24. WHY MOTOR INSURANCE POLICY WORDING IS DIFFERENT IN EACH COMPANY IN INDIA?

It was a sudden impulse…a strange one though. Lockdown and at home. Lots of time. Being an insurance lover, I decided to read the motor insurance policy wording. I realized, very soon, that all insurers do not have the same policy wording. At random I choose the following companies to compare the policy
wording:

1. TATA AIG GENERAL INSURANCE COMPANY LIMITED
2. LIBERTY GENERAL INSURANCE
3. RELIANCE GENERAL INSURANCE
4. EDELWEISS GENERAL INSURANCE COMPANY LTD

It may kindly be noted that I am taking only the first half page of the policy wording. In my next, I will take few more policy conditions of the above insurance companies to let you know whether the Insurance regulator is actually regulating the industry or a ceremonial institution.

Is it Policy WORDING or WORDINGS?
Wordings is like your choice of words – For example “Your wording in your essay was great!” or “The wording in that book is small”. It describes your choice of words. Then the question is – is it wrong to add a “s” after “wording”? Typically, you will not add “s” after “wording”. I can’t think of any situation that would include “wordings”. Yet, M/s Tata AIG & Liberty General Insurance companies used the word – WORDINGS! I understand that insurance is a contract where the insured is always an equal party. Have mercy! Why do you want to rob us of our money? Please wake up IRDAI.

POLICY WORDING AS TAKEN

TATA AIG GENERAL INSURANCE COMPANY LIMITED PRIVATE CAR PACKAGE POLICY WORDINGSLIBERTY GENERAL INSURANCE POLICY WORDINGS PRIVATE CAR PACKAGERELIANCE GENERAL INSURANCE PRIVATE CAR PACKAGE POLICY WORDINGEDELWEISS GENERAL INSURANCE COMPANY LTD – PRIVATE CAR PACKAGE INSURANCE POLICY
Whereas the Insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be  incorporated herein has applied to TATA AIG GENERAL INSURANCE COMPANY LIMITED.
(hereinafter called the Company) for the Insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such Insurance in respect of accidental loss or damage occurring during the Period
of insurance.

NOW THIS POLICY WITNESSETH:

That subject to the Terms, Exceptions and Conditions contained herein or endorsed or expressed hereon;

Definitions:

1. We, Us, Our-means the Tata AIG General Insurance Co. Limited.

2. You, Your- Means or refers to the person or persons described in the Schedule as the insured.

3. Constructive Total Loss- A vehicle will be considered to be a
Constructive Total Loss (CTL), where the aggregate cost of retrieval and/or repair of the vehicle subject to terms and conditions of the policy exceed 75% of the Sum Insured.

4. Period of insurance – The period of time stated in the schedule for which the policy is valid and operative.

5. Consumable – Includes engine oil, gear box oil, lubricants, nut & bolt, screw, distilled water, grease, oil filter, bearings, washers, clip, break oil and items of similar nature excluding fuel.

6. Geographical Area – As per Schedule

SECTION I – LOSS OF OR DAMAGE TO THE VEHICLE INSURED

1. The Company will indemnify the Insured against loss or damage to the vehicle insured hereunder and/or
its accessories whilst thereon:

i. by fire, explosion self-ignition or lightning;

ii. by burglary, housebreaking or theft;

iii. by riot and strike;

iv. by earthquake (Fire and Shock Damage);

v. by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost;

vi. by accidental external means;

vii. by malicious act;

viii. by terrorist activity;

ix. whilst in transit by road rail inland – waterway lift elevator or air;

x. by landslide, rockslide.

STANDARD FORM FOR PRIVATE CAR PACKAGE POLICY

Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is and has paid the premium mentioned in the schedule
as consideration for such insurance deemed to be incorporated herein has applied to the Company for the insurance hereinafter contained in respect of accidental loss or damage occurring during the period of insurance.

NOW THIS POLICY WITNESSETH:

That subject to the Terms Exceptions and Conditions contained herein or endorsed or expressed hereon;

SECTION I : LOSS OF OR DAMAGE TO THE VEHICLE INSURED

1. The Company will indemnify the insured against loss or damage to the vehicle insured hereunder and / or its accessories whilst thereon

i. by fire explosion self ignition or light;ning:

ii. by burglary housebreaking or theft;

iii. by riot and strike;

iv. by earthquake (fire and shock damage);

v. by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;

vi. by accidental external means;

vii. by malicious act;

viii. by terrorist activity;

ix. whilst in transit by road rail inland-waterway lift elevator or air;

x. by landslide rockslide

Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to the Company for the insurance hereinafter
contained and has paid the premium mentioned in the schedule as consideration for such insurance in respect of accidental loss or damage occurring during the period of insurance.

NOW THIS POLICY WITNESSETH That subject to the Terms Exceptions and Conditions contained herein or endorsed or expressed hereon;

SECTION I: LOSS OF OR DAMAGE TO THE VEHICLE INSURED

The Company will indemnify the insured against loss or damage to the vehicle insured hereunder
and / or its accessories whilst thereon

i. by fire explosion self ignition or lightning:

ii. by burglary housebreaking or theft;

iii. by riot and strike;

iv. by earthquake (fire and shock damage);

v. by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;

vi. by accidental external means;

vii. by malicious act;

viii. by terrorist activity;

ix. whilst in transit by road rail inland-waterway lift elevator or air;

x. by landslide rockslide

Whereas the Insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to EDELWEISS GENERAL INSURANCE COMPANY LTD.
(hereinafter called the Company) for the Insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such Insurance in respect of accidental loss or damage occurring during the Period
of Insurance.

NOW THIS POLICYWITNESSETH: That subject to the Terms, Exceptions and Conditions contained herein or endorsed or expressed hereon;

SECTIONI – LOSSOFORDAMAGE TOTHE VEHICLE INSURED

1. The Company will indemnify the Insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon:

(i) by fire, explosion self-ignition orlightning;

(ii) by burglary, housebreaking ortheft;

(iii) by riot and strike;

(iv) by earthquake (Fire and ShockDamage);

(v) by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost;

(vi) by accidental externalmeans;

(vii) bymalicious act;

(viii) by terrorist activity;

(ix) whilst in transit by road rail inland – waterway lift elevator or air;

(x) By landslide,rockslide

“WHERE AS THE INSURED BY A PROPOSAL AND DECLARATION…”

Let us see how this sentence is written by each of the company.

Tata AIG: “Whereas the Insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to TATA AIG GENERAL INSURANCE COMPANY LIMITED. (hereinafter called the Company) for the Insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such Insurance in respect of accidental loss or damage occurring during the Period of insurance.”

Liberty General: “Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is and has paid the premium mentioned in the schedule as consideration for such insurance deemed to be incorporated herein has applied to the Company for the insurance hereinafter contained in respect of accidental loss or damage occurring during the period of insurance”.

Reliance General: “Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to the Company for the insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such insurance in respect of accidental loss or damage occurring during the period of insurance”.

Edelweiss General: “Whereas the Insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to EDELWEISS GENERAL INSURANCE COMPANY LTD. (hereinafter called the Company) for the Insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such Insurance in respect of accidental loss or damage
occurring during the Period of Insurance”.

A careful reading indicates that both Liberty General & Reliance General were in a great hurry to issue policies. Liberty General Insurance Company seems to drafting their own wordings!! If this is the case for the compulsory insurance, what about other policies? Oh Insured! Please realize, in case of any dispute the court will gladly place the last brick on your grave! Insurance regulator saab…please take care.

STANDARD FORM FOR PRIVATE CAR PACKAGE POLICY

Only Liberty General insurance company has this heading (STANDARD FORM FOR PRIVATE CAR PACKAGE POLICY) and no other company in our sample has this title/heading. Is it that other insurers may be using non-standard forms?

DEFINITIONS OF THE TATA AIG GENERAL INSURANCE COMPANY:

No other company has ‘Definitions’ in its motor insurance policy wording. This is a major addition made by TATA AIG (Please check the table above).

Surprisingly, no other non-life insurance has these definitions. Is it a method to influence an unsuspecting future customer and deprive other insurers their business? This is a major lapse in the policy document.

In conclusion, these policy wordings are very much customer unfriendly. The insurance companies are cheating the unsuspecting customers and denying their rightful claims – as every insurance company has a different motor insurance policy wording. If you were to see spelling mistakes and other errors of English language in the part policy document reproduced and compared, you may kindly note that they are the ‘original sins’ as existing in their policy
document and not the authors creation. Sorry, I am not an author…I am a mirror…reflecting as is. Indubitably, the policy holders are stupid.


About the Author

Dr. K. Raja Gopal Reddy is a seasoned internationally qualified Insurance professional.

What you are reading here, may not answer all the questions we have, but has the absolute power of asking unsettling questions which increase the interest in the strange world, and show the contradictory wonders lying just below the surface of the commonest things of life. Look at this disturbing but beautiful thought of Friedrich Nietzsche “God is dead. God remains dead. And we have killed him”.

Dr. Reddy can be reached at: raja66gopal@gmail.com

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