General Insurance

General Insurance

Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.

Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life 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.

In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the insured will have to bear a rateable proportion of the loss. For instance if the value of a property is Rs.100 and it is insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be Rs.25/- ( 50% of the loss being borne by the insured for underinsuring the property by 50% ). This concept is quite often not understood by most insureds.

Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for reimbursement claims. Sometimes the insurers themselves process reimbursement claims.

Accident and health insurance policies are available for individuals as well as groups. A group could be a group of employees of an organization or holders of credit cards or deposit holders in a bank etc. Normally when a group is covered, insurers offer group discounts.

Liability insurance covers such as Motor Third Party Liability Insurance, Workmen’s Compensation Policy etc offer cover against legal liabilities that may arise under the respective statutes— Motor Vehicles Act, The Workmen’s Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmen’s Compensation policy )  are compulsory by statute. Liability Insurance not compulsory by statute is also gaining popularity these days. Many industries insure against Public liability. There are liability covers available for Products as well.

There are general insurance products that are in the nature of package policies offering a combination of the covers mentioned above. For instance, there are package policies available for householders, shop keepers and also for professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-made ones.

Suitable general Insurance covers are necessary for every family. It is important to protect one’s property, which one might have acquired from one’s hard earned income. A loss or damage to one’s property can leave one shattered. Losses created by catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless and penniless. Such losses can be devastating but insurance could help mitigate them. Property can be covered, so also the people against Personal Accident. A Health Insurance policy can provide financial relief to a person undergoing medical treatment whether due to a disease or an injury.

Industries also need to protect themselves by obtaining insurance covers to protect their building, machinery, stocks etc. They need to cover their liabilities as well. Financiers insist on insurance. So, most industries or businesses that are financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they insuring adequately are questions that need to be given some thought. Also organizations or industries that are self-financed should ensure that they are protected by insurance.

Most general insurance covers are annual contracts. However, there are few products that are long-term.

It is important for proposers to read and understand the terms and conditions of a policy before they enter into an insurance contract. The proposal form needs to be filled in completely and correctly by a proposer to ensure that the cover is adequate and the right one.

Types of General Insurance

Let’s take look at each type of insurance in detail:

Home Insurance

Home Insurance covers the losses due to natural calamities. The following covers are available under the policy:

  1. Fire
  2. Lightening
  3. Impact damage
  4. Explosion & implosion
  5. Aircraft damage
  6. Storm, Tempest, Flood & inundation
  7. Riot, Strike, Malicious Damage
  8. Missile Testing
  9. Subsidence & Landslide / Rockslide
  10. Bush fire
  11. Leakage from automatic sprinkler installations
  12. Bursting and/or overflowing of water tanks
  13. Earthquake damage
  14. Architects and surveyors fees up to 3% of claim amount
  15. Debris removal up to 1% of claim amount
  16. Terrorism (Optional)
  17. Burglary
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Machinery Insurance

This type of insurance covers expensive machinery & equipments The following covers are available under the policy.

  1. Fire
  2. Lightening
  3. Impact damage
  4. Explosion & implosion
  5. Aircraft damage
  6. Storm, Tempest, Flood & inundation
  7. Riot, Strike, Malicious Damage
  8. Missile Testing
  9. Subsidence & Landslide / Rockslide
  10. Bush fire
  11. Leakage from automatic sprinkler installations
  12. Bursting and/or overflowing of water tanks
  13. Earthquake damage
  14. Architects and surveyors fees up to 3% of claim amount
  15. Debris removal up to 1% of claim amount
  16. Terrorism (Optional)
  17. Burglary
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Marine Insurance

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination.
Cargo insurance is a sub-branch of marine insurance, though Marine also includes Onshore and Offshore exposed property (container terminals, ports, oil platforms, pipelines); Hull; Marine Casualty; and Marine Liability.

Cargo insurance is an insurance policy taken up to protect against loss of or damage to your goods while they are being transported.

Hull Insurance is boat insurance that covers damage to a boat, its machinery and its equipment. According to United Marine Underwriters, it is the closest maritime equivalent to comprehensive and collision automobile insurance. Like other products in the insurance market, coverage and deductibles vary by company, so read and compare insurance contracts before you buy. Hull insurance is a term sometimes used for aircraft.

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Vehicle Insurance

Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles.

Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region.

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Health Insurance

Health insurance is insurance against the risk of incurring medical expenses among individuals. Health Insurance covers generally your hospitalization expenses. Certain Insurance Companies also provide for OPD expenses also.

The policies can be obtained for individual, family and for a group of persons. The family means self, spouse and children. Generally only two children are allowed in the family. But certain companies provide for three children also. The group means employees working in an organization.

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Personal Accident Insurance

Accidents are the fact of life. The probability of you encountering an accident in India or abroad is very high, as is disability resulting out of it. An ordinary life insurance cover falls short of covering all the liabilities. Thus a cost-effective Personal Accident Insurance is advisable that provides a comprehensive cover for all your liabilities.

Personal Accident Insurance is the ideal supplement to your life insurance policy. Accident insurance policies are not a substitute to your life insurance policy; nevertheless they provide critical support in the event of accidental death or permanent total disablement due to an accident. Personal Accident insurance is a relatively inexpensive option to secure your family.

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Travel Insurance

Travel insurance is short-term insurance available specifically against travel-related emergencies and expenses. International travelers will almost always want to obtain travel insurance because it covers medical expenses, but even other travelers may find it useful depending on their plans.

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Housing Societies Building Insurance

The following covers are available under the policy.

  1. Fire
  2. Lightening
  3. Impact damage
  4. Explosion & implosion
  5. Aircraft damage
  6. Storm, Tempest, Flood & inundation
  7. Riot, Strike, Malicious Damage
  8. Missile Testing
  9. Subsidence & Landslide / Rockslide
  10. Bush fire
  11. Leakage from automatic sprinkler installations
  12. Bursting and/or overflowing of water tanks
  13. Earthquake damage
  14. Architects and surveyors fees up to 3% of claim amount
  15. Debris removal up to 1% of claim amount
  16. Terrorism (Optional)
  17. Burglary
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D & O (Managing Committee Liability) Insurance

  1. Inaccurate statement of financial conditions
  2. Errors in annual account
  3. Conflict of interest
  4. Mismanagement of funds
  5. Unfair allotment of shares

Third Party Liability Insurance

It covers Accidental Death, Bodily injury, Loss or damage to property, Legal costs and expenses incurred
With the prior consent of the insured and within the limit of indemnity.

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Workmen’s Compensation Insurance

Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment While plans differ between jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance).

General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in workers’ compensation plans, and negligence is generally not an issue in the case.

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Group Accidental Insurance

Accidents are the fact of life. The probability of you encountering an accident in India or abroad is very high, as is disability resulting out of it. An ordinary life insurance cover falls short of covering all the liabilities. Thus a cost-effective Personal Accident Insurance is advisable that provides a comprehensive cover for all your liabilities.

Personal Accident Insurance is the ideal supplement to your life insurance policy. Accident insurance policies are not a substitute to your life insurance policy; nevertheless they provide critical support in the event of accidental death or permanent total disablement due to an accident. Personal Accident insurance is a relatively inexpensive option to secure your family

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