General insurance explained through FAQs

Exhilaration and risks are what life is all about. Some unpredictable situations and scenarios can cause both emotional as well as financial stress. If you wish to safeguard your assets such as a vehicle, motorcycle, and home, then general insurance is what you require. Financial loss could occur owing to natural and human made calamities, accidents, casualties besides death, legal actions, and theft.

Look for relevant insurance policies that provide you with essential coverage. Unlike life insurance policies which are for a lifetime, general insurance India needs to get renewed frequently. The risks that do not get covered under life insurance are included under general insurance policies.

Let us understand the concept with some basic FAQs:

What is general insurance?

These are insurance policies that protect your assets, such as home, vehicle, and motorcycle. Some of the forms of general insurance are –

Motor insurance

Marine insurance

Home insurance

Health insurance

Travel insurance

Commercial insurance

How secure is it to purchase the plan online?

Considering it is an era of digitization, every financial instrument is available online. This has made more and more financial institutes alert of the payment methods and security of the transactions. They assure the safety of personal information and hence, is entirely secure to purchase the policy online.

How to make an insurance claim?

There are two ways about making general insurance India claim –

Cashless claim: It is where the receipt for your services get directly settled between the insurer and the service provider. Say you avail of the cashless benefit of health insurance, and then the bills get paid between the hospital and the TPA. Under car insurance, the bill receives settled between the garage and insurance company. However, for the same, you need to furnish some evidence for making a claim.

Reimbursement claim: Here, you need to settle your claims by receiving the bills from the service provider and ask for a reimbursement by furnishing the receipts to the insurance provider.

How do premiums get calculated?

Various parameters affect your insurance premium –

Two-wheeler insurance: It largely depends on the Insured Declared Value (IDV) of the bike. The IDV is the ex-showroom price, depreciation, cubic capacity, and registration area.

Car insurance: This calculator is the most versatile as you can compare the quotes of different insurers in India. The generic formula is –

Own damage premium – (depreciation + No Claim Bonus) + Liability Premium

Most of the insurance companies use this formula.

Health insurance premium: It depends on factors such as cost of marketing and management, medical underwriting, personal history, and mortality.

What is No Claim Bonus?  

Also referred to as NCB, are offered to the general insurance policy holders for not claiming during the insurance year. The range of NCB is anywhere between 10 per cent to 50 per cent, depending on the number of years you make no claims. But remember, after five years, the NCB is not applicable.

What is the zero-depreciation cover?

Most of the vehicle owners nowadays prefer opting for zero-depreciation cover as they receive complete claim without any deductions for depreciation of replaced parts. This also covers the repairing costs of glass, rubber, plastic, and fibre.