After disembarking from a flight, we all have the universal experience of waiting with bated breath to collect our luggage. After all, we’ve heard plenty of horror stories about lost or stolen belongings. There’s always this fear at the back of our minds — what if my luggage never arrives? Will I get compensated for my losses?
Apart from life and health insurance, general insurance is taken to protect yourself and the things you value. It doesn’t just cover your luggage, but also your property, car and more. With general insurance, your insurer will pay you in the form of an assured sum or agreed amount to cover losses under certain circumstances.
Life and health insurance are must-haves, and they cover you for many mortality and critical illness scenarios. However, life and health insurance do not cover all the things we value, namely non-life assets. These are not just trivial things, as losing them could be severely detrimental. If you lost your home to an accidental fire, for example, not getting any insurance payout would certainly make rebuilding your life much harder.
Travel is another type of general insurance to protect yourself against the uncertainties of going abroad. Knowing that you’re covered in the event of sudden trip cancellation, injury, loss of personal belongings or personal liability gives you peace of mind. Which is great news for any R&R vacation.
In summary, general insurance covers fire, burglary, theft, accident, motor vehicles, travel and more. Unlike life insurance, which is a long-term contract with monthly premiums, general insurance policies are usually short-term contracts renewed yearly.
General insurance policies are also mostly contracts of indemnity - meaning that while it covers any relevant losses, there are no savings and investments aspects. In other words, if there are no claims made during the tenure of the policy, none of the premiums paid is given back to you.
Here’s a closer look at the main types of general insurance:
Property is one of the most valuable non-life assets a person can own. Sometimes, your home can feel impenetrable, providing you with safety and security, but it is also susceptible to damage, loss and theft. Home fires make the headlines every year, caused by all sorts of things, from exploding PMDs to lighted cigarette butts.
Fire insurance is a form of property insurance, which protects you in the event of damage and loss caused by fire. A basic form of fire insurance may already be part of your property insurance policy, but additional coverage can be purchased for added protection. Fire insurance aims to support the costs of repairs, replacement or reconstruction of property over the maximum amount established by the property insurance policy.
That said, fire insurance is not to be confused with complete home insurance in the event of a fire. Some fire insurance schemes do not cover the loss of the contents of your home, including your personal items, appliances, fixtures, kitchenware, furniture and more. In case of an accident, the cost of replacing these can add up quickly. Luckily, home insurance is quite affordable compared to the cost of your home.
When you purchase home insurance, often you’re asked to decide if you want an “insured peril” or “all risks” policy.
Insured Peril Policies: cover your home against specifically listed risks (aka perils) in your policy. Such risks include basic risks like fires, floods and housebreaking.
All Risks Policies: covers every risk that it does not explicitly omit. A wider range of risks are covered, including earthquakes, hurricanes and tornadoes.
Regardless of which you decide is best suited for your needs, a good policy will cover things like:
*not exhaustive
Moreover, most insurers have a 24-hour hotline to call or an online claim process for quick claims process. Just remember to keep your receipts in the event of an emergency, and make sure your home is reasonably maintained. Damages due to your own negligence may not be covered!
Whether you want to or not, a basic form of motor insurance is compulsory for all car owners in almost every country in the world. Specifically, it’s compulsory to have insurance that covers third-party liabilities, also known as Third-Party Only (TPO).
What is third-party liability?
Getting comprehensive coverage is recommended, as better policies cover both you and your vehicle against financial damages or losses that arise from a motor accident. It may even cover you for personal injury, or the cost of damage that you cause to third parties, along with any other loss or damage that you suffer in a motor accident. If you’ve taken a car loan from a bank, it might be compulsory for you to get this level of coverage.
Aside from the level of coverage wanted, most insurers will adopt a "risk factor rating system" when setting a premium price. The more risk you are believed to have, the higher your premium will be. The list of risk factors may include:
Another factor that determines the premium is the No Claim Discount (NCD) (sometimes called a No Claim Bonus in other countries). As the name suggests, the NCD is a discount you get on your insurance premiums if you don’t make any claims for a given year. The more consecutive years you go without making a claim, the bigger the discount gets. Think of it as your insurer's way of recognising and rewarding you for having been a careful driver!
If you make a claim and you are at least partially responsible for the accident, your discount is reduced. Note that once you have a policy, you must file an accident report following every accident, as not doing so would be a breach of the insurance policy condition.
The cost of the insurance premium should not be the only deciding factor in determining what insurance to get. For instance, comprehensive coverage is certainly more expensive, but it will cover you in many more scenarios than the basic TPO policies. You should also consider how much excess the policy determines. The amount of excess refers to the amount you have to pay out of pocket before the insurance company pays for the rest. Policies with lower premiums tend to have higher excess amounts, meaning that you would need to pay more upfront in the event of an accident.
Before every #wanderlust Instagram post is (hopefully) a solid travel insurance policy. In your travel budget, be sure to include travel insurance. Travel insurance covers any possible losses due to unforeseen circumstances from before, during and even after an overseas trip. It can cover events such as accidental injury, high medical bills, travel disruption, loss of personal belongings and personal liability.
According to the General Insurance Association, there are different types of travel insurance:
Although specific coverage and benefits differ between insurance providers, most comprehensive travel insurance policies cover personal accidents, medical expenses, travel delay, trip cancellation and loss of baggage.
You should choose a travel insurance policy based on factors such as frequency of travel. If you travel multiple times a year, an annual cover might make more sense than having multiple single-trip policies. The location you are travelling to makes a difference as well. The price of insurance can vary between the different regions (ASEAN/Asia /Worldwide). If the area you are travelling to doesn’t have good medical infrastructure, you might opt for a policy that covers medical evacuation as well.
This one is for all the parents of precious furkids. Even cats and dogs are insurable, as long as they are older than 8 weeks and younger than 9 years old. If you’ve had your furkid for a while, you’ll know that vets can be very expensive, so insurance will help with some of that. For pet-specific policies, other events that may be covered include:
Depending on the policy, some exclusions do apply. For example, non-surgical treatments, preventative care, fees for putting your pet to sleep, and conditions arising from breeding are usually not covered. Some dog breeds are not covered under certain insurance policies as well. Also, it’s worth noting that pet insurance plans tend to follow a coinsurance or deductible model, meaning that the insurance provider will only cover most, but not all, of the fees. This means that you will still have to pay a portion, up to 50%, of the total fees or damages incurred yourself. As such, it’s important to read the terms and conditions of your pets’ insurance plans carefully or ask your insurance agent to explain the terms before paying the premiums.
Whether it’s for yourself, your home, your pet or your car, general insurance can play a vital role in covering unforeseen circumstances and protecting the things you value... and sometimes love, too!
GENERAL INSURANCE. COMPLETED. ✅
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