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FAQ On Auto
INSURANCE |
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What is the logic of
insurance?
Is motor car insurance compuLsory in
India?
What is the difference between Agent &
a broker?
What are Insurance Brokerage houses?
What is reinsurance?
What is underwriting?
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What is
the logic of insurance?
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It is a system by which the losses suffered
by a few are spread over many, exposed to similar risks. Insurance is a
protection against financial loss arising on the happening of an unexpected
event. Insurance companies collect premiums to provide for this protection. A
loss is paid out of the premiums collected from the insuring public and the
Insurance Companies act as trustees to the amount collected.
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Is motor
car insurance compulsory in India? |
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Under the provisions of Motor Vehicles Act
all the vehicles which are plying in public places shall have at insurance
policy at least to cover third party liability as specified under the Act. |
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What is
the difference between Agent & a broker? |
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Agent is the representative of Insurance
Company whereas broker is the representative of the consumer or policyholder.
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What are
Insurance Brokerage houses? |
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World over insurance brokerage houses are
large, sometimes even larger than the insurance companies themselves. They
provide reinsurance to insurance companies. In many markets, brokers provide
non-life insurance as well as group life and group mortgage insurance. In
countries like Japan, the broker is not empowered to conclude contracts, accept
representations, and to receive insurance premiums. In such cases minimum
capital requirements and solvency margins are not needed. In general an
insurance broker would provide the following services:
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Pre sales and after sales service to the customers.
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Provisions of relevant information to the underwriters
to assess the risk and decide the premium.
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Design covers that meet the client requirements.
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Recommend risk improvement and loss minimization
measures
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Provide risk management and insurance education
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Collection of Premiums
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What is
reinsurance? |
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The very fundamental principle of spreading
of the risk is actually practised by the insurance companies by reinsuring the
risks that they have insured.
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What is
underwriting?
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Underwriting of a risk involves
consideration of material facts on the basis of which a decision will be taken
whether to accept the risk and if so at what rate of premium.
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