A Presentation on

NON-LIFE INSURANCE PROCEDURES

PRESENTED TO PRESENTED BY
MR. RAJESH KIRI SIR DEKALIYA JIGNESH (05)
RAJPUT BHARAT (17)
1.1 INTRODUCTION
Insurance policy is a legal document that sets forth in writing the
contract between the insured and the insurer.
Since it is a written contract between the two parties it should,
therefore, fulfill the essential conditions for a valid contract. These are, namely:

• Offer and acceptance. Corporate agreement being reached by the parties.

• Absence of fraud or misrepresentation.
• Capacity of the parties.
• Legality the object must be legal.

• Consideration.
1.2 WHO CAN INSURE
Every person cannot obtain a non-life insurance policy. Only persons who
are having insurable interest in the subject matter of insurance can obtain
this policy. They may or may not obtain such a policy.
3. Absolute owner of property.
4. Wife can insure property of her husband and vice-versa till such time they
are living together.
• 1/64th owners of a ship can insure ship up to his interest in the ship.
• A person can insure his life as he has interest in his own life.

(h) Under Statute

(i) Persons under a Disability
(j) An Agent
1.3 DOCUMENTS REQUIRED FOR NON-LIFE
INSURANCE POLICY
2. The Proposal or Questionnaire
This is an offer of the proposer to insurer for the coverage of his property,
interest, life or liability against certain risks against which he is exposed.
The proposal contains a declaration as follows:
“ I do hereby declare that the answers given in the proposal form are true
to the best of my knowledge and belief, and I further agree that this
proposal and declaration shall be the basis of the contract between myself
and the insurers. “
5. Cover Note
It is issued when the negotiations are on or a big risk is being pre-
surveyed by either company’s officer or the surveyor, to afford temporary
insurance protection to the insured.
7. Certificate of Insurance
The third document is used in non-life insurance policies is certificate of
insurance. (1) Open Declaration Policy (2) Marine Special Declaration
Policy
4. The Policy
The contract is normally in common form and there are no real
negotiations between the insured and the insurers about all the terms and
conditions of the policy in details.
A policy is normally divided into the following parts:
(4) Heading
(5) Preamble or Recital Clause
(6) Operating Clause
(7) Schedule
(8) Exceptions
(9) Signature
(10) Conditions
(11) Endorsements
1.4 WARRANTIES
These warranties may be either printed on the policy itself or contained in a
separate form shape which are attached to the policy.
Warranties protect the insurers against the introduction of any feature that
may increase the risk during the currency of the policy.
1.5 CONSTRUCTION OF POLICIES
The Insurance policy is a legal document and therefore, great care is
taken by the insurer to draft it, but still sometimes disputes arise about
the interpretation of the policy. The object of the construction is to find
out the intention of the parties and record them into the contract because
it is the contract in which the original suggestions of the parties have
been clearly mentioned.

5. Parol (Oral) evidence

7. Type or written word

1.6 ENDORSEMENTS
Endorsement governs the contract. They may limit or emphasize the risks
granted by the printed form of policy. They may be printed, typed or hand
written on the policy itself.
Usually endorsements are used during the currency of the policy under
following circumstances:
4. Change in insurable interest by way of mortgage or sale of the property
insured
5. Change in sum insured.
6. Change in the risk.
7. Extension of insurance to cover additional perils.
8. Change in address.
9. Transfer of goods to another location.
10.Cancellation of insurance.
1.7 DURATION OF THE CONTRACT

The policies may be issued for:

(5) A short period

(6) A period of one year
(7) Long-term policies
1.8 AMENDMENTS TO THE CONTRACT
Where identify of the subject matter of insurance is destroyed or alterered
in such a way that it no longer represents the subject matter intended to be
insured by a policy during its currency.
Conditions:-
(d) Provide that the insurers will not be liable for any loss if there is any
change in the subject matter.
(e) Require that the insurers should be notified in case of any change takes
place. Therefore, the wording of the endorsement provides that:
(i) The policy shall cease until notice is given.
(ii) The insurers are at liberty to accept or reject the alteration desired by
the insurers.
(iii) In case the alternation is accepted, the insurer can charge extra
premium or impose new conditions.
• Alterations in the Policy
• Mistake and Rectification of the Policy
1.9 ASSIGNMENT
Assignment is legally recognized passing of interest in property or in a right
from one person to another when a policy covers specific property or liability
arising from the possession of such property, the subject matter may be
assigned by the insured in two ways.
3. Voluntary
4. Through the Operation of Law, as in the Case of Bankruptcy or Death
1.10 TERMINATION OF THE CONTRACT
Once the policy is issued, it will normally continue till its expiry. However,
under the following circumstances the contract is terminated before its
expiry:
• Cancellation of Policy
4) By order of the court.
5) By destruction of subject matter.
6) By payment of total loss by the insurers.
7) By mutual consent.
8) By an assignment by the insured of his entire interest in the subject
matter.
9) By commencement of proceedings for liquidation or winding up of the
insurers.
1.11 REFUND OF PREMIUM
2. Cases where Insured is Entitled for the Refund of Full Premium
- Where the risk never attached.
2. Cases where the Insured is Entitled to Partial Refund of Premium
- In case the insurance company has gone into liquidation, the premium
for unexpired risk is refundable.
- In case of fraud on the part of the insurers.
3. Cases where Insured is not Entitled for Any Refund of Premium
- When the insured has committed fraud.
- When the contract is illegal and the insured was fully aware about it
before completion of the contract.

• Adjustments of Premium
1.12 RENEWAL NOTICE
There is no legal obligation on the part of the insurer to send renewal
notice to the insured reminding him about the expiry of his policy.

Still as a matter of maintaining good and healthy relationship with the

insured the insurer send renewal notice to the insured well in advance of the
expiry date of the policy, preferably a month.
Thank You