General Insurance

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What is General Insurance?

Insuring anything other than human life is called general insurance. Examples are insuring property like house and belongings against fire and theft or vehicles against accidental damage or theft. Injury due to accident or hospitalization for illness and surgery can also be insured. Your liabilities to others arising out of the law can also be insured and is compulsory in some cases like motor third party insurance.

Types of General Insurance

 The various types of general insurance are

Health Insurance

Helps in meeting the expenses of hospitalization of self or any other member of the family.

Types Of Health Insurance

• Individual Plans: Health cover purchased for self or family.

• Family Floater Health Plans: Plan covers entire family in one health insurance plan. Covers hospital expense which can be pre and post.

• Pre existing disease covers: Plans offers cover against pre-existing disease e.g. diabetes, kidney failure and many more. After Waiting period of 2 to 4 years it gives all covers to insured.

• Maternity health insurance: Ensures coverage for maternity and other additional expenses. It takes care of both pre and post natal care, baby delivery ( either normal or caesarean). • Senior Citizen Health Insurance: Provides covers and for people between 65 years and 80 years.

• Personal Accident covers: Covers death/disability due to accident • Critical Illness covers: Insurer Provides compensation to policy holder if he/she is diagnosed with any of a specific illness out of a predetermined list of illnesses like cancer, stroke, organ transplant, blindness, deafness etc.

• Group Insurance Plans: Covers a defined group of people like employees of an organization.

Individual Health Plans

• Individual health plan has to bought in the name of each individual.

• Premium will be as per each individual’s age and sum insured.

• Insurers generally give a 10% discount on the total premium if more than one individual of the same family is insured simultaneously.

• In Individual cover, If a claim is made by one member, the sum           insured of other members remains intact.

Family Floater Health Plans

In a family floater health plan, a single premium is to be paid to cover  many family members.

• The premium is basis the eldest member in the policy.

• Entire sum insured can be availed by any or all the members .

• A family floater plan would be cheaper than buying individual policies  for each member of the family.

• In case of a family history or if one member has an adverse health  condition, then it is suggested to buy an individual health cover for that  member.

• Children beyond a specified age (varies between 18 to 25 depending on  the policy) will be treated as adults and have to be moved to a separate  plan but will be provided continuity on cover.

Exclusions in Health Insurance

 • Degenerative disc of vertebral diseases, varicose veins and ulcers, sinusitis, nasal polyps and fistula, etc.
• Expenses for investigation/treatment irrelevant to the disease.
• Resident doctor’s charges.
• Multiple visits by specialist doctors in a day.
• Illness as a result of substance abuse.
• Treatment at home – Certain insurers cover Domiciliary hospitalization,  which means medical treatment for a period of over three consecutive  days for a condition which would otherwise require hospitalization, but  is taken at home. In such cases, payable expenses are capped at 10% of  sum assured. It is however completely disallowed in case of some diseases like asthma or bronchitis.

• Non medical charges or hospital services/articles.

No Claim Benefit

 Insured can  claim No Claim Bonus as benefit for not availing the claim amount during the policy period. This bonus can be availed while renewing your health insurance policy.  Some insurance companies offer an increase in sum assured, in the form of a cumulative bonus, to replace this No Claim Bonus.
 
Tax Benefits of Health Insurance under Sec 80D
 
 
 Home Insurance
 
 Covers damage in case of fire,  lightning, explosion, theft and  other natural calamities.
• Max cover: Rs 5 cr
• Home insurance covers the structure and contents of your home
• Building Insurance:
– Based on built up area
– Superstructure, doors, windows, electrical and plumbing works
– does not include fixtures and fittings
• Tenure: 1-20 years
• Home insurance covers only the building cost and  not land costs.  Hence better to buy insurance on reinstatement basis. This is the value  of reconstructing the house and depreciation would not be deducted.
• Fire insurance covers the building and the contents against 12 perils,  including fire, lightning, riots, storm, flood, earthquakes
• Terrorism cover available at additional cost
 
Home Insurance
 
Motor Insurance consists of:
 
 
Car Insurance
 
Covers Offered
– Stand alone third party covers
– long term motor insurance package
– Combination of 3 year TP and 1 year OD
Mandatory to buy third party insurance
– It covers third person who has been injured in an accident involving    you and your car.
From 1st Sep 2019, new car owners need to compulsorily purchase 3 year third party insurance cover for new cars   
– Upfront only on 3rd party cover and not OD cover
– No impact on NCB as NCB is provided only on OD policy
BUY comprehensive insurance, which covers self + third party + add on covers.
– Covers – Loss or damage by accident, fire, lightning, riots, earthquake,    hurricane, terrorist attack, explosion, theft,   third party claim or    damages.
– Add on covers:
• Zero depreciation
• Engine Secure
• NCB protection
• Depreciation waiver cover
• Key protect
• Return to invoice cover
• Personal belongs cover
• The own damage cover of a car insurance policy will pay for any damage  to upholstery or built-in electronics of the car like the stereo system, but  if there are add-ons like the policyholder has installed a high-end stereo  instead of a built-in stereo, it will have to be declared and insured by  paying extra premium
• The value of the car depreciates each year and IDV is the sum insured  that’s calculated based on the invoice of your car minus depreciation
 
 
 Two Wheeler Insurance
 
• Mandatory to buy insurance. 
• Governed by the Indian Motor Tariff.
• From 1st Sep 2019, new two wheeler owners need to compulsorily  purchase 5 year third party insurance for new two wheelers
• Covers -protection against natural and man made calamities like: fire,  rockslide, landslide, storm, hurricane, flood, earthquake, burglary, theft,  riots or any damage caused to the vehicle in transit by road, air, inland  waterway or rail.
• Provides mandatory personal accident cover of Rs. 1 lakh to the insurer. 
  Accident cover can also be opted for passengers.
• Protects against legal liabilities arising due to third party’s injury/death  or damage caused to its property.
 
 
 Personal Accident Cover
• Personal accident cover is a compulsory component of a motor  insurance policy
• Available for both comprehensive cover and third party cover
• Personal accident cover covers not only death but also any disability
• Scale of compensation is as per nature of injury:
 
 
 • From Oct 25, 2019, the compulsory personal accident cover for owner  driven vehicles has been increased from Rs 2 lakhs to Rs 15 lakhs
 
 Zero Depreciation acCover
 
• 100% coverage  for all parts without deduction
• Does not cover engine damage due to water or oil leakage
• Mechanical  breakdown
• Oil change & consumable
– Limit on the number of claims in a year
– Costs between 15-20% extra
– Typically available for first 5 years
– Depreciation on Parts in standard policies
 
 
 No Claim Bonus
 
It is the insurer’s reward to the policyholder for not making a claim in the preceding years.
 
 
  • NCB is associated with the policy holder and not vehicle.  
  • Person-to-person transfer, is not possible, except to the legal heir in case  he/she inherits the car on the policyholder’s death. 
  •  No NCB for third party cover.
  • NCB reverts to zero even in case of a small claim
  •  Can purchase a NCB protection cover
  • Possible to use NCB even while purchasing a new car. the insurance for it  doesn’t have to be taken from the same insurer
 Travel Insurance
 • Covers medical emergency  or accident that might have  occurred  while traveling
• Baggage or passport loss
• Medical emergency or  accident
• Pricing of the insurance  depends on the number of  days of travel
• Visa status is relevant for  overseas travel insurance.

The articles are from various news publications & some of the articles may need a subscription.

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