The importance of general insurance is no different than it is in the case of life. When you read the next section on categories of general or non-life insurance, you will understand how diversified it is, which itself explains the importance of general insurance.

• It helps when there is temporary loss of income due to accident
• It helps in case of accidental disability and one permanently loses an income source
• It helps in case of theft of an asset or accidental damage to household items and valuables etc.
• It helps in case of damage to property due to external causes such as rain, storm etc.
• It helps in case of damage to own vehicle in case of an accident
• It helps in case of damage caused to the vehicle or property of a third party
• It helps in case of loss or damage caused by an employee due to fraudulent activities etc.

The scope of general insurance is vast. It aims to compensate the owner, be it an individual or an organization, in case of any damage to an asset or stock. However, insurance is based on the principle of indemnity, which means ‘to make good the loss’. This explains that insurance is not meant for gaining from the loss but to merely be compensated for the financial loss to replace the asset or to recover the value of the asset at the time of loss, as per the preference of the owner getting the asset insured. For a meagre fraction of the value of the asset, one can protect from accidental financial loss, which gives an immeasurable peace of mind and financial stability to the finances.

Below are different kinds of general insurance products available.

• Fire Insurance
• Motor Insurance
• Householder’s Insurance
• Overseas Travel Insurance
• Marine Insurance
• Shopkeeper’s Insurance
• Commercial Insurance
• Rural Insurance
• Crop Insurance
• Personal Accident Insurance
• Health Insurance etc. (Though in the present day there are exclusive Health Insurance companies, Health is a subject matter of Non-life insurance. So, we are just adding a name here but discuss it in detail separately.)
• Motor insurance provides coverage for the damage due to natural or manmade but accidental circumstances. It also covers theft. Motor insurance is governed the Motor Vehicle Act.Motor insurance is broadly categorized into 3 variants.Third-party liability Comprehensive package Add-on cover (Optional)Third party liability covers the damage or loss to any third party such as a person, a vehicle or a property either public or because one’s own vehicle. Comprehensive package cover damages / losses to self, own vehicle and third-party liabilities. Add-on covers like tyre protection, zero protection, return to invoice, engine and gearbox protection and break-down assistance provides additional shields to the vehicle.
• Home insurance policy covers both home and the items in home like electronic gadgets, jewelry etc. either through natural or man-made circumstances. The contents that are covered depend on the type of policy one buys.
• Travel insurance covers financial liability due to a medical condition or non-medical damages when one travels within India or abroad. It covers loss or theft of valuables as well as documents. Travel insurance can be taken for either personal or business trips and the duration of one-time travel can be a maximum 180 days. One can renew the policy or take another policy if the travel time is extended for more than 10 days with prior intimation to the insurer. Travel Insurance covers medical emergencies, loss of baggage, loss of passport, hijacking, delayed flights, accidental deaths etc. 
• Marine insurance covers the loss from damage to ships, cargo, terminals, and any transport by water, by which a property is transferred, acquired, or held between the points of origin and the destination. Marines insurance is broadly classified as below.
  1. Freight insurance – Covers financial loss to owner when good are in transit from supplier to recipient. This is also called as goods insurance.
  2. Liability insurance – Covers risk arising out of legal liabilities, injury, property damage etc. It safeguards individuals and or businesses against risks that may cause legal liability.
  3. Hull insurance – It provides coverage to water vehicles like boat, ship, yacht, fishing boat, steamer etc. This can be compared to motor insurance, with the difference being water faring vehicles instead of land transport.
  4. Marine Cargo insurance – Covers financial loss to an owner when good are in transit on the ocean from supplier to recipient. It covers bottom line against fire and loss.
• Commercial insurance is the coverage for business and corporates designed to cover the business, employees and ownership. It covers business against losses arising from damage to property, injury to employees etc. It is also known as business insurance that covers public liability as well as employer’s liability.
• Rural insurance has been created specially to cover the rural public and their businesses. As per IRADI, below are the criteria for getting eligibility to take rural insurance.
  1. Population should be less than 5000 in the locality
  2. Density population should be less than 400 per square Kilometer
  3. Minimum 75% of male population should be engaged in farming activities
  Under rural insurance a wide range of products can be offered. Below are some of products which are available in market and useful.
  1. Motor Insurance – Provides comprehensive coverage for agriculture vehicles like tractors, cars, scooters, motorcycles etc.
  2. Property Insurance – Provides coverage for home, retail outlets, shops, schools, etc.
  3. Accidental Insurance – Provides coverage for accidental death, partial or total disability to individuals
  4. Poultry Insurance – Provides coverage for broilers and parent stock of chicken
  5. Livestock Insurance – Provides coverage for cattle against death or disability
• Crop insurance is purchased by agricultural producers, and subsidized by the government, to protect farmers the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities.

• Peace of mind: When one gets an asset (in fact, all assets) insured, one can breath easy from the fact that one will be compensated adequately in case of accidental loss or damage. That does not mean one must be negligent about protecting the asset from the possible occurrence of any kind of damage.
• Natural calamities can be devastating for individuals as the properties can get damaged severely. Damage to the stock in trade for the business can cause a great strain on the finances. Insurance will ensure that such damaged asset or stock is easily replaced without any financial burden.
• Insurance is a small price we pay for a great financial compensation. In the absence of insurance, replacing or repairing an asset can put a big hold in the pocket not just for individuals and families but also corporations.
• With adequate insurance for all valuables and assets, the need to maintain a cash reserve to retain some risk is minimal or nil. Such amount can be best utilized by families or businesses to invest elsewhere for greater returns in the long term, which cannot be undermined at all.
• Not only damage caused to one’s own body or asset or property, but damage caused to the lives and properties of others can also be covered through general insurance.

There are no limitations of general or non-life insurance whatsoever. However, it is possible that some individuals or businesses who are not in their right mind may resort to unethical practices and deliberately damage one’s own assets with the intention of unduly gaining from insurance. One must understand that the surveillance and verification process undertaken by insurers is very stringent and flawless, and any such practices will not be regarded lightly. Persons resorting to malpractices will be punished to the full extent of the law, which is also a bad thing for one’s reputation in the society or neighborhood.

However, one limitation as regards not the concept of insurance, but the product can be cited. In case of products such as personal accident, insurers may limit the maximum amount of accidental disability insurance one can buy, though such limit is reasonable and high for a large number of individuals.

In addition to the natural advantages of having an asset insured, insurance also provides some tax benefits to the policy holder.

• Businesses can claim the premium paid towards motor insurance as expenditure if the vehicle is used for business purposes only.
• Claim admitted by the insurance in case of personal accidental disability is fully exempt from tax if the disability is permanent and proportionately exempt if the disability is temporary.
• Compensation received or claim admitted in case of motor accidents is not taxable

Though health is a subject matter of non-life insurance, we shall discuss it separately in the health insurance section in details.