Life is unpredictable. One moment, everything is smooth
sailing, and the next, you could be faced with an expense that you are probably
unable to afford. A sudden turn of unfortunate events can drain away all your
savings and the only way you can prevent this is by investing in the necessary
insurance policies. Typically, you need to invest in a wide range of policies.
There are three broad types of policies you can invest in – general, life, and
health insurance. General Insurance in India is further divided into three
categories.
They are as under
Vehicle Insurance: Vehicle or Motor
Insurance is the first type of general insurance you need. You must invest
in vehicle insurance if you own any vehicle – be it a two-wheeler or a
four-wheeler. All vehicle owners in India must invest in this type of
insurance. As per the Motor Vehicle Act of 1988, all vehicle owners are
required to invest in a basic third party, limited liability policy that
protects them in case of accidents in which a third party is injured, or their
vehicle damaged. You also have the option to invest in a comprehensive vehicle
insurance policy, which safeguards, both you and the third party. Comprehensive
insurance policies also provide protection against natural disasters and
human-made incidents in which your vehicle is damaged, destroyed or stolen.
Home or Property Insurance: Buying a property is the
most significant type of investment you can ever make. As such, it is essential
to purchase insurance and protect it against a wide variety of natural
disasters or ‘Acts of God’ and human-made incidents like theft, robbery,
property destruction, vandalism, and so on. You can afford protection to the
properties you own with the help of a general insurance policy. Like in the
case of motor insurance, you can choose two significant types of insurance
plans for your properties – insurance for your residential as well as
commercial properties you own. Premiums for property
insurance are typically high. The premium amount is determined based on the
content or assets held within the property – for instance, computers,
electronic equipment and inventory in commercial properties or furniture and
electrical goods in residential properties
Travel insurance: Typically, you do not need general
insurance in India for domestic travel. However, you have to purchase this
policy if you are travelling abroad. The travel policy is an excellent
investment as it covers you against various scenarios when you are far away
from home in a foreign land. For instance, the policy covers you against loss
of luggage and valuables, including your wallet (bank cards and money),
passport and other documents. The plan also covers you against flight delays.
It also doubles as a medical insurance policy and covers you against
hospitalisation costs if you fall ill while you are abroad. You must buy travel
insurance for business and leisure trips, and these policies typically cover
you only for a specific period.
