insurance awareness study material

Insurance Awareness: Types of General Insurance – Chapter 3

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Topics Covered in Chapter 3

  • What is General Insurance
  • Types of General Insurance
    • Motor Insurance   
    • Health Insurance
    • Travel Insurance
    • Home Insurance
    • Commercial Insurance

What is General Insurance?

General insurance (also known as non-life insurance) provides insurance for valuables and products other than our life. It protects against damage, loss and theft of your valuable that is insured. Examples: Motor insurance, Home insurance, Crop insurance, etc.

Types of General Insurance

There are various types of general insurance and we will discuss here some major types to give an overview of each type. This will be helpful in understanding some concepts of insurance.

  • Motor Insurance   
  • Health Insurance
  • Travel Insurance
  • Home Insurance
  • Commercial Insurance

Motor Insurance

The Motor Vehicles Act, 1988 mandates that all vehicles running on the Indian roads should be insured. The motor insurance can be for cars, 2 wheelers vehicle or for Commercial vehicle. There are two types of motor insurance – Third Party Liability Cover and Comprehensive Motor Insurance Policy

Third Party Liability Cover (Mandatory as per law) – It provides insurance for damage done to another vehicle/ person by your vehicle i.e Damage to another person’s vehicle or property, bodily injuries and permanent disability during an accident by your vehicle. It does not provide insurance to your vehicle.

Comprehensive Motor Insurance Policy. (non-mandatory and optional)- It is optional coverage and provides overall protection to your car also along with third-party vehicle as in Third Party Liability Cover.

Health Insurance

It is a type of insurance in which the policyholder is covered for medical and surgical expenses. This is a vast type of insurance and can cover countless things like Room Rent Waiver, Maternity Cover, Critical Illness cover, Hospital Cash, etc

However, health insurance can be classified mainly into 4 types: comprehensive health insurance cover, family floater cover, surgery cover, and individual cover.

  • Comprehensive health insurance cover– It is a complete package that includes almost all the healthcare facility and healthcare needs and ensures complete peace of mind, regardless of the situation of life you are in.
  • Family Floater Cover – covers family members under a single plan. You need not buy a plan for individual members individually.
  • Surgery Cover – It provides a fixed amount for specified surgeries and to help you take care of the expensive medical treatment in a hospital.
  • Individual Cover– Such products provide insurance cover for individual members.

Travel Insurance

Why do you need travel insurance? Suppose you are on a travel trip and something goes wrong such as loss of baggage, trip delay and other incidental expenses. Travel Insurance is to provide cover against such events.

Major Protections in Travel Insurance:  Flight delay, Loss of baggage or passport, Medical emergencies during travel, Hospital cash allowance, Accidental death while in travel, Hijack distress allowance, Financial emergency assistance, etc.

Types of Travel Insurance: International Travel Insurance; Student Travel Insurance; Group Travel Insurance; Senior Citizen Travel Insurance; Domestic Travel Insurance; Corporate Travel Insurance

Home Insurance

It offers protection to the entire structure of your house and secures all the belongings of your house. It provides protection from Fire and Peril (Due to Fire, Explosion, Aircraft Damage, Lightning, Earthquake, Missile Testing Operations); Natural Calamities( Flood, Hurricane, Storm, Landslide and Rockslide, Cyclone, etc.); Man Made Calamities( Riot, Strike, Theft or Burglary)

Commercial Insurance

These are insurance plans to cover the risk of business related requirements. There are risk covers for all sectors of the industry ranging from automotive, aviation, construction, chemicals, foods and beverages, manufacturing, oil and gas, pharmaceuticals, power, technology, telecom, textiles, transport, and logistics.

Types of Commercial Insurance:

  • Marine insurance- covers the ships and the cargo inside it against damage or loss.
  • Liability insurance- to protect the purchaser (insured) from the risks of liabilities imposed by lawsuits and similar claims.
  • Energy insurance- Insurance for Refineries, Petrochemicals and chemical plants, Gasworks, Terminals and tank farms, Underground storage and Chemical fertilizer plants-
  • Financial lines insurance- insurance products covering financial loss and costs thereof.
  • Engineering insurance- insurance that provides an economic safeguard to the risks faced by the ongoing construction project, installation project, and machines and equipment in project operation.

Note: The content of this chapter will be useful in understanding the various terms related to insurance that would be discussed in the next chapter.


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