What is General Insurance? Meaning, Features, Benefits, and Types of General Insurance

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Updated on Jan 30, 2024

Life is unpredictable, but one thing you can predict is the insurance for any loss you incur due to an accident or mishappening. It can be done by insurance. In India, we have broadly two types of insurance – life insurance and general insurance. Life insurance aims to secure the financial needs of the policyholder’s family in case of an untimely death, whereas general insurance safeguards the economic value of assets purchased.

Let us acquaint you in detail about what is General Insurance and what are its definition, types, features, and benefits through this article. So, read on!

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What is General Insurance

A General Insurance is a way to secure the losses incurred on a home, car, or any other valuable possession during a traveling mishappening, theft, or any other risk. These plans offer the policyholder to cover the threats as per preference. Unlike a life insurance company, a general insurance company offers insurance on other things other than life.

Types of General Insurance

Although there are several general insurance policies to choose from, we will now discuss the main four types of general insurance plans bought by people in India. So, have a look:

Type of General Insurance Main Coverage
Home Insurance Coverage against man-made disasters or natural calamities that damage the home of the policyholder
Motor Insurance Coverage against damages to a vehicle due to accidents and natural calamities
Health Insurance Coverage against healthcare expenses of the policyholder and his or her family
Travel Insurance Coverage for any loss of bags, medical problems, delays in flights, and any other bad experience during a trip

Features of General Insurance 

Let us have a look at the main features of the popular plans:

1. Home Insurance Features

  • Coverage against theft of home appliances, furniture, and other valuables
  • Coverage against damage caused to the house structure, air conditioning, heating, and wiring
  • Coverage against damages caused to the pool, yard, driveway, and garage

2. Motor Insurance Features

  • Coverage against damages caused to the vehicle due to natural calamities like earthquakes, floods, and cyclones
  • Coverage against damage caused to the vehicle due to theft, riot, or protest
  • Compensation for vehicle repairs done at a network garage of the insurance company
  • 24×7 help on the redressal helpline through the insurance provider

3. Health Insurance Features

  • Wide range of healthcare plans like critical illness, family floater, individual health plans, and plans for pre-existing medical issues
  • Coverage against pre-, post-hospitalization, surgeon fee, and other healthcare expenses of the policyholder
  • Tax benefits on premiums paid under Income Tax Act Section 80D
  • Cash hospitalization facility in a network hospital of the insurance provider

4. Travel Insurance Features

  • Compensation for loss of passport, baggage, delay in flights, and credit card during a trip
  • Coverage against any unforeseen additional expenses during a trip, accommodation, or medical emergency
  • Coverage against permanent disability, or accidental death during a trip

Benefits of General Insurance

Now that you have read about what is general insurance and what are its types, it is time to learn about the importance of general insurance. Buying a general insurance policy is beneficial for the following prime reasons:

  • Offers a financial cover against emergencies, hospitalizations, thefts, accidents, and eventualities
  • Helps adhere to mandatory insurance by the government, like the Motor Insurance Act, of 1988 which makes it mandatory for vehicle owners to get a motor insurance policy
  • Offers compensation in case of losses during contingencies
  • Provides tax benefits on premiums paid on particular general insurance plans like health insurance

Other Common Types of General Insurance Plans

We talked about four main types of General Insurance plans, but there are some other types too like:

  • Group Insurance Plan
  • Cyber Risk Insurance
  • Mobile Insurance
  • Rural Insurance
  • Marine Insurance
  • Directors and Officers Insurance
  • Professional Indemnity Insurance
  • Commercial General Liability Insurance

Documents Required to Purchase a General Insurance Policy

Make sure to arrange for the following documents before purchasing a general insurance policy:

  1. Proof of identity
  2. Proof of address
  3. Proof of age
  4. Recent photograph
  5. Policy proposal form
  6. Other relevant documents based on the type of policy you want to purchase

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How to Buy the Best General Insurance Plan in 2024

Consider checking the following parameters while buying the best general insurance policy in 2024:

  • Insurance company reputation
  • Claim settlement ratio
  • Premium amount and mode of payment
  • Claim processing procedure and time
  • Effective customer care support
  • Tax benefits

Popular General Insurance Companies India, 2024

Conclusion

There are different types of general insurance policies, and all aim to offer coverage against financial risks. Choose a general insurance plan that meets your needs after thorough research about its features, benefits, and other details. Do not forget to compare different plans before buying one that offers extensive coverage with minimum premium payment.

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FAQs: What is General Insurance?

Which are the top 5 General Insurance Companies in India?

Based on the features, premium, benefits, and claim settlement ratio, the following 5 general insurance companies have emerged as the best ones:
~ Bajaj Allianz General Insurance
~ Future Generali India Insurance
~ HDFC ERGO General Insurance
~ ICICI Lombard General Insurance
~ IFFCO Tokio General Insurance

What are the functions of General Insurance?

The prime function of a general insurance policy is to get financial protection against any major or minor risk due to a certain or uncertain incident to valuables.

What are the things to consider before buying a General Insurance plan?

A potential general insurance buyer must consider the following things:
~ Claim process
~ A perfect combination of benefits and premium payments
~ Digital platforms to pay the premiums
~ Network hospitals/ garages (for health and motor insurance, respectively)
~ Easy renewals
~ Tax benefits

What risk is covered by General Insurance companies in India?

All general insurance companies in India cover the risk associated with motor, home, health, and travel from man-made or natural disasters like fire, theft, earthquake, flood, cyclone, and accident.

When is the right time to buy a general insurance plan?

The right time to purchase a health insurance plan is in the early 20s because the premium amount will be less at that young age. One must buy motor insurance when purchasing a new vehicle to meet the mandatory norms under the Motor Act.

Which company is the best in General Insurance?

Based on the features, premiums, benefits, and easy claim process, we found three best general insurance companies in India:
~ Bharti AXA General Insurance
~ Cholamandalam MS General Insurance
~ IFFCO TOKIO General Insurance

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May 25, 2023
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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