Insurance Caselaw Quiz Contest – Series 2

A Brush with Insurance Caselets for Professional and Students – Series 2

Prof K.K.Krishnan, Prof.(Dr.) Abhijit K. Chattoraj   and Prof. Monika Mittal of Centre of Insurance & Risk Management, BIMTECH comes out with series of caselets every month. Insurance being a technical subject requires deep analysis and understanding of various underwriting and claims aspects. In this age of extreme completion, the Insurance market is moving away from Risk based underwriting to sales based underwriting. In order to encourage and develop analytical skills, we are starting this series which will cover practical aspects of Insurance Underwriting and Claims. The solution would be given in the next month. The solution would be given in the following issue. The caselets are being published in The Insurance Times journal every month

Caselet  – 1

A famous B School approached an insurance company for the health insurance of its students numbering around 1500 under GMC policy (Tailor made) asking for the waiver of PED(  pre-existing disease) , 30 days waiting period and also waiver of specific period exclusions for certain ailments. The cover asked for each student, was 200000/- The B School in its admission letter stated that it would charge Rs. 10 lac per student which would include tuition fee, cost of books , boarding fee , one foreign trip , library charges and  seminar expenses. A claim of Rs.50000/- reported when a girl was hospitalised for an ailment.

Your comment on the admissibility of the claim with reason.

Caselet – 2

A building was insured with an insurance company for fire insurance. Ramesh, the insured got it insured for Rs.8, 00000/- .There was an incident of short –circuiting in the building as a result of which the building was badly gutted. There was an excess of Rs.20, 000/- per claim .Ramesh preferred a total loss of his building and asked the insurance company to pay the same. The surveyor assessing the claim- valued the cost of the building at Rs.10, 00,000/- and agreed to pay the total loss.

In the meantime, the insurance company filed a case against the architect of the building for the short circuiting under the title of subrogation, it took from the insured after paying the claim. The court after hearing the case ordered the architect to pay Rs.6, 00,000/- to the insurance company. The insurance company also incurred a loss of Rs.1, 00,000/- towards legal fees.

  1. How much the insurance company would pay to Ramesh? Show your calculation.
  2. Would the insurance company pocket the entire amount received from the architect under the title of subrogation?

Exciting prize and certificate for all correct entries. Send your answers to Editorial Team, The Insurance Times, Email: [email protected] Send the answers latest by 30th September 2017