Your Handbook to Understanding General Insurance
Insurance in this modern era is widely talked about the term. In fact, over the years, the awareness about insurance and the importance it in the present context has been on the rise. However, a wide majority of people are still not aware of the scope of general insurance.
To help you do away with any confusion and to broaden your outlook about insurance, here is a concise guide on general insurance: -
Insurances And What They Mean
Different individuals define insurance differently. While some believe insurance is some kind of guarantee against all odds, a few others take insurance as an investment. However, neither of these two is accurate as a perspective. Hence, before we get down to understanding general insurance for what it is and what it has to offer, let us first take a moment and understand what insurance actually means.
The term “insurance” denotes an instrument that offers the buyer financial coverage against losses pertaining to whatever it is bought for. So, it wouldn’t be wrong to refer to insurance as a practice for risk management for unexpected yet contingent potential risks.
A better definition of insurance would be as an agreement between an insurance company and the buyer (or insured) in which the insurance company promises to compensate a covered loss, in case it was to occur, in return for a premium paid by the insured.
It is not necessary that the aforementioned loss (which is borne by the insured)is always financial in nature. Often, losses related to health or property are translated into monetary terms and met with a pre-specified reimbursement when they occur.
Types of General Insurance
The world of insurance is expansive, and there are numerous types of general insurance plans that are out there for purchase. These insurances are all available for different needs, and anyone from an individual to an organization or other similar entity can choose to buy any of these policies.
For a newbie, terms such as car insurance or motor insurance can be a little complicating. Other than their literal meanings, you will hardly be able to tell if these terms refer to one thing in particular or are two different plans. This is where the basic understanding of the insurance plans is beneficial, as you will be able to better comprehend as to what you need.
Now, the general insurance policies that individuals purchase to protect various assets against financial loss. General insurances provide cover to individuals against unforeseen or unexpected incidents such as accidents and natural calamities. Health insurance, car or motor insurance, home insurance, and travel insurance all come under this category.
This insurance policy is designed for motor vehicles and covers them against financial liabilities caused on or off the road. These damages could be man-made and caused during riots, road rage, and malicious acts or could be caused during a natural disaster such as floods, hurricanes, and earthquakes. Both two-wheeler insurance plans, as well as car insurance policies, fall under motor insurance.
Now, both two-wheeler and car insurances online are of two types – third party liability insurance and comprehensive insurance. The third-party insurance policy covers losses related to third party claims arising out of accidents that cause damage to or loss of property and/or injury or death of the third party. A comprehensive plan, on the other hand, includes third-party coverage; own damage cover and personal accident cover as well.
As per the Motors Vehicles Act 1988, all motor vehicle owners should at least have a third party liability to legally drive their vehicles on Indian roads.
To help families and individuals meet the increasing costs of healthcare and avail quality medical aid, general insurance companies introduced health insurance policies. Under such a plan, policyholders shall receive coverage against expenses related to hospitalization, medical practitioner, nursing charges, ambulance facility, diagnostics, oxygen, etc.
Daycare expenses, pre and post hospitalization expenses, and domiciliary treatment is also often covered under health insurance plans. Generally, health insurance plans are of the following types – Individual health plans, Family floater policies, Critical insurance plans, and senior citizen health insurance. However, depending on the health insurance provider, there could be other types too.
While traveling, people are exposed to various contingencies, both financial and health-related. Loss of passport, baggage or even a delay in flight can create a hassle for travelers. So, to help mitigate such losses, there’s travel insurance. Here’s what is covered under a travel insurance plan:–
1. Hospitalization expenses and personal accident cover up to a specified amount.
2. Litigation expenses related to work.
3. Transportation fare if the insured were to lose their job, among many others. Travel insurance plans available in India include individual plans, family plans, student plans, and senior citizens' plans.
Residential properties are one of the biggest investments that an individual makes in their lifetime. So, to help ensure the security of the same, insurance companies offer home insurance plans covering your house and belongings.
A home insurance plan covers your house and contents against losses related to both manmade and natural causes. Loss of television, video equipment, personal computer, and damage or loss of garages, swimming pool, terrace, etc. is also covered under a home insurance plan.
Now that you have a basic idea of what general insurance plans are and what all they cover, remember that you can buy any plan be it a car insurance policy or health insurance plan online as well. But before you do that, it is important that you compare the plans online and go through its inclusions, exclusions and policy terms before you select and purchase.
**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**