Tuesday, July 16, 2024

Understanding Exclusions and Inclusions in General Insurance | Pragativadi | Odisha News, Breaking News Odisha, Latest Odisha News – N.F Times


General insurance policies provide financial protection against losses and damages that may occur due to unforeseen events. However, most policies do not provide unlimited coverage. They contain exclusions and inclusions that limit or expand the scope of coverage. Understanding these clauses is crucial to purchasing adequate insurance and avoiding unpleasant surprises during claims. This blog post explains the key aspects of exclusions and inclusions in general insurance policies.

What are Exclusions in Insurance?

Exclusions refer to losses or perils that are not covered under an insurance policy. They limit the insurer’s liability in case of specific events. For example, a health insurance plan may exclude pre-existing diseases, specific treatments, or expenses beyond a certain limit.

Exclusions help insurance companies reduce risk exposure and keep premiums affordable. However, as a policyholder, you must review the fine print to identify exclusions and ensure important risks are not left uncovered. Common categories of exclusions in various policies are:

  • Motor Insurance: Driving under the influence of alcohol, vehicle used for racing/rallying, depreciation costs, mechanical breakdowns, etc.
  • Health Insurance: Pre-existing conditions, specific treatments and procedures, experimental therapies, preventive health check-ups, etc.
  • Travel Insurance: High-risk activities like trekking, scuba diving, etc. Treatment of chronic illnesses, pregnancy, mental health issues, intoxication, etc.

What are Inclusions in Insurance?

In contrast to exclusions, inclusions refer to additional coverage that expands the scope of insurance coverage. These special add-ons or riders compensate for events not typically covered in a basic policy. For instance, your car insurance may include roadside assistance, no claim bonus protection, engine protection, zero depreciation coverage, etc., for additional premiums.

Some common inclusions in various policies are:

  • Health Insurance: Cover for modern treatments like robotic surgeries, relaxing of pre-existing condition waiting periods, restoration of exhausted sum insured amounts, etc.
  • Motor Insurance: Personal accident cover for passengers and drivers, vehicle accessories cover, roadside assistance, invoice price cover, etc.
  • Travel Insurance: Cover for flight delays, trip cancellations, baggage loss, etc.

Why Review Exclusions and Inclusions?

There are several reasons why you must pay close attention to exclusions and inclusions in your policy:

  • Avoid Gaps in Coverage: Omissions in coverage can leave you vulnerable during claims. Reviewing exclusions helps identify these gaps.
  • Understand Limits of Liability: Exclusions define the scope and limits of insurance coverage. Being aware of these helps set realistic expectations.
  • Make Informed Decisions: Analysing inclusions/exclusions helps decide which riders and add-ons provide the best value.
  • Compare Similar Policies: The inclusions offered by one insurer may be excluded in a competitor’s policy. Comparing these helps find the optimal product.
  • Negotiate Better Deals: Discussing unreasonable exclusions with your insurer may help get them waived off or limiting conditions relaxed.
  • Ensure Compliance: Exclusions must be clearly conveyed under insurance regulations. Reviewing them validates regulatory compliance.

Tips for Managing Exclusions & Inclusions

Here are some useful tips to optimise your insurance coverage:

  • Read policy documents thoroughly and highlight exclusions/inclusions clauses. Ask your agent to explain exclusions you don’t understand.
  • Evaluate your risks and identify any frequently excluded ones, such as flooding, theft, dental issues, etc. Consider purchasing separate riders or plans to cover high-priority exclusions.
  • Don’t solely focus on the premium. An inexpensive policy rife with exclusions provides limited value.
  • Avoid obscure insurers with very broad or unreasonable exclusions. Opt for companies with more transparency.
  • Review inclusions and exclusions at renewal and negotiate for wider coverage if needed. Certain exclusions can be waived for existing policyholders.
  • Maintain proper documentation regarding your assets, health history and other records. This smooths the claims process and minimises rejection due to exclusions.

A new-age insurance provider like ACKO takes an innovative approach to exclusions and inclusions. ACKO Insurance provides customised insurance plans where you can modify inclusions according to your needs and budget. With this, ACKO aims to provide more transparency and flexibility to customers regarding their coverage options. Hence, looking beyond old-school insurance providers and exploring new-age insurers can potentially help you find policies better aligned with your risk coverage needs.

The Bottom Line

While purchasing insurance, most people just look at the premiums and assume complete protection. However, reviewing exclusions and inclusions is integral to making an informed choice. It can help avoid nasty surprises when you need coverage the most. Strike a balance between lower premiums and prudent coverage as per your specific insurance needs.


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