If I insure my car only for third-party policy, what exactly will it cover?
Nimisha Sarang asked:

In insurance parlance, third party essentially means anyone other than the insurer and the insured. Therefore, when you go for third-party insurance, you virtually obtain a cover on the property and life of third parties.

Third-party insurance on your car will not only cover the damages to your car, but will meet your liability towards a third party in case damage is caused to property, and injury or death has resulted from an accident involving your car. Whereas the liability cover towards third parties in case of injury or death under the standard policy is unlimited, the cover for damage to the property of third party is limited to only Rs 6,000. However, by paying a nominal premium, the third-party property damage cover can be increased to Rs 7,50,000.

I have just opened a small shop and want adequate insurance for it. What kind of schemes are available for shopkeepers and what type of cover should I get?
Hemant Jain, email

Basically, the risks you need to cover will depend on the nature of your business. For example, if you deal in cash, you may need covers like cash in safe or cash in transit. The nature of stock is another important consideration while opting for a cover.

The best approach would be to look at the shopkeeper’s package policy, and pick and choose the risks which are applicable to your business. Like a householder’s package policy, a shopkeeper’s policy offers to cover a host of perils to which a shop is exposed. Apart from covering the risks of fire and other calamities (such as loss due to flood, storms, lightning, earthquake, impact damage by a vehicle or an animal), burglary and house breaking, the policy also covers cash (in the counter, in safe or in transit), liability towards employees, breakdown of equipment, plate glass fixed in the shop, loss caused by the infidelity of the employees, etc.

You would also have the option to choose the limits of liability under each section, according to your specific requirements.

My cousin, who was working with a private company, met with an accident and died. His company had taken a personal accident policy for him for Rs 4 lakh. In addition, he was also holding a personal accident (PA) policy for Rs 5 lakh. Under which policy, should his family lodge the claim?
S.C. Choubey, email

The legal heirs to your cousin can make a claim under all the valid PA policies as on the date of accident leading to the death of the insured. The reason for this is that unlike most other general insurance products, personal accident insurance is not a contract of indemnity––human life is invaluable and no amount of money can compensate for the death or disablement of a human being.

Therefore, the family of your cousin is entitled to receive the sum insured under both the policies.

I was going out of the station when two of my bags containing valuables were stolen from my car, which was parked then. All the contents were covered under my householder’s policy. Will my claim be entertained by the insurers even though the contents were stolen from outside the house?
Binita Tiwari, email

It depends on the coverage provided under the householder’s policy. If the contents are covered under Section 2 of the policy against the risk of burglary and house breaking, the coverage is limited to the premises only. In that case, the underwriters will not entertain the claim.

However, if the valuables are covered under Section 3 for ‘All Risks’, the cover is valid anywhere within the geographical territory of India.

Therefore, the claim will be payable provided, of course, there is no violation of the conditions stated in the policy document.

I gifted my flat to my sister and it was transferred in her name through a family transfer. The flat is insured in my name. Can I also transfer the fire policy in her name, or will she have to purchase a new one?
Kumud Biswas, email

Your sister will have to get the house insured again, under a fresh insurance policy, in her own name. This is because there is no provision available in the fire tariff to transfer an insurance policy on an immovable property.

Since the property now belongs to your sister, in terms of insurance, you no longer have an insurable interest in it. Therefore, the existing policy does not have any meaning. It is, therefore, best to get the policy cancelled, claim the refund, if any, and get a new policy issued in your sister’s name.

My employers are considering a ‘kidnap-and-ransom’ policy for all senior managers. What is this policy, and how does it operate?
Sitaram Mahato, email

Kidnap-and-ransom policies offer financial protection to individuals from kidnapping, extortion, wrongful detention and hijacking.

The standard cover includes death or dismemberment benefits arising from a covered incident, ransom/extortion payment, loss of payment in transit, judgment, settlements and defense costs, recall costs, business interruption and 24-hour emergency response helpline and related expenses.

Usually, this cover is opted by companies for employees posted in risk-prone areas. There is no restriction with regard to the offer of the cover. Any individual who believes he needs the cover can go for it.

Normally, these policies come with a non-disclosure clause which means that the policyholder must not disclose to anyone that he is holding such a policy.

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