Miscellaneous Insurance

• Introduction
• History and Development
• Meaning and Definition
• Importance of Miscellaneous Insurance
• Scope and Nature
• Types of Miscellaneous Insurance
• Principles of Miscellaneous Insurance
• Functions of Miscellaneous Insurance,

The development of insurance has been going on continuously from the beginning of civilization till the present. The increase of risks in the society and the need for protective measures against them have made various types of insurance essential in the society. Miscellaneous insurance began in England in the late 19th century with the Industrial Revolution. Various types of insurance such as accident insurance, theft and vandalism insurance, crop insurance, livestock insurance, motor vehicle insurance, medical insurance, credit guarantee insurance, public liability insurance, labor welfare insurance etc. are included in miscellaneous insurance. In miscellaneous insurance, insurance policies are issued according to the needs of different sections of the society.

Basically the development of insurance system has been happening with the development of human civilization. Ancient literature and scriptures indicate that there was an insurance system in India and Babylonian. The word ‘Yogakshem’ mentioned in Rigveda is being used in the sense of security and welfare even at present. Miscellaneous insurance began in England in the late 19th century with the Industrial Revolution. Due to the development and complexities of urbanization, industrialization and business sector, various types of risks have expanded, due to which the field of various types of insurance has increased. With the change in social and cultural conditions, development of the latest techniques of information and technology, various insurances have been continuously getting new dimensions. After the nationalization of the Indian insurance system, miscellaneous insurance has been placed under the jurisdiction of the subsidiary companies of the General Insurance Corporation. Animal insurance, crime insurance, aviation insurance, burglary insurance, export risk insurance, reliability insurance, vehicle insurance, credit insurance, etc. are included under miscellaneous insurance.

It is clear from the above subject matter related to miscellaneous insurance that it includes various types of insurance. Or the unit is related to four major miscellaneous insurance, so the meaning and definition of the following four insurance are given here-

1. Crop insurance- Crops can be affected by many types of risks like storm, drought, flood, storm, plant diseases etc. Crop insurance refers to the liability of the insurer to indemnify the insured in exchange for a fixed return in case of destruction of crops due to these risks in a fixed period.
2. Livestock Insurance- Death of animals results in loss to their owners. Livestock insurance is done to compensate for this loss. Livestock insurance refers to the assurance given by the insurer to the owner of the insured animal to indemnify all domesticated animals (cow, buffalo, calf, bull, etc.) against the financial loss caused by certain types of accidents and diseases.
3. Theft or burglary insurance-Theft or burglary insurance means that insurance in which the insured is promised to indemnify the insured in case of theft, dacoity, burglary of his property or goods in a fixed period. In lieu of this indemnity promise, the insurer takes the consideration from the insured in the form of premium. Theft, burglary and dacoity shall have special meanings as defined in the terms of the policy.
4. Personal Accident Insurance – Personal accident insurance means an insurance In which the insurer promises to give a pre-determined amount of money to the insured in case of death or bodily injury due to an accident in a certain period. This insurance is related to personal life and it is promised to give a predetermined amount, so it does not come under the category of indemnity insurance.

The importance of miscellaneous insurance is not only for an individual, but it provides many types of benefits to the society and the entire nation. Renowned writer Prof. Explaining the importance of insurance, Royce has written that “In the modern era, the use and usefulness of insurance is increasing more and more. It does not only serve the purposes of an individual or a group of individuals, but it also plays an important role in our modern social system.” Is creating more and more space and contributing to its change. In short, the importance of diversified insurance from the point of view of different classes is as follows:-

1. Importance from personal or family point of view-
   • Diversified insurance Economic security from different types of risks
   • Miscellaneous insurance provides peace of mind to a person free from worry
   • Personal accident insurance provides financial self-sufficiency in case of physical injury / death of a person
   • Insurance against mortgaged property And provides financial security to the family.
   • In the case of health insurance, awareness about health protection arises. In this insurance, the insurers get health check-ups done from time to time for the insured and various efforts are made to generate health awareness among them.
   • It is possible to travel fearlessly keeping the property with the insured.
   • In case of third party liability insurance, the insured gets protection from statutory liabilities.
2. Importance from economic point of view –
   • Banks / financial institutions provide priority credit facilities on the insured property.
   • Taking insurance gives the benefit of replacing a big economic loss with a small economic loss. The insured can get the financial security of the entire property done by paying a fixed premium.
   • Helpful in the development of infrastructure Insurance companies make the funds collected from premiums available for infrastructure (industry, transport, communication etc.).
   • Promotion of small scale industries, service enterprises, foreign trade.
   • Easy management of Group Insurance Scheme, Social Security Scheme.
3. Importance from social point of view –
   • Personal accident insurance provides stability and security in family life.
   • Through insurance, the benefit of dividing the risk of one person into many is obtained.
   • Benefits of health awareness in health insurance and timely treatment of diseases through health check-up.
   • Engaging in the insurance business develops employment opportunities for individuals.
   • Society gets the benefit of social welfare work (donation, equipment, gifts to hospitals, employment to people of weaker sections, issuance of special type of insurance letters etc.) by insurance institutions.
4. Importance from the point of view of the nation –
   • Benefit of earning foreign exchange by doing insurance business abroad.
   • By investing the amount received from insurance premium, the development of money market and stock exchange centers are benefited.
   • Benefits of investment of large amount by insurance companies in schemes of national importance (transport, communication, scientific research etc.).
   • Due to damage to big industries, there is loss in national income. Insurance helps in meeting this financial loss.

1. Area of ​​miscellaneous insurance – Basically, all those types of insurance which do not come under life, fire and marine insurance are included in the area of ​​miscellaneous insurance. It is known that along with the development of society and business, the expansion of risks has been continuously increasing, as a result of the variety of risks, the field of various insurance is also continuously expanding. Various insurance policies are issued for different classes in miscellaneous insurance, out of which the main insurance policies are as follows –
   • Family Insurance Policy –
     • Theft and Burglary Insurance Policy,
     • Motor Vehicle Insurance Policy,
     • Electrical Equipment Insurance Policy,
     • Mediclaim Insurance Letter,
     • Personal And family accident insurance letter,
     • travel luggage insurance letter,
     • public health insurance letter,
     • jewelery and valuables insurance letter,
     • student security insurance letter,
     • air travel accident insurance letter etc.
   • Insurance cover for commercial and industrial establishments –
     • group medical insurance cover,
     • important person cover,
     • electronic cover,
     • engineering and construction work cover,
     • machine cover,
     • transit money cover,
     • profit loss cover,
     • fire fighting equipment cover, e.t.c .
   • Insurance cover for shopkeepers/small establishments –
     • Public Liability Insurance cover,
     • Shramjeevi Kalyan Bima cover,
     • Comprehensive insurance cover for shopkeepers,
     • Employee credibility cover,
     • Loan cover,
     • Artisans,
     • Rural and cottage industries cover, etc.
   • Insurance cover for rural people –
     • Livestock insurance cover,
     • Crop insurance cover,
     • Weather cover,
     • Rural Personal Accident cover,
     • Agriculture Pumpset cover,
     • Organic gas plant cover,
     • Plantation / Horticulture cover,
     • Farmers lump sum cover etc.
   • Insurance cover for banks includes insurance cover, credit guarantee insurance cover etc–
   • Insurance cover for professional individuals / organizations –
     • Professional Indemnity Insurance,
     • Public Liability Insurance,
     • Stock Brokers / Stock Exchange Indemnity Insurance etc. 
   • Other Insurances –
     • Carriers Insurance,
     • Group Mediclaim Insurance,
     • Duty Performance Insurance,
     • Collection Risk Insurance,
     • Advertisement Equipment (Neon Sign) Insurance etc.
2. Nature of Miscellaneous Insurance – From the study of the concept, meaning and definitions of miscellaneous insurance, its nature is as follows –
   • Miscellaneous insurance is related to risk.
   • It is a measure of economic security against risk. There is mainly a system of compensation, but in the case of personal accident insurance, there is a system of providing a pre-determined amount.
   • In multiple insurance, the risk is assessed by the insurer on the basis of the principle of probability.
   • It is a co-operative institutional arrangement of risk bearing, by which the risk of one person is divided among many.
   • In exchange for bearing the risk, the insurer receives premium from the insured as a consideration.
   • In this, there is a contractual situation between the insurer and the insured in which the promise of compensation or amount of money is given by the insurer to the insured.
   • It is a system based on various principles, in which principle of insurable interest, principle of potentiality, principle of indemnity, principle of co-operation, principle of substitution etc. are prominent.
   • It is an instrument of social action which is regulated by a law made for this purpose.

Due to the inclusion of many types of risks from miscellaneous insurance, it has many types.  In this, the subject matter of four major types of insurance has been included, the details of which are as follows –

1. Crop insurance- In crop insurance, crop damage due to risks related to crops such as flood, storm, fog, drought, diseases and pests etc.  is insured.  Crop insurance provides financial support to the farmer in the event of damage to crops from these risks because in case of insured crop, the farmer has the right to compensation from the insurer. Crop insurance was developed in America in 1938. Crop insurance was considered for the first time in India in 1949, but the efforts made in this regard at that time were not fruitful. In the year 1972, crop insurance was systematically introduced in India.
   • Need and importance of crop insurance –
     • Financial protection to the farmer from crop damage.
     • Motivation for agricultural works due to the economic security system of the crop.
     • Successful operation of agricultural schemes of the government.
     • Security of loans provided by the government and banks to farmers.
     • Promotion of industrialization by protection of agricultural works / business.
     • Promotion of commercialization of agriculture.
     • Statutory right to compensation to the farmer.
     • Strong foundation of agriculture infrastructure (soil protection, wells, ponds, dams, agricultural machinery etc.).
   • Crop Insurance Schemes in India – The primary consideration of crop insurance in India is being done from a long time ago but these efforts could not get the desired success. In 1939, the Foodgrains Insurance Scheme prepared by the Mysore State was made but could not be implemented. In Punjab, 100 aid committees made a plan to help farmers in case of damage to crops, but it did not succeed. In the year 1950, Mr. Priyolkar, a special officer of the Ministry of Finance, made a crop insurance scheme and implemented it in selected states, but later it was closed. The experimental crop insurance scheme was drafted by the Government of India in the year 1950, but it was not accepted by any state. Crop insurance was systematically started in the year 1972 and the schemes made for this are as follows-
     • First pilot or experimental crop insurance scheme – General Insurance Department of Life Insurance Corporation of India it in the year 1972. The main arrangements regarding crop insurance in the scheme were as follows –
       • This scheme was only for the H-4 variety of cotton.
       • It was implemented only in some areas of the state of Gujarat.
       • The plan only included protection against risks from climatic plant diseases and pests.
       • In this the sum insured could be equal to the forecasted cost of the crop and the premium was kept at 2 per cent of the sum insured. After the nationalization of general insurance business, the scheme was transferred from Life Insurance Corporation of India to General Insurance Corporation on January 1, 1973. Between 1974 and 1976, the General Insurance Corporation also started insuring crops like new varieties of cotton, wheat, potatoes etc. in the scheme and the scheme was extended to Gujarat as well as Aak Pradesh, Karnataka, Tamil Nadu and West Bengal. Due to many practical difficulties, this scheme was closed and the second pilot scheme was started in the year 1978-79.
     • Second Pilot or Experimental Crop Insurance Scheme – This scheme was started in the year 1978-79 by General Insurance Corporation of India 2016. By implementing this scheme in selected areas of 12 states, the crops of groundnut, millet, jar, cotton, sugarcane, wheat, potato, oilseeds, jar and gram were insured. In this scheme, the paddy crop of all the states was also insured. Due to difficulties in the implementation of the scheme, it was closed in the year 1985-86.
     • Comprehensive Crop Insurance Scheme – This scheme was started by the Central Government in the year 1985 and its operation was entrusted to the General Insurance Corporation of India. The main points related to the scheme were as follows –
       • Objectives –
         • To provide economic security to the farmers from damage to crops due to flood, drought etc.
         • To encourage the production of food grains, oilseeds, pulses etc.
         • To maintain the loan eligibility of the farmers for the next crop after the damage of the crops.
       • Covered Crops – Five crops of rice, wheat, millet, oilseeds and pulses were insured under the scheme.
       • Inevitability of insurance – Insurance has been made mandatory in the event of the farmer taking a loan to increase the production of any crop.
       • Protected Farmers – In the scheme, the risks of those farmers were protected who took loans from cooperative credit institutions, commercial / rural banks for the production of crops.
       • Participation and risk sharing ratio – Any state government or union territory could participate in the scheme and the risk sharing ratio between the central government and the state government was kept at 2:1.
       • Insurance condition – The most important condition of the insurance policy of this scheme was that compensation will be given only when the yield of the crop is less than the average yield per hectare of that defined area.
       • Premium – The premium in the scheme was kept at 2 percent of the sum insured for wheat, rice, jowar and millet and 2 percent of the sum insured for pulses and oilseeds.
       • Operation and administrative expenses of the scheme – It was decided to run this scheme by the General Insurance Corporation of India through its four subsidiaries and the administrative expenses were decided to be borne by the General Insurance Corporation of India.
       • Insurance Fund – For the implementation of this scheme, the central government and the participating state government had to set up a separate fund.
     • Experimental Comprehensive Crop Insurance Scheme – This scheme was implemented in September 1997. The scheme was prepared in consultation with the representatives of General Insurance Corporation, State Co-operative Societies, Regional Rural Banks, NABARD, Reserve Bank, Union Ministry of Agriculture, nine partner states, etc. The main features of which are as follows –
       • This scheme will be implemented in 25 districts of the country. were started simultaneously.
       • Small and marginal farmers and loanee and non-loanee farmers were also included in the scheme.
       • Food grains, jowar, bajra, pulses, oilseeds etc. were included under the scheme.
       • Under the scheme, the amount of the insurance certificate was limited to the crop expenditure or investment amount in the crop. The sum insured was not kept more than Rs.10,000 per farmer.
       • A provision has been kept in the scheme not to charge insurance premium from small and marginal farmers. Provision was made for 2 percent of the sum insured on food grain insurance from other farmers and 1 percent premium on insurance of pulses, oilseeds etc.
       • The participation of the Central and State Governments in the compensation amount has been fixed in the ratio of 9:1. The scheme was implemented in 14 districts of 5 states. Discontinued in 1998 due to huge claims for damages.
     • National Agricultural Insurance Scheme – This scheme was started in the year 199-2000 by abolishing the Comprehensive Crop Insurance Scheme. Initially, the implementation responsibility of the scheme was given to the General Insurance Corporation of India, but now for its implementation, the Indian Agricultural Insurance Company Limited. has been established. It was decided to bear the expenses of the administration and operation of the scheme in equal proportion by the Central and State Governments. In the scheme, a provision was made for the management and control of the scheme by the concerned bank for the farmers taking the loan. It was decided to collect the insurance proposal and premium of the farmers who did not take the loan from the banks determined by the Reserve Bank and send it to the implementing agency. The main points related to the scheme are as follows –
       • Objectives –
         • To provide insurance protection and financial assistance to the farmers in case of destruction of notified crops due to natural calamities, epidemics or animals or diseases.
         • Encouraging farmers to use high technology.
         • Bringing stability in the agriculture sector (especially in disastrous years)
       • Integrated crops – The following groups of crops are insured in the scheme –
         • Food crops (food grains, jowar, bajra, pulses)
         • Oilseeds
         • Commercial and annual horticulture crops (sugarcane, cotton, potato etc.),
       • Combined (Sanvarit) State – The scheme is for all states and union territories. The states which adopt this scheme have to adopt it for at least three years.
       • Covered Risks – The plan insures against the following risks
         • Natural fire and lightning,
         • Half-storm, hailstorm etc.
         • Flood and landslide,
         • Drought
         • Disease/epidemic e.t.c . The plan does not cover war and nuclear risks, malicious damage and risks that can be prevented.
       • Insurance amount – The maximum insurance amount in the scheme can be up to 150 percent of the average production value of the crop. In the case of loanee farmers, the sum insured must be at least equal to the loan amount.
       • Premium assistance and premium rates – 50 percent of the premium amount is provided as assistance to small and marginal farmers. The premium rates in the scheme have been kept according to different crops of Kharif and Rabi, which have been fixed from 2 percent to 3.5 percent of the sum insured or the rate of the insurer, whichever is less.
     • Creation of Collection Fund – Under the scheme, there is a provision to create a collection fund to pay for the liabilities of destructive losses, in which equal contribution has been decided by the Central and State Governments. The management and control of this fund will be done by the implementing agency.
     • Burden of risk responsibility – Arrangements have been made to bear the risk responsibility arising in the scheme by the government and the implementing agency.
     • Level of compensation – Three levels of compensation have been fixed for all crops, low risk level (90 percent), medium risk level (80 percent) and high risk level (60 percent). Farmer can get more level of risk insurance by paying extra premium.
     • Basis of damage calculation – Under the scheme, the minimum production limit per hectare of each crop is fixed. If the actual production is less than the minimum limit, then the farmer is entitled to compensation for this less production.
   • Potential benefits of the scheme –
     • Improvement and development in agricultural work.
     • Financial assistance to the farmers.
     • Availability of agricultural finance due to insurance.
     • Availability of crop data.
     • Helpful in economic development.
2. Livestock Insurance – Livestock is an integral part of human society whose loss causes loss to its owner. Livestock insurance refers to insurance of all types of pets. In this, the owner of the animal is promised by the insurer to compensate for the damage caused to the animal by the specified risks in exchange for a specified consideration. Livestock insurance in India is being done by all the four companies of the General Insurance Corporation. Following are the main points related to Livestock Insurance –
   • Livestock – Livestock includes all types of livestock, milch cow and buffalo, calf / heifer, sai.
   • Animal age limit for insurance – It is given below according to different animals –
     • The age of milch cow is two years from the age of first calving to 10 years.
     • Age of milch buffalo three years / 12 years from the age at the time of first calving.
     • Sod age from 3 years to 8 years.
     • Castrated bull/buffalo aged 3 years to 12 years.
   • Sum Insured – The maximum sum insured can be equal to the market value of the livestock.
   • Covered Risks – Livestock insurance can be taken for the following types of risks –
     • Risk of diseases and accidents,
     • Risk of fire, lightning, lightning, flood, cyclone, famine,
     • Surgery
     • risk of strike, riot, civil commotion etc., willful damage, damage from overloading, damage from transportation by air/ sea, damage from theft, war, invasion, damage caused by revolution. Not included in this.
   • Amount of compensation – In this insurance, the sum insured and the market value, whichever is less, can be given as compensation.
   • Procedure for getting insurance – The following procedure is adopted for livestock insurance –
     • Filling of insurance proposal form – Filling of prescribed proposal form for insurance in which details of proposer, details of animal, insurance amount etc. are mentioned.
     • Obtaining the health certificate of the animal from the veterinary doctor.
     • Submission of offer letter and certificate to the insurance office.
     • Report of the Development Officer On the proposal letter, the Development Officer gives his report, in which he recommends to be insured if he is satisfied.
     • Insurance premium is informed to the proposer after being satisfied with the report by the insurance company.
     • The insurance becomes effective on depositing the premium by the proposer.
     • To identify and mark the animal by the insurance company, tying ear tag/ring, embossing or tattooing the insurance mark on the animal’s skin with a special stamp, mentioning the natural color of the animal in the insurance proposal, etc. Is used for .
   • Process of death claim – In case of death of livestock due to accident/disease etc., the claim for compensation is submitted through the following process –
     • Informing the animal death insurance office and keeping the dead body of the animal in the same condition for 24 hours. Keep in
     • Filling up of claim form The claim form along with other prescribed forms should be submitted within 7 days of animal death. A death certificate certified by the prescribed authorities should be attached with this form.
     • Handing over the tag/ring on the ear of the animal.
     • If the post-mortem of the animal has been done, then submit its report.
     • Determination and payment of claim amount: After determining the claim amount, the insurance company pays the compensation amount through bank draft or cheque.
3. heft or burglary insurance – To understand the meaning of burglary/burglary insurance, it would be appropriate to first understand the different meanings of these two words. Theft means dishonestly taking the property of another person without his permission and without the use of violence or force. Sandhmari is a broad term which includes theft, dacoity, house-breaking etc. Dacoity and house-breaking involve the taking away of another person’s property by means of violence, use of force, coercion etc.
   • Theft / burglary insurance means – such a policy in which the insurer promises to compensate the insured for the damage caused to his goods / property due to theft, dacoity, house-breaking, in return for a fixed consideration.
   • Theft / Burglary Insurance and Insurance Letter – In India, the following theft / burglary insurance letters are issued for different types of risks –
     • Private House Theft / Burglary Insurance Letter – By this insurance letter, residential house furnishings, property (furniture, Theft of ornaments, jewellery, instruments, equipment etc.) is covered by burglary. But this insurance does not cover the risk of architectural objects, manuscripts, bills, pronotes etc.
     • Business Premises Theft Burglary Insurance Policy – These insurance policies are those in which the property (goods, cash amount, office equipment, furniture etc.) is covered for loss due to theft/burglary.
     • All Risk Burglary / Burglary Insurance Letter – In this insurance letter, along with the furnishings of the house, the risk of specific items (jewelry, artefacts, painting etc.) is insured. Therefore, in this insurance, along with burglary, damage caused by any other reason (by fire as well as by accident) is covered.
     • Margasya Mudra Bima Patra – This insurance cover covers the loss due to theft of currency, robbery while coming and going on the way. Money in transit includes cash money, postal orders, stamps, money orders, etc.
     • Passenger Baggage Insurance – In this insurance, damage to the goods (truck, bed etc.) of the insured in connection with the journey due to any reason (theft as well as damage due to fire, accident) is covered.
   • Theft / Burglary insurance process – The following procedure is adopted for this insurance –
     • Filling of the proposal letter – Insurance proposal letter has to be filled in the prescribed format by the person desirous of theft / burglary insurance, in which detailed information related to the insured property and its owner has to be filled. details have to be filled.
     • To give report and recommendation by Development Officer on insurance proposal.
     • Informing the idea and decision by the company – The insurance company, with the help of its surveyors, considers insurance on the basis of the facts of the proposal and if found suitable, informs the proposer to accept the insurance proposal.
     • Deposit of premium – On receiving the information of acceptance from the company, the proposer gets the premium deposited and the risk starts from then only.
     • Issuance of cover note and insurance letter – After depositing the premium, the insurance company issues a temporary insurance letter (cover note) and after that the insurance letter is prepared and dispatched.
   • Claim Process – In case of damage to the insured property, generally the following claim process is adopted –
     • Informing – In case of damage to the insured property, the insured has to immediately inform the insurance office and the police.
     • Appointment of surveyor and police report – In the context of the information received, the insurance company appoints a surveyor and gets the incident investigated and a police investigation report is also prepared.
     • Claim Submission – The claim should be submitted in the prescribed format within fourteen days of the incident. All reports, proofs should be attached with the claim.
     • Investigation by the insurance company – The company does a detailed investigation of the claim form, evidence and reports received.
     • Compensation amount calculation and payment – The company calculates the compensation amount on the basis of all the documents and pays the compensation amount to the insured.
4. Personal accident insurance – Accident insurance mainly includes motor accident insurance, personal accident insurance, public personal accident insurance. Personal accident insurance is such an insurance in which the insurance company promises to pay a certain sum of money to the insured in the event of physical disability or death due to an accident within a specified period, in exchange for a specified consideration. This insurance does not come under the category of indemnity insurance as a predetermined amount is paid in it. Physical incapacitation in this insurance means such damage by accident as to render the insured physically incapable of carrying on the business/profession/work. This insurance is being operated by the four subsidiary companies of the General Insurance Corporation of India. According to the subject of this insurance scheme, the main facts are as follows-
   • Age group included in the scheme – Individuals between the age of 5 to 70 years are insured in the scheme.
   • Classes of eligible persons – There are three categories of persons eligible for insurance in the scheme –
     • First class – doctors, lawyers, engineers, teachers, bankers, administration etc.
     • Second class – building contractor, motor car driver, etc.
     • Third class – Persons engaged in circus, race, horse riding, underground mines, explosive works.
   • Risks not covered by the plan – The insurer shall not be liable in the event of death / incapacitation of the insured due to any of the following reasons –
     • due to aviation balloon flight,
     • service in the armed forces,
     • Due to willful self-harm or intoxication of drugs,
     • Due to hunting, mountaineering, skiing etc.,
     • Due to war, assault, conflict, civil war, revolution etc.,
     • Criminal reasons,
   • Amount payable in case of incapacitation / death – In case of incapacitation or death due to accident during the insurance period, the amount is given as follows –
     • Full Sum Insured – In case of death, loss of both eyes of the insured / Total paralyzing, in case of permanent total incapacitation,
     • Half the sum insured – in case of loss of one limb (arm/leg) or loss of one eye, loss of hearing power in both ears,
     • Proportional sum insured – in case of permanent partial incapacitation (40% in case of amputation of thumb and fingers), on temporary total incapacitation – 1% of Sum Insured subject to a maximum of Rs.3,000 per week. Up to (up to 104 weeks), 1% of Sum Insured on temporary partial disability up to a maximum of Rs.500 per week, for medical expenses due to accident – 10% of Sum Insured,
   • Process of getting insurance – Mainly the following steps are adopted for getting personal accident insurance –
     • Filling up the proposal form and providing it to the insurer – In this proposal form, the insurance being taken along with the personal physical occupational health related details related to the insured The details of the type, amount, time etc. have to be mentioned.
     • Consideration and decision by the insurer – The insurer considers the proposal according to the provisions of the Personal Accident Insurance Scheme and decides to accept / reject the proposal.
     • Commencement of risk – In case of acceptance of the proposal, the premium is deposited by the proposer and the risk starts. The insurance company issues a cover note at that time.
     • Issue of insurance letter – The entire contract entered into by the insured with the insurer is mentioned in the insurance letter which is issued after issuing the cover note.

It is necessary to follow certain principles for the legality of insurance contract and successful operation of insurance business. The principles of general insurance also apply to miscellaneous insurance. The main principles of miscellaneous insurance are as follows –

1. Principle of co-operation – In insurance, contribution is made by each insured in a fund in the form of premium. In case of loss to any of the members of the fund, compensation is made from the fund. In this way the contribution of one is used for all and the contribution of all is used for one.
2. Principle of Probability – This principle propounds that what has happened in the past is likely to happen again under similar circumstances. On this basis, future possible accidents can be estimated which is essential for the success of insurance.
3. Principle of utmost good faith – This principle propounds the disclosure of all the facts related to the insurance contract.
4. Principle of insurable interest – This principle indicates that the proposer of insurance has economic interest in the subject matter insured. For insurance, the insured must have insurable interest in the subject matter.
5. Principle of Compensation – This principle propounds that only the actual damage caused to the insured due to the specified cause can be compensated by the insurer, not more than that. The compensation amount cannot exceed the sum insured. Therefore, the actual loss amount and the sum insured, whichever is less, is compensated to the insured.
6. Principle of Substitution or Substitution – This principle clarifies that after indemnification, the rights of the insured against the third party are transferred to the insurer. In other words, in relation to the third party, the insurer takes the place of the insured. In addition to these principles, the principle of contribution, the principle of proximate cause, are essential principles for the operation of miscellaneous insurance.

The functions of miscellaneous insurance can be classified as follows –

1. Primary functions – These are the functions that have led to the development of miscellaneous insurance –
   • Providing protection against economic loss.
   • To provide certainty against risk.
   • Carrying out risk segmentation.
2. Auxiliary work –
   • Providing financial assistance.
   • Providing freedom from creation of additional fund for security.
   • To develop security awareness.
3. III. Indirect Work / General Work –
   • Helpful in the development of large enterprises.
   • Assistance to government and industries.
   • Contribution to rural development.
   • Providing social security.