Insurance In Tort Laws

INTRODUCTION

This project has been an eye opener for me. It is extremely relevant to the modern times and as the future of India we should understand that it is the common mass that runs the country. Consumer protection rights are an important issue in modern days. The law can be effectively used to stop any abuse of the common people especially illiterate masses who do not understand the rules and regulations which is to be followed while buying particular item. It is law, the controller of the entire society which can stop this abuse from taking place. It can place effective standards guiding a product’s genuinity and the proper verification of its price. No extra taxes should be issued according to the seller’s wish. I have proceeded by referring to the books written by Avtar Singh, Venkat Rao and others. It has been a wonderful and educational delight in going about this topic and making a project which is of greatest importance in the present day scenario.

DEFINITION OF CONSUMER

The words “consumer”, “consumed”, “consumption” is all cognate, and when one is defined, the contents of the definition go into all of them wherever they occur in the same act.

Section 2 of the act wherein ‘consumer’ is defined. According to him, the definition of the consumer will not take a client who engaged the advocate for professional services.

Consumer means any person who-

– Buys any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system or deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly promised or under any system of deferred payment when such use is made with the approval of the person, but does not include a person who obtains such goods for resale or for any commercial purpose

– Hires or avails of any services for a consideration which has been paid or promised or partly paid or partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for the consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial support

In Black’s Law Dictionary it is to mean:

One who consumes. Individuals who purchase, use, maintain or dispose of products and services. A member of that broad class of people who are influenced by pricing policies, financing practices, quality of goods and services, credit reporting debt collection and other trade practices for which the state and federal consumer laws are enacted.

OBJECTVES OF THE ACT

The act is dedicated, as its preamble shows, to provide for better protection of rights of consumers and for that purpose to make provisions for the establishment of consumer councils and other authorities for settlement of consumer disputes and for other connected matters. In the statement of objects, reasons it is said that and the act seeks to provide speedy and simple redressal to consumer disputes. Quasi judicial body machinery has been set up at the district, state and central levels. These quasi judicial bodies have to observe the principle of natural justice and have been empowered to give relief to a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non compliance of orders given by quasi judicial bodies have also been provided.

The object and purpose of rendering the act is to render simple, inexpensive and speedy remedy to consumers with complaints against defective goods and deficient services and for that quasi judicial machinery has been sought to be set up at the district, state and national levels. These quasi judicial bodies are required to apply the principle of natural justice and have been empowered to give relief of specific nature and appoint wherever necessary, compensation to consumers.

INSURANCE

An operational definition of insurance is that it is

– the benefit provided by a particular kind of indemnity contract, called an insurance policy;

– that is issued by one of several kinds of legal entities (stock company, mutual company, reciprocal, or Lloyd’s syndicate, for example), any of which may be called an insurer;

– in which the insurer promises to pay on behalf of or to indemnify another party, called a policyholder or insured;

– That protects the insured against loss caused by those perils subject to the indemnity in exchange for consideration known as an insurance premium.

The influence of insurance on the law of torts has been significant, both on theoretical level and on practice. Insurance has undermined one of the two main functions of awarding of damages, and it has in cast doubt on the value judgements made by the courts in determining which particular test of liability is appropriate in the given circumstances.

Regardless of whether in the particular circumstances the appropriate principle of liability is intention is malice, fault or strict liability, the purpose of common law damages remains the same. The primary purpose of an award of damages is to compensate the victim for his loss, with view to restoring him as near as possible to the position he would have been in but for the tort of the wrongdoer. But damages have another: by making the wrongdoer responsible for meeting an award of damages, the courts are trying to deter others from committing similar tortuous wrongs.

Insurance vitiates the secondary purpose of damages, at the same time incidentally ensuring that the primary purpose is more often achieved.

It can scarcely be realistically asserted that insured defendants are deterred by the prospect of losing no-claims bonus or by increasing of premium on renewal of their policies. Once it is conceded that insurance renders compensation for the sole purpose of damages but then the tort action itself becomes vulnerable to attack, for there are many ways-some perhaps fairer and administratively cheaper than tort- of compensating a victim for a loss he has suffered.

Prima facie, where a person suffers loss of recognized kind as the result of another’s act, then the latter should have to make good that loss. But for valid reasons, the courts have held that, in certain circumstances, the actor will have to compensate his victim only if he is at fault. The victim’s right to compensation is, therefore curtailed in an attempt to be fair to both the parties. The courts have made a policy decision that, in the circumstances, it is right to reward a defendant who has been careful by protecting him from liability for the consequences of his actions and that, as a corollary the plaintiff must forego his compensation. The policy decision is made on the supposition that the wrongdoer would himself have to pay for the damages but for this protection; it by no means follows that the same decision would be made if there were no risk of the wrongdoer having to provide the compensation.

It is difficult to judge the victim’s right to compensation should be curtailed when that curtailment is not justified by a corresponding benefit to the wrongdoer. The requirement of fault ceases to play its role as the leveler between the victim’s legitimate expectations and the wrongdoer’s legitimate expectations, and becomes simply a hurdle to the victim’s progress to compensation. If it is accepted that no one can insure against liability for harm caused by intentionally to another , then similar arguments can be made by the inappropriateness of the victim’s having, in certain circumstances to prove an intention to do him wrong or harm, when it is irrelevant to the wrongdoer whether he had such an intention or not.

Again the victim’s right to compensation is being curtailed without any corresponding benefit to the wrongdoer.

However, insurance has influenced the law of tort on a much more practical level as well. While the fact of insurance is not of itself a reason for imposing liability , there can be no doubt that it does add “a little extra tensile strength” to the chain which a wrongdoer to his responsibilities.

As well it has given new horizon to damages ; it is true that traditionally it was considered to inform the court that a defendant was insured , but “those days are long past” and now it is frequently openly recognized that the defendant would be insured.

The policy of insurance constitutes a contract of insurance between Life Insurance Corporation or a subsidiary of General Insurance Company of India, as the case may be, such services such has been undertaken to render under the contract of insurance. However as a rule, occasion to render services arise only when insured surrenders his policy, or the policy matures for payment or the insured dies or any other contingency which gives rise to render service occurs.

Breach of contract of insurance may give rise to a cause of action to file a civil suit, but such breach of contract may itself constitute deficiency in service, so as to give a cause of action to file a complaint under the consumer protection act for one such more relieves awardable hereunder.

Section 13(4) of the act vests in a redressal agency powers of the Civil Court, while trying a suit in respect of such matters as examination of witnesses on oath and production of documents. Declining to exercise jurisdiction in a case before it only because it involves examination and cross examination of facts, witnesses and production and consideration of documents would amount to abdication of its jurisdiction.

Such discretion can be exercised only when the gives rise to several issues and necessities taking of voluminous oral and documentary evidence, or otherwise involve complex questions of fact and law which cannot be decided in time bound proceedings under the consumer protection act.

MOTOR VEHICLE INSURANCE

Where the sale of a vehicle is complete, the title therein passes to the purchaser notwithstanding that his name has not been recorded in the R.C.Book. Such owner is entitled to get his vehicle insured and also to maintain a claim on the basis of such insurance. The earlier owner, who has lost insurable insurance on the sold vehicle, cannot advance a claim on the basis of policy of the said vehicle, earlier taken by him, on the ground that he is still the recorded owner of the said vehicle.

Section 157 of the motor vehicles act is only in respect of third party risks and provides that the certificate of insurance described therein shall be deemed to have been transferred in favour of the person to whom the motor vehicle is being transferred. It does not apply to other risks, if any, covered by the policy. If the transferee wants to avail the benefits of other risks covered by it, he has to enter into an agreement thereof with the investor.

FRAUD BY INSURER

If it is established that the discharge voucher was obtained by fraud, misrepresentation, undue influence or coercive bargaining or compelled by circumstances, the authority of the consumer forum may be justified in granting relief. Mere execution of the discharge voucher would not deprive the consumer of his claim in deficiency of service.

DELAY IN SETTLEMENT OF CLAIM

In Sarveshwar Rao v. National Insurance Company Ltd. , it was held that the delay of two or more years in settling the insurance claim would result in inadequacy in the quality, nature and manner of the service which the insurance company has undertaken to render, and amounts to deficiency in service.

In Delkon India Pvt. Ltd. V. The Oriental Insurance Company Ltd. . The National Commission has held that it was a deficiency of service to have delayed the claim by two years on the ground that the final police report was not coming.

INTERPRETATION OF TERMS

In Skandia Insurance Company v. Kokilaben Chandravadan , the honorable Supreme Court ruled that the exclusion terms of the insurance must be read with so as to serve the main purpose of the policy, which is to indemnify the damages caused to the vehicle.

CONDUCT OF THE INSURER

In Oriental Insurance Co. Ltd. V. Mayur Restaurant and bar , the conduct of the insurer was under question. The commission held that deficiency of the service was established on the part of the opposite party on two counts i)delay in settlement of claims and ii) unreasonable and un maintainable reasons for repudiating the claim of the complainant, and the compensation with the interest and cost was awarded.

SUICIDE BY THE ASSURED

In Life Insurance Corporation v Dharma Vir Anand, the national commission refused to hold the insurance commission liable as the insured committed suicide before the expiry of three years from the date of the policy.

BREACH OF TERMS

In B.V.Nagarjuna v Oriental Insurance Company Ltd., the terms of insurance contract permitted the insured vehicle to carry six passengers at a time but the driver allowed two more persons to get in. It was held that merely adding two more persons without the knowledge of the driver did not amount to indemnification by the insurance company.

NOMINEE’S RIGHTS

In Jagdish Prakash Dagar v. Life Insurance Corporation , it was held that a nominee under a policy of life insurance will be a consumer within the meaning of section 2(1) (d) of the Consumer Protection Act. The commission held that the nominee could legislatively maintain an action against deficiency raised in service by the arbitrary decision of the insurer.

REPUDIATION

Repudiation is defined as the renunciation of a contract (which holds a repudiator liable to be sued for breach of contract, and entitles the repudiatee on accepting the repudiation to treat the contract as at an end

This concept of repudiation is needed in the concept of insurance. The concept of repudiation will be dealt hereto a number of times and to provide beneficiary evidence, the definition has been given.

Unilateral repudiation of its liability, under the contact of by the life insurance corporation or an insurance company does not, by itself oust the jurisdiction of a redressal agency, to go into the sustainability of such repudiation, on facts and in law and to decide and to adjudicate if, in the facts of the case, it amounts to deficiency in service or unfair trade practice, and if so, to award to the aggrieved person, such relief or reliefs under Section 14(1) of the said Act as he or she is entitled to. The fact that before such repudiation it obtained a report from a surveyor or surveyors also does not oust the jurisdiction of a redressal agents to into the merits of such repudiation, for otherwise in each case the corporation or such company, and deprived the aggrieved person of the cheap and expeditious remedy under the consumer protection act.

Where, however the corporation or the company conducts thorough investigations into the facts which have given rise to claim and other associated facts, and repudiates the claims in good faith after exercise with due care and proper application of mind, the redressal agency should decline to go into the merits of such repudiation and leave the aggrieved person to resort to the regular remedy of a suit in a civil court.

The law does not require the life insurance corporation or an insurance company to accept every claim good or bad, true or false, but it does require the corporation or the company to make a thorough investigation into such claim and to take decisions on it, in good faith, after exercise of due care and proper application of mind and where it does so it renders the service required by it and cannot be charged with deficiencies in service, even if, in the ultimate analysis, such decisions is wrong on the facts and in law and the redressal agency would be disinclined to substitute its own judgement in the place of the judgement of the corporation or insurance company.

The question as to whether repudiation of its liability does or does not amount to deficiency in service would depend upon the facts of each case.

Where a cheque sent towards a premium is dishonoured by the drawee bank and consequently the policy is cancelled or it lapses or the injured dies before the proposal is accepted and contract of insurance results, no claim can be founded in such a policy, which was cancelled or has since lapsed, or a contract of insurance, which did not materialize at all. Repudiation of such claim can never amount to deficiency in service.

Insurance agent is not entitled to collect premium on behalf of the corporation. Where an insured issues a bearer cheque towards premium and hands it over the insurance agent who encashes it, but does not deposit the premium with the corporation event till the expiry of the grace period and consequently the policy lapses and meanwhile the insured also dies, his nominee has to blame himself or herself for the indiscretion of the insured and cannot blame or fault the corporation.

BASIC PRINCIPLES OF INSURANCE

There are some basic principles concerning the topic of Consumer Protection Law and Insurance.

– Settlement of insurance claim is service, default or negligence therein is deficiency of that service

In the case of Shri Umedilal Agarwal v. United India Assurance Co. Ltd, the National Commission observed as under:

“We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the insurer to the settle the claim of the insured within a reasonable time and the prayer for the grant of compensation in respect of such delay will not within the jurisdiction of the redressal forums constituted under the consumer protection act.

The provision of facilities in connection with insurance has been specifically included within the scope of the expression “service” by the definition of the said word contained in section 2(i) (o) of the act. Our attention was invited by Mr. Malhotra, learned counsel for the insurance company to the decision of the Queen’s Bench in national transit co. ltd. V. customs and central excise commissioners . The observations contained in the said judgement relating to the scope of the expression insurance occurring in the schedule of the enactment referred to therein are of no assistance to all of us in this case because the context in which that expression is used in the English enactment considered in that case is completely different. Having regard to the philosophy of the consumer protection act and its avowed object of providing cheap and speedy redressal to customers affected by the failure on the part of persons providing service for a consideration, we do not find it possible to hold that the settlement of insurance claims will not be covered by the expression insurance occurring in section 2(1)(d).Whenever there is a fault of negligence that will constitute a deficiency in the service on the part of the insurance company and it will perfectly open to the concerned aggrieved customer to approach the Redressal Forums under the act seeking appropriate relief.”

– L.I.C. Agent has no authority in collecting the premium

The supreme court held that under regulation 8(4) of life insurance corporation of India (agents) regulation, 1972 which had acquired the status of life insurance corporation agents rules with effect from January 31, 1981, which were also published in the gazette, LIC agents were specifically prohibited from collecting premium on behalf of LIC and that in view thereof an inference of implied authority cannot also be raised.

– Rejection of claim as false after full investigation

The national commission held as follows:

” from the facts disclosed by the record and particularly averments contained in the consumer affidavit filed by the first respondent it is seen that the insurance company had fully investigated into the claims put forward by the complainant that his claim was rejected. Thus it is not a case where the insurance company did not take a prompt and immediate option for deciding the claims against the insurance company. Having regards to the facts and circumstances of this case and the nature of the controversy between the parties we consider that this is a matter that should be adjudicated before a civil court where the complainant as well as the respondent will have ample opportunities to examine witnesses at length, take out the commission for local inspections etc. and have an elaborate trial of the case.”

– Unilateral reduction in the insurance amount.

The national commission held that the insurance company is not entitled to make a unilateral reduction of Rs. 4, 29,771 from Rs. 30, 12,549 at which its own surveyor assessed the loss.

– Mere repudiation does not render the complaint not maintainable.

The national commission overruled the objection of the insurance company that merely because the insurer had totally repudiated its liability in respect of the claim, no proceedings could validly be initiated by the insured under the consumer protection act.

– Mere unilateral repudiation does not oust the jurisdiction.

The national commission held that merely because the insurer has repudiated the insurance claim under the policy unilaterally, it is difficult to hold that the various redressal forums constituted under the consumer protection act, 1986 will have no jurisdiction to deal with the matter that if such a contention of the insurance company can get a report from the surveyors, repudiate the claim and oust the jurisdiction of the redressal forums, that the redressal forums are, therefore, bound to see whether or not the repudiation was made in good faith on valid and justifiable grounds that if the surveyor or surveyors choose to submit the wrong report and the insurance company repudiates the claims without applying its mind then the repudiation cannot be said to be justified that the report of the surveyor will show that the investigations have been proper, fair and thorough and that it has to be remembered that the surveyors bread comes from the employer.

– Mere unilateral repudiation no ground to oust jurisdiction.

The national commission repelled the objection and observed as under:

“Ordinarily a remedy is available to a consumer in Civil Court but mere repudiation of claim arising out of policy of insurance under section 45 of the insurance act, 1938, cannot take away the jurisdiction of the redressal forum constituted under the act. The avowed object of the act is to provide cheap, speedy and efficacious remedy to the consumers and it is with this object that section 3 of the act lies down as follows:

3. Act not in derogation of the provisions of any other law: – the provisions of this act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

The national commission overruled the objection in the view of repudiation of contract of insurance by the corporation; the redressal agencies under the act cannot entertain the claim of the insured and reiterated the law laid down by it in the Divisional Manager, Life insurance Corporation of India, Andhra Pradesh v. Shri Bhavnam Srinivas Reddy.

– Removal of insured goods on attachment no theft.

It was ruled in the stated case that attachment of certain items of insured Machinery and goods by the bailiff of a civil court, though later found to be illegal and consequent removal did not amount to theft and or house breaking by force so as to entitle the insured to prefer a claim under the policy.

– When repudiation amounts to deficiency and when it does not?

The national has held:

In M/s Rajdeep Leasing and Finance and others v. New India Assurance Company Limited and others –

That rejection of the claim by the insurance company after examining and considering the two separate survey reports from qualified surveyors and three legal opinions from different oriental counsels could not be said to constitute a deficiency in service so as to give a rise in the cause of action for a complaint under the consumer protection act.

In Oriental Insurance Co. Ltd. V Modern Industries Ltd. , the national commission has held that where the cover note inter alia mentions that the risk is subject to the usual terms and conditions of the standard policy, it is equally the responsibility of the complainant to call for these terms and conditions even if they are not sent by the insurance company, as alleged, to understand the extent of risk covered under the policy and associated aspects.

In Life Insurance Corporation of India v. Dr. Sampooran Singh

The complainant had taken out an insurance policy of 40,000 rupees in 1982, for the purpose of payment of estate duty on his only residential house in chandigarh in the event of his death and paid 5 premia, but with the abolition of estate duty on one residential house owner in 1985, the policy became inoperative due to the act of the state and not due to any deficiency on the part of the corporation any dispute between the parties as to the amount payable there under cannot be construed as deficiency in service on part of the corporation.

In LIC of India v M/s Kanchan Murlidhar Akkalwar

The complainant applied to the opposite party for housing loan, and on the advice of the latter, she took two LIC policies, one for Rs. 90000 and the other for Rs. 20000 entered into an agreement for the purchase of the house with the house with the owner on the advice of the opposite party obtained a fire policy for Rs. 2 lakhs. The opposite party advised the complainant to obtain a release deed from the zilla parishad co operative society in respect of the she proposed to purchase with a certificate that the said plot is not mortgaged therein. The complainant got a certificate from the Maharashtra government that the vendor had re paid the housing loan and interest thereon due to Zilla Parishad Krishi Karmachari Sehakari Gribe Narman Sanstha and that there was nothing outstanding from him towards loan amount or interest. Still the opposite party did not release the loan. On these facts the national commission by its majority judgement observed that:

“We have carefully gone through the records and heard the counsel. Clause 1 (c) of the loan offer letter clearly states that the advance of the loan is subject to the property being free from encumbrances to the satisfaction of the insurance company and a good and marketable title. At the same time it appears that the respondent-complainant had to go through a number of steps, although necessary, having financial implications and causing mental and physical stress to her and at the end of all of which she was told that no dues certificate given by the maharashtra government in respect of the prospective seller of the property in question, was not “release of mortgage” certificate that was obtained. The respondent complainant perhaps also had in her mind the case of Mr. Vaishempayam who got the loan under similar circumstances. Thus the evasion petition is disposed of as above.”

CONCLUSION

This project topic is increasingly beneficial in the modern times with the consumer protection rights being redressed with due care. It is being advertised in the mass media in our country. The slogan which our consumer is using is: “JAGO GRAHAK JAGO”. The time has come to realize the ideal market situation in which the buyers are not persuaded or coerced falsely into buying items which are of no use to them at all. Besides the relationship between buyer and seller should not be damaged at any cost. The relationship between the buyer and seller is said to be a fiduciary relationship and the trust between them should remain intact. A time has come in which the customer should get his proper position in the market conditions. He has to have proper knowledge about what is going on in the market and the concerned prices and the supply and the different other practices referred to.

Insurance is a very sensitive issue in the modern times. People are being hoodwinked into signing up in companies which are turning out to be frauds in the true sense of the term. This project has been an eye opener to me and I have come to realize the importance of the consumer protection act and insurance.

Posted in general | Tagged , , | Comments Off on Insurance In Tort Laws

Construction Insurance – Importance and Coverage

Construction involves large number of manpower and huge investments of money. The workers at a construction site risk their lives working at great heights, with dangerous tools, toxic materials, heavy equipment, under tunnels, etc. Hence, construction is associated with high amount of risk for money and lives. A slight negligence or bad fortune on part of the worker or owner may prove too costly. It may lead to a huge financial loss. These unfortunate events require tools, which can bail the company out of the situation. Here arises the need of ‘Construction Insurance’, the risk management tool, customised specifically for the construction industry. Construction insurance is like any other insurance, which is used to protect the various parties associated with construction process.

A comprehensive construction insurance policy covers all the expenses that may occur due to property damage or personal injuries at the construction site. This insurance not only includes the organization owner, but also workers, employees, tenants, sub-contractors, sole proprietors and business partners.

Importance of construction insurance

As discussed above, construction involves usage of heavy equipment, materials, labour, etc. and is more prone to accidents. Since the business stands liable for any accident on the construction site, it is the business owner or the contractor that should pay for the medical treatment charges of the injured or compensation to the families, in case of death of the worker.

Material costs associated with construction are very high. Any damage to the structure or the materials leads to huge financial loss. Insured with the construction insurance, one can seek financial assistance from the insurance company.

The buyers of the flats or the constructed property will have all rights to sue the construction company, in case of faulty construction. In such cases the construction company has to pay for the remodelling or repairing the constructed site. Construction insurance protects the builders from those claims, by providing financial assistance.

Apart from the above circumstances, construction insurance provides wide coverage, providing security to the business in case of unpredicted events.

Four main areas it covers

Construction insurance is very significant in terms of its coverage. It is very comprehensive and is specifically designed to cover every aspect of construction process, to make the business process flexible. Construction insurance covers four major areas of business insurance. They are:

Public liability insurance

Public liability insurance is a general insurance to be possessed by any business which involves interaction with the customers or people in general. Public liability insurance as part of construction insurance helps the businesses in case any damage to third party property or individuals is caused by employees or the tools used in construction.

Employers liability insurance

As the construction industry involves lot of risks, any worker can get injured or die at any point of time, due to the faulty equipment or negligence of supervisors or co-workers. Employers are responsible for the health and safety of their employees at construction site. Moreover, the employees will have every right to sue the owner and claim for compensation. In case of such unexpected events, the employer or the owner can benefit from the construction liability insurance, as the insurance company pays the medical costs or the compensation associated with the claims.

Contractors all risks insurance

Contractors all risks insurance is customised for construction businesses. It provides assistance for contract works of new houses, theft of materials or tools, damage to the materials or tools due to unexpected events, sudden stoppage of on-going works of new houses, owned or hired plants, etc. This insurance acts as a perfect help for the most commonly incurred accidents in the construction process.

Personal accident insurance

This insurance is specifically designed for managers, sole proprietors or business partners. This is useful in the cases, where the person injured can’t blame any other person for the injury caused to him. This is helpful in providing assistance during the period for which the injured person cannot get income.

Construction insurance is very important for construction businesses as the damage or the financial loss occurred is very hard to be recovered. Businesses should realise that the cost of premiums for insurance is less when compared to the compensation costs. Therefore, it can be concluded that, construction insurance is very valuable in making the business sustain for long run.

Posted in general | Tagged , , | Comments Off on Construction Insurance – Importance and Coverage

Advantages of Bus Travel

Bus is the most popular transport nowadays. Many people choose bus as the best transport for them because of the many advantages they find in it. Others never get on a bus, thinking only of the disadvantages, which are truly a lot. Here I will tell you the reasons why it is better to choose travelling by bus rather than travelling with your car for example.

The good standpoints for travelling by bus

Many people choose bus transport because it is cheap. This is the main reason why when you get on a bus you will see mainly students and old people. The tickets for long destinations are much cheaper than the flight tickets. You can also by a card for every month and travel at reduced fare. This is also a good advantage to choose bus transport, because it saves you money that you can spend on your next vacation.

Another good advantage of bus transport when going on short travels is that bad weather won’t be a problem for the bus driver. If you are planning to go to the nearest village with your bicycle and it starts raining or snowing, you will get wet for sure. If you choose the bus, you can save yourself this uncomfortable situation and it also can save you money because it won’t get you sick. Also if you choose to take a flight and the weather surprises you and a storm comes out, you may be waiting for hours because of delayed flights.

However, this won’t happen if you choose bus travel. In modern buses, you will have an air conditioner, toilet, the bus-hostess will offer you drinks and snacks to make your trip more enjoyable, and there are also at least two TV sets in new travel buses. So you can enjoy your trip watching a movie and having a snack without worrying when will be the next stop for the toilet. Also if you are travelling on a bus for more hours or even days, you can always make new friends there. So, the new social contacts are the other advantage of the bus. And if you have to choose between a plane or bus, remember that you will see much more if you are travelling with a bus. The bus also stops at many places during the travel and in that time, you can have a coffee or a cigarette if you are a smoker. In the plane this could not be done.

Another good advantage of buses is that they reduce the traffic jams in the rush hour in big cities. Imagine that everyone uses cars. The traffic jams will be a lot bigger than they are now. In some countries like India, a bus can gather more than 150 passengers. Imagine that all these people were using their cars instead of bus transport the cities will be crowded.

Posted in general | Tagged , , | Comments Off on Advantages of Bus Travel

Top 7 Reasons New Insurance Agents Fail to Reach Success

I would like to offer some insights as to why I believe such a high percentage of Insurance Agents fail in their first couple years in the insurance business.

There can be multiple reasons that contribute to a new insurance agents failure. Here are the most common reasons I have found that lead to failure.

  • Most Insurance Agents have a Limited product portfolio and are unable to cross sell other insurance products.
  • Agents do not have a proven sales track or sales system to follow which most new insurance agents need to get results quickly.
  • They do not create consistent cash flow from insurance sales quick enough and must leave the insurance business to go back to an hourly paying job just to survive.
  • New Insurance Agents start out in the insurance business with little or no reserves to fall back on. Most businesses require some upfront capital or reserves to get started.
  • A lot of agents do not get enough training (Product or Sales) to give them a fair chance of making it in the insurance business.
  • Insurance Agents are not taught effective prospecting and marketing techniques that generate a consistent flow of sales prospects.
  • Some people simply do not have the drive, work habits, persistence, self motivation or ability to handle rejection that it's takes to survive in an insurance sales career.

From my experience of hiring and training insurance agents over the past 23 years, I have found the following items need to be present in order to maximize a new agent's chances for success long term in the insurance industry.

  • A quality multi-product portfolio to offer multiple insurance solutions when different needs are uncovered during the initial fact finding process with a potential client.
  • A proven sales track and presentation that can be taught and implemented very quickly. One that gets sales results but also generates a generous flow of new prospects and referrals.
  • An advance commission system that provides weekly cash flow so the new agent can focus on their training and sales, not their bills that are due.
  • Tools that make learning and growing in the insurance business fun and automatic. (Ie Archived Training Videos, Health and Life Quote Engines, Live Product and Sales Training Webinars, etc.)
  • Quality contracts that provide immediate 100% vesting rights and commission growth opportunities to General Agent commission levels.

At National Marketing Group we have learned over the years the essential pieces that new agents need to not only survive but thrive in the insurance industry. Our mission statement says it all. "First, to offer the Independent Insurance Agent a support system that provides a platform for success in Insurance Sales. Second, to build long term relationships through a foundation of trust and commitment."

We sincerely believe the 80% -90% failure rate of new insurance sales agents entering the insurance industry can be significantly reduced when the right agent support system is in place. We encourage you and invite you to join us in this very exciting and rewarding career opportunity. Hope to hear from you soon!

Posted in general | Tagged , , | Comments Off on Top 7 Reasons New Insurance Agents Fail to Reach Success

The Relationship Between Insurance and Finance

Insurance and finance are closely interwoven fields of business, not least because they both involve money. They also often both involve speculation and risk, and often where one goes, the other will follow. Take property investment for example, it involves a large amount of capital out lay, swiftly followed by insurance to protect the capital investment. It would be ridiculous to spend such a vast sum of money on a venture and not protect it against possible damage. It therefore makes sense to store information on these two subjects together, as the relationship is so logical.

Insurance is a form of risk management used to protect the insured against the risk of a loss. It is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for a premium. There are different kinds of insurance for just about every conceivable event. The most common insurance is probably life insurance, which provides a monetary benefit to a decedent’s family or other designated beneficiary.

It can cover funeral or burial costs and can be paid out to the beneficiary in either a lump sum or as an annuity. Property insurance is one of the more necessary insurances as property is extremely expensive and if it is lost or damaged for some reason (fire, earthquake, flood) it can be very difficult to replace without adequate reimbursement. Travel insurance used to be seen as an unnecessary expense and is still viewed as such by many. Its importance is, however, being increasingly recognised by the public at large. It is cover taken by those who travel abroad and covers certain unforeseen events such as medical expenses, loss of personal belongings, travel delays etc. There are numerous other types of insurance, too many to mention, all vital if you want to protect something of particular importance to you or another.

In the world of finance there are many sub-categories, also too numerous to mention but a few will be included here. Forex, or the foreign exchange market wherever one currency is traded for another. It includes trading between banks, speculators, institutions, corporations, governments, and other financial markets. The average daily trade in the global forex is over US$ 3 trillion.

Tax consulting usually involves CPAs and tax lawyers in addressing any tax issues that you may have. There may also be Professional Strategic Tax Planners and Enrolled Agents, depending on the company that you hire. They will help you reduce your tax debt, eliminate tax penalties, an innocent spouse claim, tax liens, bank levies, and preparing unfilled tax returns, as well as any other tax resolution problem that you might have.

Property investment is usually when an investor buys property with an eye to generate profit and not to occupy it. It is an asset that has been purchased and held for future appreciation, income or portfolio purposes. In some instances an investment property does not have to be held for profit, as some landlords in New York lease office buildings to non-profit organisations for tax purposes. Homeowners consider their homes to be investments but they aren’t classified as investment properties. Perhaps if you’re buying your second or third home, it can be considered an investment property, especially if you plan to rent it out to help pay off the home loan.

Business networking is a marketing method, which is as old as business itself. It’s been around since ever since people learned to hold a glass of whiskey and schmooze. In fact, its probably been around a lot longer, Cro-Magnon man probably gathered around the newly discovered fire and showed each other their collection of animal teeth and traded them. Creating networks of crocodile teeth owners and sabre toothed tiger owners, who tried a take over bid against the sabre toothed leopard owners. Business networking is designed to create business opportunities through social networks. It helps if the people involved are of the same frame of mind.

These days a very handy way of business networking is via the Internet on the various social media available. But it must be said that very little can beat the intimacy and trust created by face-to-face relationships. Also, where would our businessmen be without their whiskeys and weekly schmooze?

Posted in general | Tagged , , | Comments Off on The Relationship Between Insurance and Finance

Insurance As a Device For Handling Risk

The real nature of insurance is often confused. The word “insurance” is sometimes applied to a fund that is accumulated to meet uncertain losses. For example, a specialty shop dealing in seasonal goods must add to its price early in the season to build up a fund to cover the possibility of loss at the end of the season when the price must be reduced to clear the market. Similarly, life insurance quotes take into consideration the price the policy would cost after collecting premiums from other policyholders.

This method of meeting a risk is not insurance. It takes more than the mere accumulation of funds to meet uncertain losses to constitute insurance. A transfer of risk is sometimes spoken of as insurance. A store that sells television sets promises to service the set for one year free of charge and to replace the picture tube should the glories of television prove too much for its delicate wiring. The salesman may refer to this agreement as an “insurance policy.” It is true that it does represent a transfer of risk, but it is not insurance.

An adequate definition of insurance must include both the building-up of a fund or the transference of risk and a combination of a large number of separate, independent exposures to loss. Only then is there true insurance. Insurance may be defined as a social device for reducing risk by combining a sufficient number of exposure units to make the loss predictable.

The predictable loss is then shared proportionately by all those in the combination. Not only is uncertainty reduced, but losses are shared. These are the important essentials of insurance. One man who owns 10,000 small dwellings, widely scattered, is in almost the same position from the standpoint of insurance as an insurance company with 10,000 policyholders who each own a small dwelling.

The former case may be a subject for self-insurance, whereas the latter represents commercial insurance. From the point of view of the individual insured, insurance is a device that makes it possible for him to substitute a small, definite loss for a large but uncertain loss under an arrangement whereby the fortunate many who escape loss will help to compensate the unfortunate few who suffer loss.

The Law of Large Numbers

To repeat, insurance reduces risk. Paying a premium on a home owners insurance policy will reduce the chance that an individual will lose their home. At first glance, it may seem strange that a combination of individual risks would result in the reduction of risk. The principle that explains this phenomenon is called in mathematics the “law of large numbers.” It is sometimes loosely referred to as the “law of averages” or the “law of probability.” Actually, it is but one portion of the subject of probability. The latter is not a law at all but merely a branch of mathematics.

In the seventeenth century, European mathematicians were constructing crude mortality tables. From these investigations, they discovered that the percentage of males and females among each year’s births tended everywhere toward a certain constant if sufficient numbers of births were tabulated. In the nineteenth century, Simeon Denis Poisson gave to this principle the name “law of large numbers.”

This law is based on the regularity of the occurrence of events, so that what seems random occurrence in the individual happening simply seems so because of insufficient or incomplete knowledge of what is expected to occur. For all practical purposes the law of large numbers may be stated as follows:

The greater the number of exposures, the more nearly will the actual results obtained approach the probable result expected with an infinite number of exposures. This means that, if you flip a coin a sufficiently large number of times, the results of your trials will approach one-half heads and one-half tails, the theoretical probability if the coin is flipped an infinite number of times.

Posted in general | Tagged , , | Comments Off on Insurance As a Device For Handling Risk

The Different Types of Home Insurance HO-1 to HO-8

People that are concerned with their house always try to do the best thing for it. You want to ensure the financial security of it in the event of disasters damages and other occurrences.

It is important that one should have home insurance to protect the expensive investment you have and provide security for any damages might occur to the house.

Here are the different types of home insurance:

  • HO-1 Known as Basic Home Owners Insurance: This covers your dwelling and personal property against damages or losses including fire and lightening, theft, vandalism or malicious mischief and windstorm
  • HO-2 Known as Basic Homeowners Insurance Plus: HO-1 is included in this kind of categories plus other damages such as falling objects, electrical surge damages, 3 categories of water related damages from utilities or appliances, weight of ice snow,
  • HO-3 Known as Extended or Special Homeowners Insurance: 17 stated perils included in this categories of HO-2. This provides extensive coverage of your home like the structure and the content inside your house. This cover large area of your homeowners insurance also known as All Risk Policy.
  • Ho-4 Known as Renter Insurance: This kind of insurance cover the personal property only from the 17 HO-2 perils in which this policy are highly recommended for people renting an apartment which is also called as Renter’s Policy.
  • HO-5 Known as All Risk: which covers building and the personal property and is something similar to HO-3 but it differs in terms which have better protection than HO-3. This cover larger area of damages or losses with wider boundaries that owners and its properties as well is liability that might arise from passer -by or outsider.
  • HO-6 Known as Condominium Owners Insurance Coverage: This is designed for condominium owner’s which covers personal property, building items, etc. and this provides protection for claims made for mishap or damages occur. Fire, thefts and other forms of loss that will occur in the future is included.
  • HO-8 Known as Basic Older Home Coverage: Covers actual cash values or repairs in rebuilding cost and personal property where in this is designed for older house or so called historical house.

These are some of the different types of home insurance that you need to know before you get your coverage. You should know the different types you want to buy to satisfy your needs and the benefits you can get from this types of coverage.

Buying is easy but you need to look at your budget on where your money fall in on what type of insurance you can buy. Shopping is the best way to do before buying. Comparing prices from one insurance company to other is where you can get the cheaper price for your home insurance.

No time to go around to shop? There is an easy alternative way to shop without hassle and you own your time. You can go shopping online through the internet where you can explore the different types of homeowners insurance you need and you can easily compare the prices. Lots of sites to go 24/7 and not only you will learn a lot but it also give you some idea where to go next time you need something and you need to shop for it.

Posted in general | Tagged , , | Comments Off on The Different Types of Home Insurance HO-1 to HO-8

Why Donegal Car Insurance Is the Best

The Donegal Insurance Group tracks its beginnings way back to the birth of the Donegal and Conoy Mutual Fire Insurance Company in 1889. It all started in Marietta, Pennsylvania when the area farmers decided to form the company to protect themselves preemptively from losing their properties in fire Accidents and the potential impact that is sure to follow, especially the financial aspect of that impact. As time passed by, they changed its name to the Donegal Mutual Insurance Company. And one of the products it offered to the buying public is the Donegal car insurance.

Bodily injury and property damage liability is the main coverage provided by Donegal car insurance policies. It also includes a vehicle's physical damage coverage. The bodily injury liability accommodates coverage for any legal responsibilities and obligations in the case of accidents that caused any kind of injury to other drivers, their pedestrians and passengers. The property damage liability coverage on the other hand, provides protection for unjust accidents that damages other people's properties. And if ever that accident will invelve any legal costs, especially defense, then it will also be covered as well. There is also a certain type of coverage intended for any uninsured individual, even the underinsured. The uninsured and / or underinsured coverage will protect that customer and his or her immediate family members from the costs of the injury in the event of an accident that was caused by a motorist not insured or those underinsured.

There are also other attractive features included in its auto insurance policies:

  • They offer good student discounts.
  • The Donegal insurance system can account for high chargeable accident thresholds
  • They also offer different programs regarding first accident forgiveness. This means that Donegal Insurance will not raise your insurance rate after the first at-fault accidents.
  • Excellent drivers are entitled extra edge discounts.
  • PACE protector endorsement program.

The car insurance policies offered by Donegal have various options to help you get the best out of your coverage. There's also a collision coverage that handles the repair costs of your vehicle that is damaged by the other party in an accident. Another type, the "other than collision" coverage is offered in particular in cases like fire, theft, vandalism, glass breakage and other known perils.

You also have the option to add coverage for the towing of your disabled car and other labor charges, and a rental reimbursment coverage to handle payment of the rented car cost in the event of a spiritual loss. You can also save on Donegal's insurance coverage if your car possesses passive seatbelt restraints and air bags. It would also be ideal if you have anti-theft devices and anti-lock brakes in your car. You can be qualified for credits with these. There are also other wonderful discounts that you can enjoy if you car pool and if you have undergone a driver's education class. Save additional money as you avail the multi-car discount program. You can qualify if you have more than once insured car. Now you can see why the Donegal car Insurance is the best.

Posted in general | Tagged , , | Comments Off on Why Donegal Car Insurance Is the Best

Types and Examples of Larceny

When someone is talking about larceny crimes they are talking about the crimes that are associated with personal property. Property has two different titles, which are personal or real. Personal property is any real property that has been cut from the ground. Personal property can become a real property if it becomes attached to the ground. Real property is any property that is affixed to the ground like an apartment or house. The definition of larceny is liable to definition changes that are determined by severance or attachment. When someone is charged with crimes against property, it means a crime in which the defendant acquires property which belongs to someone else. These can include extortion, receipt of stolen property, larceny, false pretenses, robbery.

If you are charged with larceny it means that you have illegally taken of someone’s property, with the intention of permanently dispossessing the owner of their property. It could be goods or money. There are many different forms of larceny, which can include:

• Petty-this is where the property amounting to a smaller prices is being stolen. For a crime to be considered petty larceny the object stolen has to be less than four hundred dollars. If they are convicted of this crime they will have to pay a fine or do jail time.

• Grand-this is also known as felonious larceny and occurs when the property stolen is more than four hundred dollars. In New York, the amount of the robbery has to be more than one thousand dollars for it to be considered a felony. If you are convicted of this misdemeanor are subjected to time in prison. If the crime committed is a crime of a large magnitude can result in longer prison time. In addition to going to prison, you are also liable for fines related to the crime, court fees, and restitution payments.

Examples of larceny

• Snatching a purse-if the offender uses force to snatch the purse and instills fear in the victim it is known as robbery. If there is no force or fear in the victim then it is larceny.

• Shoplifting-this crime occurs when an individual shoplifts certain items from a store and does not pay for them. It also happens if you switch price tags so you are paying an lesser amount that what the actual value is.

• Embezzlement-this crime is when there is misappropriation of funds from an account that belongs to the victim.

• False check -this is a crime when the person issues bad checks to an owner for acquiring the property.

Posted in general | Tagged , , | Comments Off on Types and Examples of Larceny

How to Do a Sales Pitch in Commercial Real Estate

In commercial real estate, you will undertake a variety of presentations, in a variety of circumstances. Most of them are business-like in nature, focusing on the needs of the tenant, the property buyer, or the property seller.

Get to the core issues

Each of these groups has unique property requirements and points of focus. It is their needs which must be identified and clearly addressed in the sales pitch or presentation. Many successful commercial real estate agents will have a preliminary meeting with the client or customer so that they can identify key issues and concerns. This allows the commercial agent to return to the client or customer in a few days with a well structured proposal that addresses the needs of the customer or client.

It’s all about THEM, not YOU!

When you design an investment or commercial property proposal for presentation, the document should be 90% regards the property and the client. Frequently you see this rule disregarded or broken with the proposal document being largely regards the agency and the personnel.

Rarely is the property transaction a simple matter of the property rental, the property price, or the physical elements of the property. In most situations, it is the combination of these things which must satisfy a fundamental equation of need that the customer or client has. In getting them to this fundamental need, you will identify an element of pain that the customer or client is experiencing. This is what you focus on.

They are Experienced

It is interesting to note that many clients and customers in commercial real estate are reasonably comfortable in circumstances of business negotiation. This means they may not tell you the total big picture or all the elements of a transaction until they are ready. Conversation and connection in the presentation process should be biased towards the client or customer using well selected questions which allow the agent to interpret the body language coming from the client’s response.

When you believe you have identified the element of clients pain related to the property transaction, you start to magnify the problem in terms of today’s market, then offering stable and logical solutions that your real estate agency business can provide to the client or customer. Invariably, the commercial real estate transaction in today’s market centres on financial matters such as:

  • High vacancy factors
  • Other property choices and chances are available
  • Underperforming leases
  • Unstable cash flow
  • Unstable tenancy mix
  • Tenanted conflict
  • Escalating building operating costs
  • A shift in demographics which exposes the property to a unstable future
  • Mortgage payment pressures
  • Age of the asset
  • Needs for refurbishment or extension
  • Competition properties attracting tenants away from the subject property

This type of information and interpretation requires your intimate knowledge of the local region. This is by both property type and by location. This is the higher value that you bring to the customer or client. Being able to distinctly define local market awareness is a major advantage in any commercial real estate presentation or sales pitch. You must be seen as the best knowledgeable solution to the problem.

From Experience

After many years working exclusively in the commercial real estate industry, I found that my unique skill was in market knowledge and the display of that in any formal presentation to the client. Being able to talk about market trends and financial performance in a solid and sound way will help the client understand that they need your services. Coupling that with your extensive and relevant database of enquiry clearly shows the client that they need you.

A fantastic commercial real estate presentation is a function and balance of lots of things. Things like:

  1. A well established pre-planning process is a strategic advantage for every commercial real estate presentation. Strategy is everything in commercial real estate. Every property presentation requires planning.
  2. Making sure you are asking the right questions of the client or prospect. Plan your questions relative to the subject property so that you help the client think about opportunity and changes that are possible.
  3. Using your market knowledge and giving good answers. Have a variety of market facts and trends available to call on. Feed them into your presentation; facts are always useful. They can also be used as a channel to direct the discussion when the client is forcing you to justify your approach or your experience. Confidence and control must be the basic rule of your property presentation. When the client takes control of the presentation you have lost.
  4. Using your experience in the marketplace so that you are telling relevant stories of success in similar properties. Stories of other properties will always interest of the client.
  5. Making sure your personal presentation is optimised for the connection in the presentation. It can be that you are using a combination of the proposal document, the marketing document, and computer slide presentation, samples of your database, photographs of the subject property projected on to slides, and photographs of comparable properties projected on to slides.
  6. Choosing the placement of people at the table or strategically positioning them in the room is always important. Much has been written about where you should sit relative to the client. The basic rule is adjacent to the client rather than across an area of barrier such as a table. Being within arm’s reach allows you to pass documentation to the client at the appropriate time. Documentation should not be provided to the client until you are ready for them to review it; otherwise it is a distraction of their attention.
  7. Make sure that your proposal is simple and yet well directed with a clearly defined outcomes of sale or lease. Many proposal documents in commercial real estate are much too wordy so the main messages are lost and not clearly defined. The best proposals are less wordy and more illustrative. The best balance of a commercial real estate proposal is a mixture of 25% words, 25% pictures, 25% graphs, and 25% white space. This becomes a document which is clearly read and understood.
  8. Combine good illustrations and photographs of the subject property into the proposal or presentation so that any lengthy descriptions or paragraphs are broken up. This will keep interest of the client in your documentation.
  9. Make sure that your marketing package is value for money, and yet reaching the target market that the property serves or needs to attract. All too often, we see examples of generic marketing by the commercial real estate agent to the broader and less specific marketplace. Showing the client that you clearly know and will attract best the target market will always help your conversion to a potential listing. Be very specific about the target market and how you will reach it.
  10. Ensure that your commission costs are fair and reasonable for the location. In most circumstances, discounting your commission should not be an option as it will make you poor and remove or detract from your enthusiasm for the sale or lease. ‘Cheap’ means ‘cheap and without focus’ and the client needs to know this. The property deserves better. You are not cheap because you are the best and you do a great job. A fair commission is always paid for a positive property outcome.
  11. Always provide testimonials that are relevant to the property transaction. When you combine relevant history and details of happy customers into your presentation you will make the client feel more comfortable.
  12. Always display clear and sound market knowledge that impresses the client relative to their property. This will include extensive awareness of comparable properties that compete with the subject property. You should be able to talk solidly about property prices, comparable rents, rental growth, returns on investment, changes to the future demographics of the area, and properties in the immediate precinct of relevance. In many cases, it pays to walk around the local area just prior to any property presentation so that you bring immediate and clear pictures of the precinct to the discussion. Many times this has been of significant advantage in my presentation processes. Talking about neighbouring properties localises the client and their thought processes.
  13. Come up with a variety of ways to serve the client. Innovation and relevance will always impress. In today’s market, this is relatively easy considering the marketing opportunities and tools provided by the internet & technology. Be proactive in your property promotion processes so that the listing for sale or lease stands uniquely different in its marketing campaign from the others in the area. This does not have to be expensive to the client or to your office, given that the internet and electronic technology is historically cost effective. In today’s market, the traditional methods of publicising the property in the property pages of the local paper, is becoming much less important in the marketing campaign. Most commercial property buyers and tenants research the market from the Internet first and foremost.
  14. Almost every property agency will say that they have excellent communication and connection skills to support the property promotion process. From experience, this is largely incorrect and typically the average commercial salesperson or leasing person will exercise ordinary communication channels with the client. Put yourself in the shoes of the client. They expect and deserve frequent updates on the promotion of the property even when nothing is happening or when the adverts are producing little response. When a property campaign is not producing the results, it is important that you act or adjust with alternative recommendations and strategic changes to the promotional campaign for the client to consider. Rarely would you get to the property campaign correct in the first week. It is in this time that you must consider fine tuning the promotion process so that the target market is being reached in a timely and effective way. This means that every property enquiry generated from your promotions must be tabulated so that you understand what channels of marketing work most effectively with the property in question.
  15. When addressing the client or the client group in a formal property presentation, the answers and information you give must be delivered well and provide relevant solid property knowledge, in a practiced and professional delivery. Any sales or presentation tools relative to the property must be relevant and you should know how to use them with exceptional skill. Fumbling and faking information is not tolerated by the client.

So there you have it. These are some of the key skills to use in a commercial real estate presentation. Whilst many real estate agents think that they are the best alternative in the market to promote sell and rent commercial property, the reality is they do not get the message across when it matters most in front of the client.

To be the best commercial real estate agent in your area, you must show that you are just so, and you do this in the first 10 minutes of the time that your presentation takes. The client will have formed an opinion by then.

Be prepared to walk away from any demands for discounting that the client or customer demands. In this market they need a great commercial real estate agent providing a great job; discounting is not an option. Show pride in your services and walk away when the client demands discount in marketing or lower commissions.

Posted in general | Tagged , , | Comments Off on How to Do a Sales Pitch in Commercial Real Estate