Importance of general insurance in the context of Manipur

Luikang Mathew Maram *

General insurance or non life insurance policies is issued to automobiles, householders policies, Mediclaim, personal accident, shopkeepers, goods in transit, personal goods like jewellery, laptop, phones etc. in short we called it property and casualty insurance. General insurance policy is not a type of financial claim like life insurance policy. This policy does not run for a long term except fire insurance for a residential building.

Moreover, there is no guarantee of renewal of policy on the same terms and conditions. General insurance companies do not collect savings but they accumulate pools of funds from premium and investment income out of which they meet claims under the policies. Most of the people in Manipur have little knowledge about the general insurance industry.

The general insurance does not give any return if the insured item is not damage or lost in the current policy period. Thus, insurance industry acts like an organized pool. In India there are four PSU general insurance and twenty-two private general insurance. For administrative purposes the PSU insurance company is divided into four companies bases on geographical structure of India.

In the north we have Oriental insurance, United India Insurance in the south, National insurance in the east and New India assurance in the west. In India PSU enjoys bigger share of market due to its credibility and better performance in claim settlement. Particularly in Manipur they enjoy 70­80% of the business. All the four PSU offices are located in Thangal Bazar.

Motor insurance means insuring the financial risk involved in operating the vehicle. The vehicle might meet with any types of changes, accident or may be stolen. Under the provision of motor vehicle act 1988, all the vehicles operating in public places should have compulsory insurance at least to cover third party liabilities. It means that vehicle insurance policy must cover third party in case of any accident. It may or may not cover the damages caused to the vehicle.

There are two basic types of motor insurance policy that is third party liability coverage and comprehensive plan. Third party liability is a compulsory insurance to be taken as per the Govt Act. It covers only the damages caused by the insured vehicle to the third party and does not cover the damages caused to one’s own vehicle. For example (true case), in 2014, a biker was ran over by a bus in Kanglatongbi. He was 26 years at the time of his death and was serving in Indian army. He came home for holiday and was the only earning member of the family. The filed a petition in the court and subsequently the court ordered compensation of Rs 50 lacs through Motor Accident Claim Tribunal.

The claim was processed based on his age and livelihood until his retirement and also the loss caused to the family. There are thousands of such cases in Manipur. If the vehicle was not insured, the court’s verdict would have been shouldered by the owner of the vehicle and the driver. Comprehensive insurance deals with vehicle damages, theft and liability. The insurance company pays for the damages done while driving, park in the road, stolen etc.

In Manipur, vehicle insurance is the most popular insurance but only 30­40% of the vehicle is insured particularly in the hill districts. In the case of insured stolen vehicles, the task becomes easier in filing of FIR with the police. Health is the basic need of every citizen. Looking at the advancement of health sector in Manipur we seriously need to give a thought on health sector. Many of the hospitals are established for business. When it comes to a matter of life and death we are willing to incur any amount.

There are cases of wrong diagnoses and people spend lacs on treatment. There are also cases of looting for unrelated test. Looking at all this if one has health insurance there are experts in the industry to check the cost for which hospital is charging for a particular illness and the expenses incurred. For example, when Mr. Obama was elected as the President of USA, the first act he passed was Patient Protection and Affordable Care act or colloquially known as Obamacare.

Under the act hospitals and primary physicians would transform their practices financially, technologically and clinically to drive better health outcomes, lower costs and improve their methods of distribution and accessibility. With this passing of bill thousands of lives are insured and saved. If one has insurance cover for health they will not think of the money but of their health and get themselves examined for all sickness and thus live longer than those who do not have insurance cover.

There are few hospitals in Manipur where free treatment is available. Generally health insurance is very poor in Manipur because of the lack of public awareness and also because too many fraud cases are reported in the past. Even if one insurance company refuses to give health insurance policy there are always other option because there are many insurance companies in Manipur.

Health insurance can be taken for personal needs or common needs. For the economically poorer section (BPL) of the people RSBY or National health Insurance Programme, insurance scheme is available with the aid of the central government but only few are aware of the same. The contribution of Premium is 75% by Centre and 25% by the state Govt. In the case of northeast 90% is met by the centre and the remaining by the state.

The most popular insurance scheme by Honourable Mr. Narendra Modi, Prime minister of India is Pradhan Mantri Jeevan Jyoti Bima Yojana(18 to 50 years) and Pradhan Mantri Suraksha Bima Yojana (18­70) for all the bank account holders. PMJJBY premium is Rs. 330/­ and PMSBY Rs.12/­ plus applicable service tax. Some claim has been reported after 4th, January, 2016 Earthquake and heavy downpour of rain but very few benefited from it. Manipur falls under the high risk Earthquake zone so people should have maximum insurance for houses. Building insurance is on of the cheapest in the insurance sector.

There are various insurance for livestock and for farmers too. Looking at the trend in Manipur the educated and those people from other states residing and running business are more aware of insurance than the native people.

Thus, they are dominating the industry because all the misfortunes which are not seen are being protected by insurance companies. Most development is concentrated in Imphal and since the capital is flood prone area, insurance can help lots of people during floods or any other natural calamities. For example, the recent cloud burst in Uttarachand and flood in Chennai thousand of crores has been spend by insurance companies for rebuilding the damages.

If there is any complain regarding non payment of claim one can always log in to IRDA Site, where there is a provision for policy holders grievances redressal page in Ombudsman office. Your complaint to the Ombudsman can be when you are not satisfied with the claim or they have not resolved it or not responded to it at all for 30 days etc. The Ombudsman will act as counsellor and mediator.

Insurance is given basing on good faith of the person. Just like you do a complete research while purchasing your life insurance policy or any other financial product according to your needs and requirement and choose the plan that most suits your needs it is the same with the general insurance policies. Thus, taking an Insurance cover will keep us free from tension over Natural Calamities and Accidents which are unpredictable and unforeseeable.