Excess under Fire and Engineering Insurance Policies
IRDA de-tariff the premium rates vide notification Ref:034/IRDA/De-Tariff/Dec-06 Date:04-12-2006 for various policies like Standard Fire & Special Perils Insurance Policy, Engineering Insurance Policy, Vehicle Insurance Policy and Workmen’s Compensation Policy. ‘
Tariff general regulations (other than those relating to rating), terms, conditions, clauses, warranties, policy and endorsement wordings applicable to the above mentioned classes of business as well as Marine Hull insurance business shall continue to be followed until further orders.
The rates of premium may be varied subject to compliance with the Guidelines on ‘File and Use’ of General Insurance Products notified on 28th September ’06.
As a result the premium rates slashed to 5-10% of the erstwhile tariff rates. But wef 1st April 2010/2011 the General Insurers increased the excess amount by many folds under Fire and Engineering policies which is against the above mentioned circular. The excess clause is first exclusions of the terms and conditions which have been flouted by the Insurer without the approval of the Regulator. Thought he policyholder is enjoying the fruit of price reduction but on the other hand claim amount is reduced, if any, without knowing that it is illegal and against the regulations issued by the Authority. Recently, IRDA has approved the Fire insurance policy with add on cover of the Cholamandalam MS General Insurance where in the excess is approved as under:
This Policy does not cover (not applicable to policies covering dwellings)
- a) The first 5% of each and every claim subject to a minimum of Rs.10,000 in respect or each and every loss arising out of “Act or God perils” such as Lightning, SRFI, Subsidence, Landslide and Rock slide covered under the policy
- b) The first Rs.10,000 for each and every loss arising out of other perils in respect of which the Insured is indemnified by this policy.
It concludes that revised excess wef 1/4/2011 is not approved by the IRDA and Insurers have implemented as their own as the excess under Vehicle insurance is increased wef 1/4/2012 with notification of IRDA but not under Fire and Engineering insurance policies which are also tariff policy.