4 Different Types of General Insurance in India
General insurance covers home, your travel, vehicle, and health (non-life assets) from fire, floods, accidents, man-made disasters, and theft. Different types of general insurance include motor insurance, health insurance, travel insurance, and home insurance. A general insurance policy pays for the losses that are incurred by the insured during the period of the policy.
Different Types of General Insurance
Today it is crucial to know about the different types of general insurance because of the numerous benefits they offer. Read on to know more about them:
1. Home Insurance
As the home is a valuable possession, it is important to secure your home with a proper home insurance policy. Home and household insurance safeguard your house and the items in it. A home insurance policy essentially covers man-made and natural circumstances that may result in damage or loss.
2. Motor Insurance
Motor insurance provides coverage for your vehicle against damage, accidents, vandalism, theft, etc. It comes in two forms, third-party and comprehensive.
When your vehicle is responsible for an accident, third-party insurance takes care of the harm caused to a third-party. However, you must take into account one fact that it does not cover any of your vehicle’s damages. It is also important to note that third-party motor insurance is mandatory as per the Motor Vehicles Act, 1988.
A comprehensive insurance policy safeguards your vehicle against fire, earthquake, theft, impact damage, etc. Additionally, it provides coverage against any third-party liability in the case of third-party property damage, bodily injury, or death.
3. Travel Insurance
When you are travel internationally and suffer losses because of loss of baggage, trip cancellation, or delay in flight, a travel insurance policy safeguards you. You may also be offered cashless hospitalization if you are hospitalized while travelling.
4. Health Insurance
Health insurance is a vital tool for risk mitigation and helps you deal with medical emergencies. A health insurance plan covers hospitalization expenses up to the sum insured. When it comes to health insurance, one can opt for a standalone health policy or a family floater plan that offers coverage for all family members.
Difference between General Insurance & Life Insurance
Life insurance provides coverage for your life. If a situation occurs wherein the policyholder has a premature death within the term of the policy, then the nominee gets the sum assured by the insurance company. It is one of the most important financial instruments. Life insurance is different from general insurance on various parameters:
- General insurance policy is a short-term contract whereas life insurance is a long-term contract.
- In the case of life insurance, the benefits and the sum assured is paid on the maturity of the policy or in the event of the policy holder’s death. On the other hand, in the case of general insurance, the claim or the actual loss amount is reimbursed when a specific event occurs.
- Because the contract of life insurance is long-term in nature, the premium is paid all through the term of the policy or until the minimum premium paying term. As far as the premium of general insurance is concerned, the premium is paid if the policy is renewed in the next year.
Mandatory General Insurance a User Should Have
Health insurance is a must-have cover, given the ever-increasing healthcare charges, while travel and home insurance can help save you from a lot of grief. They are however not mandatory to have. The general insurance cover that is mandatory is third-party liability car insurance. This is the minimum coverage that a vehicle should have before they can ply on Indian roads.
Each and every type of general insurance cover comes with an aim, to offer coverage for a particular aspect. So, if you have not yet availed general insurance covers, then make sure you recognise your needs and buy the ones you require as soon as possible.