What is general insurance?
General insurance is an agreement between the insurer and an individual that offers financial compensation on any loss other than death. It insures and compensates for losses or damages to your valuables that you want safeguarded. A general insurance plan compensates for financial loss due to liabilities related to house, car, bike or travel. The premiums of general insurance depend on the type of general insurance as well as tenure of the policy.
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What is General Insurance?
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Types of General Insurance in India:
There are various insurances that are listed under the category of general insurance. They are:
- Motor insurance: motor insurance compensates for the loss or damage to your motor vehicle. The insurance includes two-wheeler, three-wheeler and four-wheeler vehicles. The damage caused to the vehicle can be due to natural calamities or due to accidents or manmade circumstances.
- Health insurance: Health Insurance is a type of insurance that covers the insured's medical and surgical expenses. Depending on the policy terms and conditions, the insurer either reimburses the amount or offers a cashless facility at the listed network hospitals (Insurers have tie-ups with hospitals called network hospital). Certain benefits offered under Health Insurance Plans are:
- Pre and Post Hospitalization Benefit
- Cashless Treatment
- Day Care Treatment
- Travel insurance: this is a general insurance policy that covers trips abroad and domestically. Travel insurance covers all types of losses and damages related to travelling. Most travel insurance plans are package plans that include coverage like trip cancellation, trip interruption, trip delay, lost or delayed baggage, medical coverage, and medical evacuation.
- Home insurance: home insurance is a form of property insurance that covers loss or damage to individual’s house and the assets contained in the home. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents or loss of personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the house.
- Marine insurance: this type of insurance provides compensation for the loss or damage to cargo, ships and other transport or cargo through which any property is acquired, transferred or is held between two points that can be the origin and the destination point. This insurance is also known as cargo insurance. Marine insurance is very important because through marine insurance, ship owners and transporters can be sure of claiming damages especially considering the mode of transportation.
- Rural insurance: rural insurance helps to fulfil the requirements of the rural and agricultural sector. Rural insurance ensures working capital as well as assistance is offered to the rural families. The Indian law states that insurance companies should be accommodative of persons in the rural sector or social sector, persons in the economically vulnerable or backward classes of the society, workers in the unorganized or informal sector.
- Commercial insurance: A standard insurance policy issued to business organizations to protect them against liability claims for bodily injury and property damage arising out of premises, operations, products, and completed operations; and advertising and personal injury liability.
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Other types of general insurance:
There are other insurances that are grouped under general insurance. They are as follows:
- Property insurance
- Householder insurance
- Shopkeeper insurance
- Corporate insurance
- Commercial insurance
- Fire insurance
- Crop insurance
Claim Process of General Insurance:
An insurance claim is a formal request to an insurance company for compensation for a covered loss or policy event. The general insurance claim process involves five stages. The first step is to report your loss to the insurance company. Below given are the steps to register a claim on your loss:
- Inform the insurance company or agent: inform the insurance company on your loss, raise a request with the insurance company and file for claim through agent. Give a detailed list of relevant documents, list of items damaged and attach with photographs to continue the claim process.
- Claim investigation begins: after the claim has been reported, it will need an investigation by concerned authorities. For example in cases of home insurance, if a person claims for the insurance citing damage due to fire or theft, then the case needs to be reported to the police. A copy of the FIR needs to be submitted to make the claim.
- Review of the policy: once the investigation is complete, the company will access the claim and go through the policy properly and will inform you on the deductibles.
- Damage evaluation: the insurance company will evaluate the loss or the damages against which insurance is claimed. Once the evaluation is complete, the insurer will prepare for the payment process.
- Company approves the claim: the company approves the claim after proper investigation and carefully accessing the policy. The company contacts regarding settlement of claim and payment. The amount of time it takes to receive payment will depend on the complexity and severity of your situation.
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Tax Benefit via General Insurance:
Of all the insurance policies listed under general insurance, only health insurance comes with tax benefits. An individual paying a premium for health insurance qualifies for tax benefits under section 80D of the income tax act 1961. The upper limit for tax deduction is Rs 25,000 a year and Rs 50,000 for senior citizen. So, if a person pays premiums for both himself and parents, a maximum of Rs 75,000 a year is available as a deduction.
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