PARA 13.2 IC 78, Miscellaneous Insurance One Liner Chapter-13 : Rural Insurance-II

PARA 13.2 IC 78, Miscellaneous Insurance One Liner Chapter-13 : Rural Insurance-II

Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 78, Misc Insurance  Chapter 13: Rural Insurance II  for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.

IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 78, miscellaneous insurance paper comes in all GIPSA exams which makes it very important.

CHAPTER 13: RURAL INSURANCE – II

1. Common features of the insurance schemes of animals are as follows:

  • Coverage is against accident or disease.
  • Sum insured is based on veterinarian certificate.
  • Appropriate identification marks on the animal are to be incorporated in the policy.
  1. Insurance of elephants
  • In this type of insurance, elephants used for commercial/religious purposes in the age group 5 to 60 years can be insured. (ques)
  • Sum insured should exclude the value of tusk.
  • The rate is 4.5% for temple elephants and 5% for other (ques
  • In the event of claims 80% of market value is paid. (ques)
  1. Insurance of pigs (ques)
  • Pigs (indigenous/cross bred, (exotic) in the age group of 6 months to 3 years.
  • The limit of liability for claim is 80% of sum insured.
  • The rate is 5% on peak value during rearing stage
  1. Insurance of rabbits (ques)
  • Rabbits – All breeds in the age group of 1 day to 4 years.
  • The sum is 100% of market value.
  • The rate of premium is 7%. Claim payment at 70% of sum insured or market value whichever is less.
  1. Insurance of Zoo and Circus animals and birds
  • Sum insured based, on valuation done by curator and health certificate by veterinary doctor.
  • The rate of premium:
  • Zoo – 5.0% of Sum Insured
  • Circus – 7.5% of Sum Insured
  1. Sericulture (silk worm) insurance (ques)

a)The insurance scheme is applicable to the following breed of Silkworm fed on mulberry leaves only:                a) Univoltine               b) Bivoltine               c) Multivoltine

b) Indemnity is in respect of total loss or destruction of the cocoons, following the death of silkworm due to accident or disease during the period of insurance.

c) The policy may be extended at extra premium, to cover loss of cocoons due to accident during transit from the insured’s farm to the cocoon market.

d) Exclusions: Some of the important exclusions are:

  • Diseases contracted prior to or within 5 days from the date of commencement of risk.
  • Loss due to natural mortalities and / or normal trade loss.
  • Loss due to improper management and / or rough handling.
  • Theft or clandestine sale.

e) The crop period varies from 3 weeks to 5 weeks i.e. from the stage of plantation of eggs to the final stage i.e. harvesting of cocoons. Thus, the policy may be issued for 12 months or the crop period as is required

f) A certificate from the Sericulture Department regarding the cause of loss and the value of cocoons at the time of loss is the basis for settlement of claim.

7.Important policy terms

  • Measures to be taken for prevention of disease and pest attacks.
  • The eggs should be healthy.
  • Cocoons should not be sold in any place other than the notified market.
  • The insurance cover ceases once the cocoons leave the rearing premises.
  • A Technical Report-cum-Certificate of the Government Sericulture Department approving the method adopted by the Seri-culturist and identifying the areas where Silk worms are reared.
  • Only disease free supply of layings for rearing, obtained from licensed seed suppliers or Government Sericulture Department are insurable
  1. Honey bee insurance
  • The insurance applies to hives and/or bee colony belonging to the cooperative society.
  • The cover is in respect of all accidental loss or damage to the hive and / or bee colony.
  • Theft risk can be covered on payment of additional premium.
  1. The important exclusions are:( Honey bee insurance)
  • Neglect or improper management and / or rough handling
  • Natural mortality
  • Any destruction as required by any order of Government / municipal authority.
  1. Value for (a) cost of hive and (b) cost of bee colony will be taken as insured value.
  2. The respective boxes should be identified with the company code and number.
    Assessment of loss is based on a certificate given by an authorised officer of the concerned Government Department. (Honey bee insurance)
  3. The liability under the policy is 80% of the assessed amount, the insured bearing the balance 20%. (Honey bee insurance)
  4. Horticulture crops / plantations insurances

14.Horticultural crops include the following:

  • Grape
  • Citrus (Orange, Lime, Sweet Lime)
  • Chikoo
  • Banana
  • Apple
  1. Plantation include the following:
  • Rubber
  • Eucalyptus
  • Poplar and Kadam
  • Teak wood
  • Tea
  • Oil Palm
  1. Sugarcane
  2. Flowering plants (floriculture) include the following:
  • Orchids
  • Roses
  1. Betelvine
  2. The policy provides indemnity in respect of loss of or damage to the insured tree / fruits (whichever is applicable depending on the crop insured) by:
  • Fire (including forest fire and bush fire)
  • Lightning
  • Storm, Flood and Inundation
  • Riot, Strike and Terrorism
  1. Exclusions: Some of the important exclusions are: (Horticulture crops / plantations insurances)
  • Loss by theft
  • Earthquake
  • Loss / damage due to insects , pests and diseases (unless specially covered)
  • Non-compliance with package of prescribed agricultural practices for the insured crop.
  • Climatic variations, pollution, non-bearing of fruits.
  • Damage by birds, animals
  • Damage to plant supports, irrigation system, agricultural equipment etc.
  1. Period of insurance: This period is for the crop duration (from planting to harvest) or one year whichever is shorter. (Horticulture crops / plantations insurances)
  1. Sum insured The Sum Insured is based on the input costs i.e. cost of cultivation (Horticulture crops / plantations insurances)
  2. General indications of premium rates are:
  • Horticultural Crops 5.00 % of Sum insured
  • Plantations 1.25 % of Sum insured
  • Sugarcane 1.25 % of Sum insured
  • Flowering plants 5.00 % of Sum insured
  • Betelvine 10.00 % of Sum insured

24.Claim is not payable if the amount of loss assessed does not exceed: (Horticulture crops / plantations insurances)

  • 10% of Sum insured per acre or
  • 1000 per affected acre
  1. The liability under the policy is 80% of the assessed loss Horticulture crops / plantations insurances
  2. Agricultural pump set policy: The insurance is granted on Centrifugal Pump sets (electrical and diesel) up to 25 H.P (capacity of approved makes) used for agricultural purposes only.
  3. a) Coverage

The cover is in respect of unforeseen and sudden physical damage to pump

sets (including starters) by:

  • Fire, lightning
  • Riot, strike, malicious damage, terrorism
  • Mechanical, electrical breakdown
  • Burglary (by violent forcible entry and provided the pump set is kept in a locked enclosure)
  1. Flood risk can be granted on a selective basis at extra premium.
  2. Agricultural pump set policy Exclusions: Some important exclusions are:
  • Cost of dismantling, to and from transport to workshop and cost of erection.
  • Faults existing at the time of commencement of policy and known to the insured
  • Damage for which the manufacturer or supplier is responsible.
  • The sum insured should represent 100% of new replacement value.
  • The rates of premium vary according to type of set i.e. electric or diesel/oil and Horse Power.
  • There is excess applicable to machinery breakdown claims only. The amount of the excess varies according to type of set and Horse Power.
  • There are discounts for group policies, long term policies and for ‘no claim.
  1. Failed Well Insurance: The insurance applies to:
  2. Dug wells, ii. Bore Wells or iii. Dug-cum-Bore wells

These wells should be:

  • Used for developing ground water and
  • Financed by cooperative / commercial banks and
  • Sponsored by National Bank for Agriculture and Rural Development (NABARD)

31.Failed Well Insurance Coverage : If the well fails to yield specified quantity or water, the policy indemnifies the insured to the least of the following:

  • Cost of all civil construction less the cost of pumping equipment and its accessories, or
  • The sum insured

b) The proposal form countersigned by the bank has to be accompanied by:

  • Site plan of place of land on which well is to be dug. (site selection has to be done by a qualified hydrologist / geophysicist)
  • Permission of the local Municipal Authority.

c) A group policy may be issued to the bank covering a number of farmers provided the required details are supplied for each well.

d) Failure of well is determined with reference to prescribed parameters and certified by the District/Block Certifying Agency constituted by State Government.

The lift irrigation system comprises:

Intake well, Delivery chambers, Jack Well, Pump House, Water Storage Tank, Pipelines Cables, Switch Gears, Starters, Electric motors of capacity from 3 H.P. to 200 H.P

  1. Lift irrigation insurance Exclusions: The important exclusions are:
  • Loss or damage resulting from overload experiments
  • Gradually developing flaws, defects etc.
  • Wear and tear from normal usage
  • Loss or damage due to faults existing at the time of commencement of risk known to the insured but not disclosed to the Company.
  • Loss of or damage to belts, ropes chains, all operating media (e.g. lubricating oil etc.), packing material etc.
  1. Lift irrigation insurance Excess: There is an excess of Rs. 1000/- on each and every claim. For machinery breakdown the excess is 1% of the value of the machinery or Rs. 1000/- whichever is higher.
  2. Lift irrigation insurance Sum insured: The sum insured shall be equal to the cost of replacement of insured property by new property of the same kind and capacity.
  3. On payment of a loss, the sum insured is reduced and must be reinstated to the original level on pro-rata premium from the day the affected item is put to work.
  4. Lift irrigation insurance Rating: The rate of premium is .070% if all items of property are insured. If any item is deleted, a higher rate will apply. If only machinery is insured, machinery tariff rates will apply.
  5. Salt works insurance: a) The cover under the policy applies to earthwork / mud work and salt stored on platforms against the risk of:
  • Storm, Cyclone, flood and allied perils
  • Unseasonal rainfall (as declared by the Meteorological Department)

(Note: Salt brine i.e. salt in process of production cannot be covered under the policy)

b) The sum insured is the actual cost of construction and the indemnity is restricted to the cost of repair and/or reconstruction.

c) The policy is subject to excess of 30% of the Sum Insured on earthquake/mud work and salt stored on each platform affected by loss.

Salt works insurance The rate of premium is:

  • 15% for earthquake/mud work and
  • 30% for salt stored on platform.
  1. Pedal cycle / cycle rickshaw insurance:
  • Insurance applies to vehicles driven by manpower only.
  • The coverage under both policies is as follows:
  1. Pedal cycle / cycle rickshaw insurance Own damage: The policy covers loss or damage by:
  • Accidental external means
  • Fire, lightning or external explosions
  • Theft, burglary
  • Riot, strike, Malicious Act
  1. Pedal cycle / cycle rickshaw insurance :The policy does not cover loss or damage by: – –
  • Overloading or mechanical breakdown
  • Earthquake, storm, flood etc.
  • Theft of accessories unless the vehicle is stolen at the same time.
  1. Pedal cycle / cycle rickshaw insurance Accidental damage is subject to excess of:
  • 15 in the case of pedal cycle insurance and
  • 25 in the case of cycle rickshaw insurance
  1. Pedal cycle / cycle rickshaw insurance Third party liability
  • Legal liability for bodily injury and property damage of third party, subject to limit of Rs. 10,000/- any one accident.
  • In the case of cycle rickshaw, cover is also provided for legal liability for death or injury of passengers – limit Rs. 1,000/- for 2 passengers (Rs. 500/- each) and damage to goods of passengers Rs. 500/-.
  1. Pedal cycle / cycle rickshaw insurance : It is a condition of the policy that the vehicle shall be secured with proper padlock when left unattended or not in use.
  2. Animal driven cart insurance: The cover is provided under three sections. These are:

Section 1

  • Loss or damage to cart or tonga by accidental external means, fire, lightning, storm, flood etc. burglary, theft, riot, strike, malicious act., terrorism and when in transit by rail, road or inland waterways.
  • Death or permanent total disablement of the insured animal arising during and out of an accident to the cart/tonga.
  • The animals used for driving/pulling are: Male buffaloes, bullocks, bulls, Horse / Mule, Donkey, Camel

Section 2

  • Third party liability’ up to Rs. 5,000 per accident and 10,000 all accidents in a year.

Section 3

  • Personal accident cover to the driver, whether owner or otherwise.
  1. Animal driven cart insurance: Sum Insured should be 100% of the market value of the cart/tonga and animal to be declared separately.
  2. Animal driven cart insurance: The policy is subject to excess of Rs. 100 (cart) and Rs. 200 (tonga) for each claim. In case of damage to rubber tyres, the liability is limited to 50% and in case of total loss to 75%.
  3. Hut insurance: Dwelling huts in rural areas constructed with financial aid from Banks / Cooperatives / Government institutions are covered against the risk of: Fire, Earthquake, Inundation storm, Impact damage, Riot, Strike and Malicious damage
  1. Hut insurance For a maximum sum insured of Rs. 6,000 (agreed value policy) comprising Rs. 5,000 for structure and Rs. 1,000 for contents.
  2. Hut insurance Maximum 200 huts, situated in one contiguous are covered.
  3. c) The rate is Rs. 3/- per mile. Group discounts are available.
  4. Group Hut insurance : The sum insured should not be more than Rs. 5000/-.
  5. Group Hut insurance The rate of premium is Rs. 3/- per mille with provision for lower rates for number of huts ranging from 15000/- on a slab basis.
  6. Group Hut insurance :The total aggregate claim shall be limited to:
  • 2 crores per event
  • 10 crores in any one year during the currency of the policy
  1. Group Hut insurance :The business is shared with the state government on 50% co-insurance basis.
  1. Group Hut insurance :Major claims e.g. flood and fire are surveyed and assessed by a Task Force constituted by the insurer.
  2. Personal accident social security (PASS): The Central government had introduced in the year 1985, the Personal Accident Social Security Scheme for the benefit of poor families.
  3. Poor families’ are defined in the policy and include landless labour households, families of traditional craftsmen etc. whose total annual income does not exceed Rs. 7200/-.
  4. Personal accident social security (PASS ) Salient features of the Scheme
  5. a) The scheme provides for payment of Rs. 3000/- in the event of accidental death of any person in the age group of 18 to 60 who is an earning member of poor family.

Beneficiaries:

  • Surviving spouse or
  • If there is no surviving spouse, the payment be made to all dependent children jointly who will share equally. Where the payment is to be made to minor children, the same may be made by way of Post Office deposit or
  • If there are no surviving children, the payment can be made to dependent surviving parents.
  1. Personal accident social security (PASS) When compensation is not payable
  • Death arising or resulting from breach of any law with criminal intent.
  • When compensation higher than Rs. 3,000/- is receivable by virtue of any other law / statute e.g. Motor Vehicles Act, Solatium Fund, Employees State Insurance Scheme, Workmen’s Compensation Act, etc.
  1. Hut Insurance Scheme was introduced by the Central Government with effect from 1st May, 1988.
  2. The Scheme provided for payment compensation to very poor families in rural areas when their huts and/or belongings are destroyed by fire (Rs. 1,000/- for huts and Rs. 500/- for belongings)
  3. Very Poor Families’ are defined in the scheme and include landless labourers, small farmers etc., whose annual family income does not exceed Rs. 4,800/-.

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