What is General Insurance? Types, Features & Coverage Explained

General insurance is an agreement where the insurance company protects your valuable things like your house, car, or business from fire, theft, accidents, or other losses. You pay a small amount regularly, and the insurer helps cover the cost if something goes wrong.

For example, Ramesh owns a small grocery shop in Pune. He bought general insurance to protect it from fire and theft. One night, a short circuit caused a fire that damaged the shop. Thanks to his insurance, he got money to repair it and restart his business quickly.

Ramesh’s Insurance Details
 

Ramesh felt safe knowing his hard work was protected by general insurance.

Why Do We Need General Insurance?

General insurance protects you from sudden money losses. It covers things like accidents, health problems, or loss of belongings. Below is a simple table showing real-life examples with amounts in rupees, so you can see how helpful insurance can be.

Need for General Insurance 

Types of General Insurance in India

General Insurance policies provide financial protection in various areas of life. Let’s look at four main types, their features, and when one might need them. The examples and figures below will help you understand them better.

1. Health Insurance

Health Insurance protects you from unexpected and high medical expenses. With increasing hospital costs and a sedentary lifestyle, a health policy is essential.

For example, Ravi had to undergo an appendix surgery. The hospital charged ₹65,000. His Mediclaim policy from ICICI covered:

• ₹55,000 for hospitalisation
   
• ₹5,000 for tests and diagnosis
   
• ₹5,000 for pre-hospitalisation care

So, Ravi paid ₹0 from his pocket.

Key Benefits:

• Covers hospitalisation and diagnostic tests
   
• Offers cashless treatment
   
• Maternity cover (in some policies)
   
• Family members can be included

2. Travel Insurance

When travelling abroad, emergencies can be costly. Travel Insurance covers a range of incidents to reduce the financial burden.

For example, Meera lost her passport in London. Reissuing and legal support cost ₹12,000. Her policy covered the entire amount.

Covers:

• Medical expenses abroad
   
• Loss of passport (up to ₹15,000)
   
• Baggage loss (up to ₹50,000)
   
• Trip cancellation/delay
   
• Accidents

3. Home Insurance

Your house is a valuable asset. Home Insurance protects it from various damages.

For example, A short circuit in Amit’s home caused damage worth ₹2,00,000. His home insurance covered ₹1,80,000 for repairs and damages.

Protects Against:

• Burglary and theft
   
• Natural disasters (earthquake, flood)
   
• Fire and man-made risks
   
• Terrorism

Note: Land cost is not covered.

4. Motor Insurance is mandatory in India for any vehicle. Third-party insurance is a must, but comprehensive plans offer wider cover.

For example, Rekha's car met with an accident. Repair cost: ₹35,000. Her policy covered ₹30,000 after a ₹5,000 deductible.

Types:

• Two-wheeler Insurance – Covers bikes and scooters
   
• Car Insurance – For private vehicles
   
• Commercial Vehicle Insurance – For goods and transport vehicles

These insurances offer peace of mind and financial safety in tough times.

Why General Insurance Is a Wise Investment?

Life Insurance supports your family after you are gone, but General Insurance protects you while you live. It shields you from sudden financial burdens and helps you live with peace of mind. Here are the main benefits of General Insurance:

1. Protects You from Accident Costs

Car repairs after an accident can be expensive. General Insurance helps cover these costs, reducing your financial stress.
Example: If your car repair bill is ₹40,000, your policy might pay ₹35,000.

2. Covers Hospital Expenses

Health insurance pays for treatment, medicines, and tests when you or your family are hospitalised.
Example: A hospital stay costing ₹60,000 could be fully paid through your health cover.

3. Secures Your Valuable Assets

Your house, car, and belongings are at risk from fire, theft, or natural disasters. General Insurance helps you repair or replace them without paying out of your pocket.
Example: If fire damages your home worth ₹2,00,000, insurance can cover the repair.

4. Provides Comprehensive Health Cover

General Insurance includes various health-related benefits like maternity cover, pre- and post-hospitalisation, and check-ups, offering full medical protection.

5. Handles Travel Risks and Costs

When you travel abroad, losing baggage or missing a flight can be costly. Travel insurance covers these situations and allows you to travel without worry.

List of Registered General Insurance Companies in India 

Every general insurance company in India must register with the Insurance Regulatory and Development Authority of India (IRDAI). As per IRDAI’s official records, 26 registered general insurers are operating in the country as of November 2023. Below is the list, arranged in alphabetical order, for easy reference.
 

Documents Needed to Buy General Insurance

When you apply for a general insurance policy in India, you must provide certain documents to verify your identity, address, and the asset being insured. While the exact list may vary by insurer and policy type, here are the most commonly required documents.

Conclusion

General insurance is a contract that protects you from financial losses caused by accidents, health issues, natural disasters, theft, or travel-related risks. It does not offer life cover but safeguards your valuable assets and well-being during your lifetime. By paying a small premium, you ensure that you do not face a heavy burden when unexpected events occur.

FAQ’s

1. What is general insurance?
General insurance protects you from financial loss due to accidents, theft, illness, or property damage. It does not cover life.

2. Is general insurance mandatory?
Some types, like motor third-party insurance, are legally required. Others, like health or home insurance, are optional but helpful.

3. What does a general insurance policy cover?
It covers risks related to health, vehicles, travel, property, and more. The coverage depends on the policy you choose.

4. Who can buy general insurance?
Any adult living in India can buy general insurance by submitting a valid ID, address proof, and related documents.

5. Can I claim general insurance more than once?
Yes, you can claim it multiple times, but only up to the insured sum or policy limit during the policy term.
 

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