Any Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover assets against Fire and related threats, flood storm and flood, earthquake and so on. There are insurance products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and so on. A Marine Cargo policy covers goods and products in shipment including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major portion of non-life insurance business.
In respect of insurance of property, it is essential that the cover is taken for the definite value of the property to avoid being forced a penalty should there be allege. Where a property is undervalued for the purposes of insurance, the insured will have to bear a ratable proportion of the loss. For example if the value of a property is Rs.100 and it is insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be Rs.25/- (50% of the loss being borne by the insured for underinsuring the property by 50% ). This concept is quite often not understood by most insured’s.