General insurance covers home, your travel, vehicle and health (lifeless assets) from fire, flood, accident, man-made disaster and theft. Different types of general insurance include motor insurance, health insurance, travel insurance and home insurance. A general insurance policy pays for the loss incurred by the insurer during the term of the policy.
Different types of general insurance
It is important to know about the different types of general insurance today because of the myriad benefits that they offer. Read more about them:
- Home insurance
Since the home is a valuable asset, it is important to secure your home with the right home insurance policy. Home and household insurance protects your home and its contents. A home insurance policy covers mainly man-made and natural conditions that may result in loss or damage.
- Motor insurance
Motor insurance provides coverage against damage to your vehicle, accident, vandalism, theft, etc. It is of two types, third party and comprehensive.
When your vehicle is responsible for an accident, third party insurance takes care of third party losses. However, you must keep in mind the fact that it does not cover any damage to your vehicle. It is also important to note that third party motor insurance is mandatory under the Motor Vehicles Act, 1988.
A comprehensive insurance policy protects your car from fire, earthquake, theft, impact damage, etc. In addition, it provides coverage against third party liability in the event of damage to third party property, bodily injury or death.
- Travel insurance
When you travel internationally and are affected by lost baggage, trip cancellations, or flight delays, a travel insurance policy protects you. If you are hospitalized while traveling, you may be offered cashless hospitalization.
- Health insurance
Health insurance is an important tool for mitigating risks and helps you deal with medical emergencies. A health insurance plan covers the cost of hospitalization up to the sum insured. When it comes to health insurance, one can choose a separate health policy or family floating plan that provides coverage for all family members.
The difference between general insurance and life insurance
Life insurance provides coverage for your life. If a situation arises where the policyholder dies prematurely during the term of the policy, the nominee receives insurance from the insurance company. It is one of the most important financial instruments. Life insurance differs from general insurance in various parameters:
A general insurance policy is a short term contract where life insurance is a long term contract.
In the case of life insurance, benefits and sum assured are paid in the event of maturity of the policy or death of the policyholder. On the other hand, in the case of general insurance, the amount of the claim or actual loss is refunded if a certain event occurs.
Since the life insurance contract is of long term nature, the premium is paid up to the term of the policy or up to the term of payment of minimum premium. As far as general insurance premiums are concerned, premiums are paid when the policy is renewed in the following year.
Compulsory general insurance should be a user
Health insurance is an essential cover, given the rising healthcare charges, while travel and home insurance can help save you from a lot of grief. However, they are not mandatory. General insurance cover is mandatory third-party liability car insurance. This is a minimum coverage that a vehicle should have before moving.
Each type of general insurance cover comes with a goal, to provide coverage for a specific direction. So, if you still don’t get general insurance covers, make sure you acknowledge your needs and buy your needs as soon as possible.