GENERAL INSURANCE

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 What is general insurance?

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Insuring anything other than human life is called general insurance. General insurance comprises insurance of property against fire or burglary, personal insurance such as accident and health insurance, and liability insurance that covers legal liabilities. There are also other covers such as errors and omissions insurance for professionals, credit insurance, and so on.

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One of the main reasons why one should go for insurance is to protect ones belongings and assets against financial loss. When one has earned and accumulated property, protecting it is prudent. The law also requires us to be insured against some liabilities. That is, in case we cause losses to another person, that person is entitled to compensation. To ensure that we can afford to pay that compensation, the law requires us to buy liability insurance, so that the responsibility of paying the compensation is transferred to an insurance company.

Who should buy general insurance?

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Anyone who owns an asset can buy insurance to protect against losses due to fire or theft, and so on. Each one of us can insure our and our dependents health and well-being through hospitalisation and personal accident policies. To buy a policy, the person should be the one who will bear financial losses if the said events occur. This is called insurable interest.

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The amount you insure for is called the sum assured. Normally, a policy should cover the value of the asset either the market value while insuring, or the cost of replacing the asset should it be lost or destroyed. The premium will depend on the sum assured. You can avail of a range of products to suit your insurance needs.

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We have classified general insurance under four categories:

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Motor insurance: This involves protection for car and two-wheelers against third-party liability and physical damages from fire, theft, explosion, burglary, riots, strikes, earthquakes, flood, cyclones, accidents and malicious acts.Having an insurance for the vehicle will bring you confidence and peace of mind on the road, apart from meeting a legal requirement.

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Health insurance: Health insurance gives protection from costly medical bills in case of any emergency. They offer a range of health plans to cover you and your family against expensive medical care. It is very important to have a personal health insurance.One of the reasons is that in case of a job transition, one is without any health insurance and medical expenses during this period will have to borne personally.

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Travel insurance: Travel insurance is mainly useful for international travel. The policy covers the cost of medical treatment abroad, if required, due to any emergency. Most insurers provide a network of hospitals across the world where the insured persons can avail cashless treatment. The policy also provides ancillary benefits, such as small payments in case of flight delay or cancellation, loss of passport and personal liability claims. It also provides a sum of money to the nominee of the traveller in case of death during travel.

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Property insurance: It covers property against fire and allied perils, such as flood storm and inundation, earthquake, and so on. There are products that cover property against burglary, theft, etc.

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Non-life insurance companies also offer policies covering machinery against breakdown; there are policies that cover the hull of ships, and so on. A Marine Cargo policy covers goods in transit, including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life insurance business.

Thus, general insurance in India can be put on a must-have list for most individuals, business entities and entrepreneurs alike. It is a handy tool that goes a long way in bringing certainty and peace of mind in life.

General insurance is a practical option for anyone who likes to lead a risk-free life. Risk is associated with practically everything and, so, it is important to secure all the things that we own and value.

Our valuable possessions in life, such as home, business, and vehicle, are exposed to various hazards. Also, emergency medical expenses can put one under serious financial stress. Even an otherwise mundane act like traveling too involves risks, such as accident, loss of baggage and passport, and medical expenses.

So, have you given any thought to securing the family's health, or insuring your vehicle or home against any future uncertainty If not, then it is time to focus on it now.