All Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance includes of insurance of property against fire, burglary etc, personal insurance like Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other kinds of covers such as Errors and Omissions insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover property against Fire and related hazards, flood storm and inundation, earthquake and so on. There are products that cover property against robbery, burglary 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 portion of non-life insurance business.
In respect of insurance of property, it is significant that the cover is taken for the actual value of the property to avoid being imposed a penalty. Where a property is undervalued for the purposes of insurance, the insured will have to bear a assessable proportion of the loss. For instance if the value of a property is Rs.1000 and it is insured for Rs.500/-, in the event of a loss to the extent of say Rs.500/-, the maximum claim amount payable would be Rs.250/- (50% of the loss being borne by the insured for underinsuring the property by 50%). This concept is quite often not understood by many insured.
Personal Insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are known as benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on a reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have arrangements with various service providers, that is, hospitals. The Third Party Administrators also offer 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 might be a group of employees in an organization or holders of credit cards or deposit holders in a bank etc. Generally 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 occur 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 attractiveness these days. Many industries insure against Public liability. There are liability covers available for Products and so on.
There are general insurance products that are in the nature of package policies offering a mixture of the covers mentioned above. For example, there are package policies available for householders, shop keepers and also for professionals such as doctors, lawyers, chartered accountants etc. Apart from offering standard covers, insurers also offer customized and tailor-made ones.
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