Thursday, July 6, 2017

Insurance Board cuts cost of riot, protest insurance products down

Insurance Board (IB) – the insurance sector regulator – has reduced premiums on insurance products that cover damages inflicted by riots, strike, malicious attacks and sabotage terrorism by up to 50 per cent.
The new premium rates will come into effect on July 16. The board had made it mandatory for those buying insurance products to protect themselves from risks related to riots, strikes and acts of terror after the Maoist insurgency reached its peak. The regulator has now reduced the premium on coverage of these risks following decline in the number of such violent incidents.
According to the board's director Shree Man Karki, the board had revised the premium rates to relieve customers from extra financial burden, as cases of riots, protests and acts of terrorism are not heard very often.
The board has reduced premium on riot and strike insurance coverage for private and commercial buildings to 0.02 per cent of the coverage amount from 0.026 per cent of the coverage amount.
Similarly, premiums on riot and strike insurance coverage for warehouses range from 0.035 per cent to 0.060 per cent of the coverage amount.
Previously, the premiums on these products ranged between 0.044 per cent to 0.08 per cent. Premium on riot and strike coverage for factories, on the other hand, has been reduced to 0.04 per cent from 0.05 per cent of the coverage amount.
Likewise, premium on riot and strike coverage for shops has been reduced to 0.08 per cent down from 0.104 per cent of the coverage amount.
For movie theatres, exhibition halls and parks, premium has been brought down to 0.05 per cent of the coverage amount – down from 0.07 per cent – while media houses and telecom companies have to pay a premium of 0.035 per cent of the coverage amount – down from 0.044 per cent – to protect their assets from risks related to riot and strike.
The board has also revised premiums on riot and strike insurance coverage for power houses, electricity transmission and distribution systems, and buildings under construction.
As per the revised rate, power houses and electricity transmission and distribution systems will have to pay a premium of 0.035 per cent of the coverage amount, while buildings under construction will have to pay premium of 0.02 per cent of the coverage amount.
Likewise, the board has reduced the premium for malicious damage under fire insurance policy to 0.05 per cent of the coverage amount.
The board has also fixed the premium for household insurance at 0.1 per cent of the coverage amount.
Meanwhile, the Insurance Board has also revised premium on personal accident insurance coverage. From July 16, personal accident insurance product with coverage of up to Rs 2 million can be bought upon paying 0.01 per cent of the coverage amount. Currently, this premium rate is only applicable for personal accident insurance with coverage of up to Rs 1 million. 

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