What is 'General
Insurance'
Definition: Insurance contracts that do not come under the ambit of
life insurance are called general insurance. The different forms of general
insurance are fire, marine, motor, accident and other miscellaneous non-life
insurance.
Description: The tangible assets are susceptible to damages and a need
to protect the economic value of the assets is needed. For this purpose,
general insurance products are bought as they provide protection against
unforeseeable contingencies like damage and loss of the asset. Like life insurance,
general insurance products come at a price in the form of premium.
General insurance or
non-life insurance policy, including automobile and homeowners policies,
provide payments depending on the loss from a particular financial event.
General insurance is typically defined as any insurance that is not determined
to be life insurance. It is called property and casualty insurance in
the United States and Canada and non-life insurance in
Continental Europe.
In the United
Kingdom, insurance is broadly divided into three areas: personal lines,
commercial lines and London market.
The London
market insures large commercial risks such as supermarkets, football
players, corporation risks, and other very specific risks. It consists of a
number of insurers, reinsurers, P&I Clubs, brokers and other companies
that are typically physically located in the City of London. Lloyd's
of London is a big participant in this market.[1] The
London market also participates in personal lines and commercial lines,
domestic and foreign, through reinsurance.
Commercial
lines products are usually designed for relatively small legal entities.
These would include workers' compensation (employers liability), public
liability, product liability, commercial fleet and other general insurance
products sold in a relatively standard fashion to many organisations. There are
many companies that supply comprehensive commercial insurance packages for a
wide range of different industries, including shops, restaurants and hotels.
Personal
lines products are designed to be sold in large quantities. This would
include autos (private car), homeowners (household), pet
insurance, creditor insurance and others.
ACORD, which
is the insurance industry global standards organization, has standards for
personal and commercial lines and has been working with the Australian General
Insurers to develop those XML standards, standard applications for insurance,
and certificates of currency.
Types of general insurance[edit]
General
insurance can be categorised in to following:
·
Motor Insurance:
Motor Insurance can be divided into two groups, two and four wheeled vehicle
insurance.
·
Health
insurance: Common types of health insurance includes: individual health
insurance, family floater health insurance, comprehensive health insurance and
critical illness insurance.
·
Travel
insurance: Travel insurance can be broadly grouped into: individual travel
policy, family travel policy, student travel insurance, and senior citizen
health insurance.
·
Home
insurance: Home insurance protects a house and its contents.
·
Marine
insurance: Marine insurance covers goods, freight, cargo, and other interests
against loss or damage during transit by rail, road, sea and/or air.
·
Commercial
insurance: Commercial insurance encompasses solutions for all sectors of the
industry arising out of business operations.
·
Accident
insurance: Accidents of different types are possible at any time, at any place
and in case of any person or object. Persons and vehicles are more prone to
accidents causing injuries and damages.
·
Fire
insurance : In order to get the asset, stock or machines insured against
fire, a proposal form is to be filled in and submitted to the insurance
company. The insurance company examines the proposal with due regards to
various factors and the periodical amount of premium is fixed.
·
Theft
insurance
·
Property
insurance
·
Aviation
insurance
·
Livestock
insurance
·
Crop
insurance
Life is full of risks. That’s what makes it so
interesting and exciting. But some unexpected events can really set you back.
General insurance helps us protect ourselves and the things we value,
such as our homes, our cars and our valuables, from the financial impact of
risks, big and small – from fire, flood, storm and earthquake, to theft, car
accidents, travel mishaps – and even from the costs of legal action against us.
And we can choose the types of risks we wish to cover by choosing the
right kind of policy with
the features we need.
In general, insurance works by spreading the cost of
unexpected risks among a large number of people in the same region who share
similar risks.
When you take out an insurance policy, you pay a monthly
or annual premium.
That money joins the premiums of many thousands of other policyholders and goes
into a big pool of funds.
With any luck, you will never need to draw on that pool.
But if you happen to be one of the unlucky ones affected by an unexpected
calamity, perhaps through severe weather or accident, that pool of funds can be
used to help you up to the limit you have selected in your policy.
If things go wrong, your insurer may
either repair or replace the items that have been lost or damaged, depending on
the terms of your policy. You may also have the choice of receiving a cash settlement for the amount of money
agreed in your policy.
We can also help you with information on common
types of general insurance.
Daily, the news delivers stories of Australians who have
been caught up in events often beyond their control, losing their homes or their
cars, being injured in accidents or caught up in disasters at home or abroad.
It’s only natural to wonder what you would do if you were
in the same situation. Could you recover financially without insurance?
Sure, the risk of these things happening to you may seem
small. But if it did happen, the impact it could have on your finances, your
lifestyle and potentially your future, could be huge.
Insurance means that, in times of damage or loss,
you are less likely to be left to pay the full cost on your own, which could
leave you in a financial crisis.
Whether you’re a born worrier or an unflagging optimist,
a plan-every-detail person or someone who is happy to go with the flow,
purchasing an insurance policy (which you hopefully never have to use) buys you
something priceless – peace of mind.
Taking out insurance means that you are not facing these
unexpected risks alone.
Insurance is an integral part of any sound
financial planning but most people miss out on this aspect unless it’s a legal
obligation, like motor insurance. Moreover, life insurance still enjoys little
space in long-term planning but general insurance like a health insurance plan
or something as important as a home insurance policy is done away with. This is
basically due to lack of information and awareness. Here, we attempt to
turnaround this very situation.
General Insurance is basically a contract
where the insurance company promises to pay an agreed amount of money to the
other party, i.e. the person being insured, on the occurrence of a stated loss
other than death. So it won’t be wrong if we say that any insurance contract
that doesn’t come under the ambit of life insurance is termed as general
insurance. There are multiple types of insurance policies such as health
insurance, motor insurance, and travel insurance which one can choose to secure
his/her valuables like home, vehicle, etc.
Types
of General Insurance
While life insurance pays a certain amount to
the beneficiaries after the death of the policyholder, general
insurance protects the financial losses and damage to the policy holder’s
valuables and assets. General insurance or non-life insurance can be classified
in the following categories:
- Health
Insurance
- Motor
Insurance
- Travel
Insurance
- Home
Insurance
- Crop
Insurance
- Commercial
Insurance
Health
Insurance
The health industry in India is blooming
manifold and with the availability of sound healthcare, there is a rise in the
cost of availing the same. A health insurance plan aims to provide aid whenever
a medical situation arises.
Broadly, there are two types of health
insurance – individual and family floater.
- Individual
Health Insurance
An individual health insurance policy offers
financial aid to an individual when he/she gets hospitalized. Such an insurance
policy covers only the individual and does not provide aid to the family
members of the policyholder. One can opt for extra care health insurance policy
if your existing health insurance cannot combat your medical expenses.
- Family Floater
Policy
A family floater policy is designed to
provide medical insurance to all the members of the family regarding any stated
health issue. This type of health plans works just like an individual health
plan, the only difference is the provision of insurance for all the members of
the family and not just the policyholder. The plan works as an umbrella for the
entire family. A family floater plan proves economic too as compared to a
separate health plan for each family member.
Motor
Insurance
Whenever someone buys any type of automobile,
it is legally compulsory to back it with valid motor insurance providing at
least third party liability coverage. While third-party coverage is compulsory,
it is always recommended to go for a package policy that provides protection to
the owner of the vehicle too.
There are 3 types of plans, viz.:
Two-Wheeler
Insurance: For two-wheelers like
scooter or motorbike
Car
Insurance: For registered private
cars
Commercial
Vehicle Insurance: For vehicles
used for other than private purposes
A
motor insurance policy provides coverage against
- Third-party
liability
- Damage
to the vehicle of the policyholder due to
- Natural
disasters like flood, fire, hailstorm, etc.
- Man-made
risks like theft, burglary, etc.
- Personal
accidents to the owner-driver of the vehicle
Home
Insurance
Home is considered to be the biggest asset of
one’s life. More valuable the asset, higher would be the investment done on it.
Investing in a home insurance policy is a sound decision to make if one wishes
to protect his/her asset. Home insurance proves to be the backbone protecting
against the unpredictable damage that may hamper your house. Just like you
protect your loved ones, home insurance shall protect your home.
- Home
insurance provides protection against theft, burglary, terrorism, natural
disasters like flood, earthquake, etc.
- It
provides protection to the structure of the house along with the contents
of the house
- It
pays for the cost of construction, not for the cost of the land on which
the building is standing upon
Travel
Insurance
Even after making a proper plan for your
trip, there are chances that you may encounter emergency medical situations,
baggage loss, or expenses regarding a delay in the flight or any other mode of
transport chosen. This is when travel insurance comes into the picture. Many
insurance providers offer a range of travel insurance plans from which you can
select from according to your requirement.
- There
are various types of travel plans like a student plan, domestic travel
plan, senior citizen travel plan, and Schengen travel plan
- Travel
insurance provides coverage against loss of baggage and personal
documents, emergency medical expenses, repatriation of human remains, etc.
- Usually,
a travel insurance plan can be for anyone more than 91 days; for senior
citizens plan, one must not be older than 85 years of age while for a
student plan, the age limit varies from 16 years to 40 years
Commercial
Insurance
Commercial insurance provides protection
against the risks related to any business. There are different types of
commercial insurance plans available like commercial vehicle insurance,
shopkeeper’s insurance, mobile insurance, marine insurance, property insurance,
employee benefits insurance, etc.
- For
any commercial insurance policy, regular wear and tear or wilful
negligence falls out of the scope of coverage
- Loss
due to war or war-like perils is not covered
- There
are various companies that provide commercial insurance like HDFC ERGO,
New India Assurance, Bajaj Allianz and Bharti AXA General Insurance to
name a few
- Underestimation
of property is one common mistake done by many people. Doing this may save
some amount here and there but might cause a major loss in case of an
unfortunate event
General Exclusions
Cases, where general insurance cannot be
claimed, are:
- For
general wear and tear of the insured object
- Loss
or damage to the insured object as a consequence of war or war-like
situation
- Damage
due to involvement in life-threatening activities
- Loss
or damage to a house that is acquired illegally or a building aged more
than 30 years
- Manufacturing
defects
List of General
Insurance Companies in India
Below is the list of all the companies
providing general insurance policies in India:
|
General Insurance Companies in India |
|
|
New India Assurance |
Raheja QBE General
Insurance Company Ltd- Raheja QBE |
|
Reliance General
Insurance |
Star Health and Allied
Insurance |
|
SBI General Insurance
Company Ltd. |
Royal Sundaram General
Insurance Co. Limited |
|
Oriental Insurance
Company |
Religare Health
Insurance |
|
Tata AIG General
Insurance |
ECGC (Export Credit
Guarantee Corporation of India) |
|
United India Insurance |
Manipal Cigna Health
Insurance Co. Ltd. |
|
Shriram General
Insurance Company Ltd |
Future Generali India Insurance Company Ltd |
|
Universal Sompo
General Insurance |
Cholamandalam MS
General Insurance |
|
TATA AIG General
Insurance |
IFFCO Tokio General
Insurance Company Limited |
|
Apollo Munich
Insurance |
Bharti AXA General
Insurance |
|
HDFC ERGO General
Insurance |
Agriculture Insurance
Company of India |
|
Max Bupa General
Insurance |
Bajaj Allianz General
Income |
|
National Insurance
Company Limited |
Liberty General
Insurance |
Importance of General
Insurance
While a life insurance policy takes care of
your family and loved ones when you’re not around, general insurance helps
in leading a life which is risk-free. Below are few points elaborating the
importance of general insurance:
To
avoid car damage expenses
If you have insured your car, you do not need
to worry about the costs of the damage occurred. You can claim your insurance
amount to pay for your loss.
To
cover hospital bills
General insurance can cover your
hospital bills if you have bought health insurance. You can also avail of
additional health insurance policies if the insurance money is
insufficient.
To
secure property
With the full range of choices from various
types of insurance, you can select the one or many to safeguard your family as
well as your assets. The general insurance financially protects your
property from any damage.
To
secure business
The general insurance plans include a policy
to protect the property and anything related to your business. This can save
you from facing massive financial loss due to natural calamity.
