxicants or is suffering
fOm insanity. -

3. Injury occasioned by or contributed to by venereal disease or

pregnancy.

4. Flying for the purpose of any trade of technical operation or as a

member of an aircrew or any other aerial activities.

5. Hunting, stable-chasing, racing of any kind (other than one foot),

rugby, football, polo, motor cycling or winter sports, underwater pastime
or pot-holding except in so far as the company have by endorsement
agreed to extend the insurance.

Classification of Occupations

Profession or occupation is an important factor to guide the underwriter

as regards assessment of risk in each case and consequently it stands to
serve as the basis of rating. A representative classification is given as
under:

Class I — Accountants, Bankers, Member of Legal and Medical Pro-

fession, teachers, consulting engineers, mercantile
assistants and those engagd in executive, administrative,
etc.,duties.

Class II — Architects, engineers (Superintendents) only, Planters,

Salesmen and master tradesmen who supervise but do not
do manual work.
 Class III — Engineer (superintending and working), engineering
contractors engaged in manual work not involving unusual
hazards.

Class IV — Any occupation involving unusual hazards.

It is not possible to give an exhaustive list and the classification

given above is only indicative of the considerations involved.

Personal Accident and Specified Diseases Insurance

In addition to the death and disablement arising oufoof accidental
bodily injury, insurance may also provide for benefits for dis-ablement
arising out of specified diseases. This is provided by issuing personal
accident and specified diseases insurance policies. These policies contain
the usual personal accident.

Extensions
Certain diseases like maleria, influenza, etc., which are not included
in the list of diseases specified in the policy, can be included within the
scope of the cover afforded by the policy, on payment of additional
premium. The additional premium is usually charged @ 0.1 % of the
Capital sum insured for each additional disease included.

Underwriting Consideration

Underwriting involves the selection of risks for insurance. Based on the

information collected,

the underwriter has to decide to accept, particular risk and if he decides to

accept, at what premium
and on what terms. In fulfilling this task in respect of personal accident
insurance the underwriter is
guided broadly by the following considerations:
(i) age of the insured person;
(ii) health and physical build of the insured person;.
(iii) occupation of the insured person;

(iv) other pursuits of the insured person; and

(v) medical history and family history in case

cover is extended to diseases.