Why is it important to have a General Insurance?
The word ‘general’ is often used a replacement for the phrase ‘nothing specific’. However, it actually is a term that can be used to express the act of including everything into one. Life is journey through time dealing with risks and rewards. Since there are multiple parts to an individual’s life, there are naturally numerous risks attached to each of them. The basic instinct that anyone would have is to avoid any risk related to any part of life. Taking inspiration from this idea, a lot of insurance providers offer what is called a general insurance policy.
If you are someone that does not find taking risks to be a part of enjoying the thrills of life, a general insurance policy is your best friend. It allows you to deal with the risk associated with different parts of life. This can include your home, health, business, or even travelling among so many others.
Understanding general insurance
As per its definition in the insurance sector, anything apart from life coverage comes under general insurance. To be precise, there are two types of insurance policies. The first is a life insurance policy. It covers your family in the case of your death. The other is general insurance, which is an umbrella term used to describe any other type of insurance. For example, insurance for your home against fire or burglary would come under the term of general insurance.
In general insurance, you will have a fixed payout in the event of a claim. This payout is called the sum assured. Depending on the type of general insurance you are buying, the policy would cover expenses for treatments/repairs or would cover the cost of replacing the asset covered under the policy. However, you should know that different types of general insurance have different sets of rules. The premium that you would have to pay for a general insurance policy depends on the type of policy you buy and the sum assured mentioned in it.
Some types of general insurance policies are mandatory to purchase because they may cover liabilities towards another individual. However, even for the ones that are optional, it is recommended that if you have a valuable asset, you should have insurance for it. The biggest reason for that is that your assets or belongings are hard-earned. Such earnings should be protected from various risks of life.
Types of general insurance
Anything other than life insurance is classified as general insurance. However, there are too many insurance products available in the market, each with its own specific purpose, to be listed. Hence, they are classified into 4 major categories. They include:
- Motor insurance
Motor insurance provides coverage to vehicles that are used by individuals or entities. These vehicles can include cars, bikes, trucks, special equipment, etc. It covers third-party liabilities and damages to your own vehicle. Depending on the type of vehicle you insure, your premium and coverage can differ. Due to the liability coverage offered, this type of insurance is mandatory if you own a vehicle. Coverage includes third-party liability and physical damages from accidents, theft, fire, burglary, riots, earthquakes, etc.
- Health insurance
While it is not mandatory, health insurance is absolutely necessary in today’s time. In the case that you get accidental injuries or develop an illness, health insurance can protect you from towering medical bills. It does so by covering these medical costs in exchange for a premium.
- Travel insurance
Mainly used at the time of travelling, Travel insurance is a policy that covers medical costs in case you fall ill while travelling to a different region. Moreover, the policy offers additional benefits like offering smaller payments in instances of flight delay or cancellation, personal liability claims, etc.
- Property insurance
This type of general insurance is simple. It offers coverage to property against various risks like fires, burglary, floods, earthquakes, etc.
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