Is insuring cab ride, bicycle, mobile, cyber safety useful?
A host of exotic non-life insurance products are available now. Find out if they deserve a spot in your portfolio.
Smartphones, bicycles and even cab rides are being insured. The covers are easy to purchase and the claim settlement process is touted to be simple. So should you consider them?
With high-end cell phones becoming commonplace, it is not surprising that mobile insurance is attracting attention. While public sector general insurers offer this cover, it has gained popularity after being sold through e-commerce portals. Essentially, it covers damage to screen, liquid as well as accidental damage and theft, depending on the plan variant you choose. “We realised that the cost of repairing or replacing one’s phone screen is mostly around 20% of the mobile’s invoice value, which is why our benefit is a flat 20% of invoice value,” says Jasleen Kohli, Chief Distribution Officer, Digit Insurance, adding that this expedites the claim settlement process.
The policy, bundled with the mobile phone, is linked to the IMEI of the phone and not the user. “I recommend this cover for high-value mobiles. It is useful when theft is included in addition to accidental damage,” says Kapil Mehta, Co-founder, Securenow. in. However, you really don’t need this cover if your mobile phone costs less than Rs 10,000.
Bajaj Allianz and HDFC ERGO offer cyber liability covers. Growing Internet and smartphone penetration have exposed users to risks of cyber attacks, identity theft, phishing and so on. “Every individual is exposed to cyber crimes and frauds. This policy is for anyone who uses a smart device,” says Anurag Rastogi, Member of Executive Management, HDFC ERGO General Insurance.
The covers provide protection against data loss, online impersonation, unauthorised online transactions through the policyholder’s bank account, debit or credit card fraud by a third party and even the cost of dealing with online trolls. They also cover expenses incurred on consultation or legal disputes.
The exclusions are standard–claims arising out of incidents that have taken place before policy issuance, any deliberate, fraudulent, illegal or malicious acts by the policyholder and so on. “If there is any claim in connection with loss or damage caused by the order of any government authority, it will be excluded from the policy,” adds Rastogi. Experts are of the opinion that there is no doubt around the utility of such covers as they fulfil a genuine need.
Source: Respective insurers. *In the basic variant; premium variants cover damage to the phone and theft **Bicycle insurance offered through Tata-AIG, Chola MS.
Cab ride insurance
Offered by ACKO General Insurance in association with Ola Cabs, the product covers riders against a range of risks if they sign up for the insurance while booking a cab. The scope of coverage includes missed domestic flights, loss of baggage, personal accident cover, burglary at home in case of outstation trips and so on. Given the nominal premium and ease of buying, such covers are worth considering, but understand the terms and conditions to avoid disputes later.
For example, missed flight due to delayed arrival at the airport is covered to the extent of Rs 5,000, but not if you do not take adequate care to start on time. “The estimated time of arrival at the airport should be before 60 minutes of the scheduled departure time for travel within city limits and 90 minutes before the departure time for shared and outstation trips,” says Animesh Das, Head, Product Strategy, ACKO General Insurance. Similarly, the compensation to be paid for lost baggage does not extend to valuables, money or electronic items, though laptops are covered.
This category has seen renewed interest of late. Insurtech intermediary Toffee Insurance has tied up with general insurers Tata-AIG and Chola MS to distribute these products. “The policy covers both rider and the cycle for theft, damage and personal accident in a tiered pricing format,” says Rohan Kumar, CEO and Co-founder, Toffee Insurance.
The policy does not cover repairs pertaining to general wear and tear of the cycle. “The main utility here is in the case of theft. This cover is not critical as the financial cost of damaged vehicles is small,” says Mehta. It is a niche product that will appeal to a limited number of users who own high-end bicycles and use them often.