What are the types of insurance coverage?

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Six common car insurance coverage options are: auto liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments coverage and personal injury protection. Depending on where you live, some of these coverages are mandatory and some are optional.

Risk is everywhere: When you drive your car to work, when you visit a new country, when you ride your bike to a nearby shop, when there’s a new bug going around in town.

Bottomline: You need the security of insurance.

There are two broad types of insurance:

  • Life Insurance
  • General Insurance

What is Life Insurance

Life insurance is a contract that offers financial compensation in case of death or disability. Some life insurance policies even offer financial compensation after retirement or a certain period of time. Life insurance, thus, helps you secure your family’s financial security even in your absence. You either make a lump-sum payment while purchasing a life insurance policy or make periodic payments to the insurer. These are known as premiums. In exchange, your insurer promises to pay an assured sum to your family in the event of death, disability or at a set time.

What is General Insurance?

A general insurance is a contract that offers financial compensation on any loss other than death. It insures everything apart from life. A general insurance compensates you for financial loss due to liabilities related to your house, car, bike, health, travel, etc. The insurance company promises to pay you a sum assured to cover damages to your vehicle, medical treatments to cure health problems, losses due to theft or fire, or even financial problems during travel.

What are the types of General Insurance available? / What all can be insured?

You can get almost anything and everything insured. But there are five key types available:

  1. Health Insurance
  2. Motor Insurance
  3. Travel Insurance
  4. Home Insurance
  5. Fire Insurance

Health Insurance

This type of general insurance covers the cost of medical care. It pays for or reimburses the amount you pay towards the treatment of any injury or illness.

It usually covers:

  • Hospitalisation
  • The treatment of critical illnesses
  • Medical bills prior to or post hospitalisation
  • Day care procedures like Cataract operations

You can also opt for add-on benefits like:

  • Maternity cover: Your health insurance covers you for the costs related to childbirth. This includes pre-delivery check-ups, hospitalisation during delivery, and post-natal care.
  • Pre-existing diseases cover: Your health insurance takes care of the treatment of diseases you may have before buying the health insurance policy.
  • Accident cover: Your health insurance can pay for the medical treatment of injuries caused due to accidents and mishaps.

Motor Insurance

Motor insurance is for your car or bike what health insurance is for your health.

It is a general insurance cover that offers financial protection to your vehicles from loss due to accidents, damage, theft, fire or natural calamities

You can also get motor insurance for your commercial vehicles.

In India, you cannot drive or ride without motor insurance.

Let’s look at the two key types:

1. Car Insurance

It’s precious—your car. You paid lakhs of rupees to buy that beauty. Even a single scratch can be painful, forget about bigger damages.

2. Two-wheeler Insurance

This is your bike’s guardian angel. It’s similar to Car insurance.

Travel insurance

A travel insurance compensates you or pays for any financial liabilities arising out of medical and non-medical emergencies during your travel abroad or within the country.

Home Insurance

Home insurance is a cover that pays or compensates you for damage to your home due to natural calamities, man-made disasters or other threats.

It covers liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage. It not only offers financial protection to your home, but also takes care of the valuables inside the property.

Fire Insurance

Fire insurance pays or compensates for the damages caused to your property or goods due to fire.

It covers the replacement, reconstruction or repair expenses of the insured property as well as the surrounding structures.

It also covers the damages caused to a third-party property due to fire.