Chapter 05 Making of an insurance Policy
Insurance Quotient Boosters
The various components of an insurance policy are
- Heading
- Preamble Clause
- Operative Clause
- Exclusions
- Definitions
- General Conditions
- Schedule
- Grievance Redressal Procedure
Now that we know the different types of general insurance that one can purchase, it is important to understand the construct of an insurance policy.
It is divided into several sections. Let’s take a look at some of the major sections.
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Heading
It identifies the class of the policy and is displayed at the top of the first page. This section states what kind of policy it is, whether it’s a fire policy, burglary policy, motor policy, marine policy etc.
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PREAMBLE Clause
It primarily states that the insured has paid the premium and signed the proposal form, which forms the basis of this insurance contract.
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Operative Clause
It details the type of the event insured. This contains the promise of insurance company to compensate for any loss or damage suffered due to the operation of the peril insured under the policy. The detailed list of perils covered under the policy is captured to ensure that both parties are on the same page regarding the coverage offered.
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Exclusions
It gives details of the items specifically not covered under the contract of insurance. This is very important to clarify what may not be covered to avoid any disputes.
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Definitions
These details the meaning of various terminology used in the insurance policy. This helps bring clarity on the understanding of various terms since the general meaning may be different than what is applicable in the context of insurance.
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General Conditions
They capture the standard conditions as applicable to the insurance contract. The conditions specify the rights & duties of both insured and insurer. Also treatment of some specific circumstances is also detailed to avoid any dispute.
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Schedule
The schedule captures the specific details of the insured and the property insured like name, address, sum insured, details of the items covered, period of insurance etc.
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Grievance Redressal Procedure
It contains the procedure to be followed, in case the customer is not happy with the services of insurance company in any manner. The section captures details of the various authorities who can be contacted for redressal of the grievance in a fair manner.
