General Insurance

The Insurance protects against the loss likely to be suffered due to unwanted incidents in monetary terms. It is necessarily a contract between the insurance company and buyers of Insurance products. It has all the ingredients of a contract like Offer, Acceptance, and Consideration. The insurance company makes an offer to the customer and the customer accepts it and pays the premium as consideration.

The Insurance company that offers insurance products is called INSURER and the person who buys the insurance product is called INSURED.

The insurance is categorized into two categories namely LIFE Insurance and NON-LIFE Insurance or GENERAL Insurance. As the name suggests, Life Insurance covers the life of a person whereas General Insurance covers the risk attached with non-life objects like properties, vehicles, travels, and other valuables, etc.

Motor Vehicle Insurance

It covers Car, Motor Bike, Commercial Vehicle, etc against the loss occurred due to fire, burglary, or accidents.

Home Insurance

It covers the home and its contents against the Fire and burglary of its contents.

Health Insurance

It covers an individual against the illness or disease. It also covers critical illnesses like Cancer, Cardic problems, etc

Travel Insurance

It provides the covers against the risk associated with travels like accidents, loss of baggage, illness, etc. This type of insurance is popular for traveling abroad.

Fire Insurance

It covers the loss that occurred due to the fire in case of Vehicle, Stock, house property, etc.

Marine Insurance

It covers the risk associated with a sea voyage. This popular in the case of exports of goods through the sea.

Benefits of General Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous regulatory authority having headquarter in Hyderabad. The IRDAI has the responsibility of regulating, promoting and ensuring orderly growth of the insurance business in India.

Financial Security

General insurance protects the financial losses and damage to the policy holder’s valuables and assets, that may have caused due to theft, burglary, terrorism, natural disasters like flood, earthquake, etc.

Tax Benefits

Your general insurance policies and life insurance policies have tax benefits. Health insurance tax benefits in India allows citizens to avail are benefits under section 80D. Senior Citizens, aged above 60 years of age are allowed a tax deduction of Rs. 30,000.

Mental Peace

Insurance policy provides coverage against third-party liability, personal accidents, protection against theft, burglary, terrorism, natural disasters and risks related to any business. Certain policies also takes care of your family and loved ones when you’re not around thus ensures mental peace and makes you worry-free.

Principles of Insurance

.There are seven cardinal principles of Insurance, which are the foundation stone of the contract of Insurance.

Systematic approach involves these steps

The principal of Uberrimae Fidei (Utmost Good Faith)

It is expected from the insured that the information furnished by him is true and correct about the subject matter of insurance. The Insurance company is liable to pay only when the correct information has been furnished to them.

Principal of Insurable Interest

The Insured should have some interest in the object of insurance. Owner of the Car has an insurable interest in Car or owner of the house in the house property.

Principal of contribution

The insurance company is liable to pay their part of contribution only.If a person has obtained Health insurance of Rs 4 lakhs from two insurance companies and in case of a claim of Rs 4 lakhs each company will pay Rs 2.00 lakhs each, not Rs 4.00 lakhs each.

The principle of subrogation

After payment of a claim, the ownership of the insured property transferred to the insurance company. In case of the total damage of a car, the insurance company gets the ownership of Car after payment of a claim.

The principal of Loss Minimisation

It is the responsibility of the insured to minimize the loss in case of any mishappening. In case of fire, insured is expected to take all steps to douse off the fire. He can not simply sit just because he has taken the insurance.

Principle of Causa Proxima (Nearest Cause)

In case of multiple causes of mishappening the nearest cause will be taken into account to decide the liability of the insurance company. In case a car catches fire after meeting an accident. The fire could be taken as a cause of loss.

Components of an Insurance Policy

Declaration: The person taking the insurance has to furnish the information about him or the property for which insurance is being taken by way of a declaration. It is expected that information furnished is true and correct. In case of false information insurance company is not liable to the claim.
Insuring Agreements: This part consists of various terms and conditions of the insurance.
Definitions– This part defines the various terms used in insurance policies.
Exclusions– This part contains what has not covered the policy. It is called exclusion clauses.
Endorsements:- This part contains the endorsement of many in the insurance policy like noting of Hypothecation of Bank in respect of Vehicle or Stocks etc.