8 Types of Insurance

 Types of Insurance Business are;
  • Car insurance
  • Life Insurance or Personal Insurance.
  • Property Insurance.
  • Marine Insurance.
  • Fire Insurance.
  • Liability Insurance.
  • Guarantee Insurance.
  • Social Insurance.

These are explained below:

Car Insurance

Car insurance is a type of insurance policy that efficiently takes care of expenses arising from unfortunate events, such as an accident, theft, and any third-party liability. Car insurance is the best way you can protect yourself and your car from financial emergencies, including any legal liability, resulting from physical damage, traffic collision, bodily injury caused to you, your car, or a third party. Various car-insurance-specific terms & conditions are subject to vary with legal regulations in different regions of the country.

Car Insurance or motor insurance covers for losses that you might incur if your car gets damaged or stolen. The premium amount of your car insurance is decided on the basis of Insured Declared Value or IDV of the vehicle. If you increase the IDV, the premium rises and if you lower it, the premium reduces. It is important for any policyholder to compare various car insurance options before going for a car insurance renewal or buying a new policy.

Key Benefits of Car Insurance

  • Coverage against loss or damage to the insured vehicle.
  • Coverage against loss or damage to your vehicle caused by accident, theft, fire, explosion, self-ignition, lightning, riots, strikes or act of terrorism, natural calamities.
  • Coverage against financial liability caused by the injury/death of a third party or damage to the property.
  • Personal accidental insurance cover.

 

Comparing Car Insurance Companies

Car insurance comparison is successful only when you compare different plans from reliable insurance companies. Some insurers might offer total coverage at the lowest price. It might sound good, but you should always check if the insurer is credible or not.  You can check customer reviews and the insurer’s claim settlement ratio online.

Shortlist the Requirement for Your Coverage

Before digging into comparing different car insurance plans, ascertain the kind of coverage you need. A liability policy is inexpensive than the comprehensive car insurance policy but only if you are ready to compromise on some benefits because the facilities offered by the later is the best undoubtedly.

Compared to the coverage Option

The coverage offered in liability policy differs from the comprehensive policy. While liability plan only covers third-party liability, the comprehensive one covers you for the damages to the vehicle and the owner which is called as Personal Accident Cover. The limit varies from plans to plan. Moreover, additional add-on benefits are also offered by some car insurance plans. So, it is necessary to check and compare this trait to decide the personal accidental cover along with the additional coverage, if any under the same car insurance plan.

Compare the Insured Declare Value

The varied rate of IDV’s reflects different rates of premiums. Insured Declared Value, abbreviated as IDV, is the current value of the car after being adjusted for appropriate reduction. The rate of depreciation depends on the age of your car. Older the car, higher would be the depreciation and lowered would be your IDV. And it affects the Sum Assured. Hence, compare the IDV quotes offered by different car insurance plans is a must.

Compare Insurer’s Claim Settlement Practice

Claim settlement is the most crucial part of an insurance policy. Every buyer expects a hassle-free claim process and easiness of any car insurance policy which he is planning to invest in. Each insurance company has its own procedure. Hereby, it is essential to compare the claim settlement process of each car insurance plan which is in your preference list to find out which type of rules best suits you and would enable a faster claim settlement.

Comparing Premiums and Deductibles

Car insurance comparison should be done online on the basis of the deductibles and the premium. Car insurance premium also varies on the basis of the deductibles. Deductible refers to the amount that the insured has to pay at the time of claim settlement. For instance, if the claim amount is Rs. 25000 for accidental repairs and our voluntary deductible are Rs. 5000, and then the insurer will pay off Rs. 20000 at the time of claim. Deductibles certainly reduce the premium amount. However, choose deductibles only when you can pay the cost.

What is not covered in a Car Insurance Policy?

  • Loss or damage if a policy is not in force.
  • Gradual wear and tear of car and its parts.
  • Loss or damage to the vehicle when driven by a person without a valid driving license.
  • Loss or damage to the vehicle as a result of intoxication due to drugs, alcohol etc.
  • Loss or damage to the engine as a result of oil leakage.
  • Loss or damage to the vehicle as a result of abuse of car manufacturer’s guidelines.

Eligibility/Documentation Required for Car Insurance

Getting a car insured requires minimal documentation. For a new policy, you must submit the filled up proposal form and copy of the Registration Certificate (RC). For renewals, you will need a copy of the RC (Registration Certificate) along with the copy of the previous insurance policy.

Carefully fill in your complete details. This is an important step and will save you a lot of hassle during claim time.

Life Insurance

Life Insurance is different from other insurance in the sense that, here, the subject matter of insurance is the life of a human being.

The insurer will pay the fixed amount of insurance at the time of death or at the expiry of the certain period.

At present, life insurance enjoys maximum scope because the life is the most important property of an individual.

Each and every person requires the insurance.

This insurance provides protection to the family at the premature death or gives an adequate amount at the old age when earning capacities are reduced.

Under personal insurance, a payment is made at the accident.

The insurance is not only a protection but is a sort of investment because a certain sum is returnable to the insured at the death or the expiry of a period.

Property Insurance

Under the property insurance property of person/persons are insured against a certain specified risk. The risk may be fire or marine perils, theft of property or goods damage to property at the accident.

Marine Insurance

Marine insurance provides protection against loss of marine perils. The marine perils are a collision with a rock, or ship, attacks by enemies, fire, and captured by pirates, etc. these perils cause damage, destruction or disappearance o’ the ship and cargo and non-payment of freight.

So, marine insurance insures ship (Hull), cargo and freight.

Previously only certain nominal risks were insured but now the scope of marine insurance had been divided into two parts; Ocean Marine Insurance and Inland Marine Insurance.

The former insures only the marine perils while the latter covers inland perils which may arise with the delivery of cargo (gods) from the go-down of the insured and may extend up to the receipt of the cargo by the buyer (importer) at his go- down.

Fire Insurance

Fire Insurance covers the risk of fire. In the absence of fire insurance, the fire waste will increase not only to the individual but to the society as well.

With the help of fire insurance, the losses arising due to fire are compensated and the society is not losing much.

The individual is preferred from such losses and his property or business or industry will remain approximately in the same position in which it was before the loss.

The fire insurance does not protect only losses but it provides certain consequential losses also war risk, turmoil, riots, etc. can be insured under this insurance, too.

Liability Insurance

The general Insurance also includes liability insurance whereby the insured is liable to pay the damage of property or to compensate for the loss of persona; injury or death.

This insurance is seen in the form of fidelity insurance, automobile insurance, and machine insurance, etc.

Social Insurance

The social Insurance is to provide protection to the weaker sections of the society who are unable to pay the premium for adequate insurance.

Pension plans, disability benefits, unemployment benefits, sickness insurance, and industrial insurance are the various forms of social insurance.

Insurance can be classified into four categories from the risk point of view.

Personal Insurance

The personal insurance includes insurance of human life which may suffer loss due to death, accident, and disease

Therefore, the personal insurance is further sub-classified into life insurance, personal accident insurance, and health insurance.

Guarantee Insurance

The guarantee insurance covers the loss arising due to dishonesty, disappearance, and disloyalty of the employees or second party. The party must be a party to the contract.

His failure causes loss to the first party. For example, in export insurance, the insurer will compensate the loss at the failure of the importers to pay the amount of debt.

Other Forms of Insurance

Beside the property and liability insurances, there are other insurances which are included in general insurance.

The examples of such insurances are export-credit insurances, State employees insurance, etc. whereby the insurer guarantees to pay a certain amount at the certain events.

This insurance is extending rapidly these days.

Miscellaneous Insurance

The property, goods, machine, Furniture, automobiles, valuable articles, etc. can be insured against the damage or destruction due to accident or disappearance due to theft.

There are different forms of insurances for each type of the said property whereby not only property insurance exists but liability insurance and personal injuries are also insurer.