General insurance is the term for any type of insurance that is outside the realm of life insurance. Insurance is a contract between the policyholder an insurance company, the purpose of insurance contract is to ensure against risk. The risk may or may not occur. It is possible for a person to have car insurance all their life and never have an accident; however car insurance is a legal pre-requisite of owning a car. General insurance covers the risks in life that are not putting your life at risk.
In this type of general insurance the person insured pays an insurance premium to guarantee that in the event of the general insurance risk occurring they are covered. There are no contractual warranties that the risk or general insurance contingency will ever occur, and there are no refunds issued if the event such as a car accident does not occur. This differs from life assurance because this is a type of insurance that guarantees a payout when the contingency occurs, in this case death. Assurance is a type of insurance cover that insures against the inevitable contingency, the variable is the fact that there is no certainty in terms of a timeline when the event will take place.
There are many different types of general insurance; in America it is often called either property insurance or casualty insurance, whereas in Europe general insurance is referred to under the eponymous generic term of nonlife insurance.
Types of general insurance
- Home insurance.
General insurance in the form of home insurance can fall into two types. The first is for the building or the external structure of the house. The second type of policy is for the contents and this includes things such as furniture, carpets, drapes and anything that you could safely remove from the house without damaging the structure.
Commercial insurance operates like house insurance there are two categories. The first category is the external structure and is generally for the same things as home insurance. If anything happens to the structure of your building you are covered to rebuild it but as a standalone policy commercial property insurance does not insure the movable assets of the business. The removable assets of the business such as desks, equipment, and stock have to be insured separately in an assets insurance policy.
- Vehicle insurance
In general insurance for vehicles the types of vehicle to be insured is crucial. It is cheaper to insure a car than it is to insure a commercial vehicle. A commercial vehicle by its definition implies that it will be used more often than a car and that potentially more drivers may use it, thus increasing the risk. There are ways of reducing commercial general insurance for instance if you are a one-man business and the only driver of your commercial vehicle then there will be a smaller premium to pay. As a general rule you vehicular insurance covers you for any damage that your vehicle does to other vehicles or people. If you have fully comprehensive vehicle insurance any damage to your vehicle will also be paid for however unless stated your vehicle is not insured because this is not a legal requirement. In other words and vehicle insurance is a type of insurance against the contingency that you will hurt someone or damage their car or property.
- Health insurance
Health insurance is a type of general insurance that insures against the contingency of medical expenditure. Depending on the policy health insurance can be comprehensive and include all treatment medical expenses including surgery for a doctor, a dentist, or hospital treatment.
- Travel insurance
Travel insurance is a type of short-term general insurance that covers you for certain contingencies such as a lot of baggage when you are on vacation. Depending on the policy it made insure you for theft of your camera equipment when you are holiday. In certain cases it is worthwhile that you read the terms of your home insurance because if this is comprehensive it may cover theft of your belongings such as your laptop on vacation. However it is not advisable to assume that your home contents insurance covers your belongings when you are on vacation.
- Landlord insurance, or Second Home Insurance
Landlord insurance is a type of insurance for second homes. Second home insurance tends to be more expensive than insurance for your primary property because it may be empty for a portion of the year and the risk of damage is higher than in a property which is occupied all year.
- Pet insurance
Statistically one in three domestic pets will need a surgical operation in each year. Pet insurance is a type of insurance to cover for the cost of veterinary bills. There are no overall blanket policies in general compare prices and read the small print to ensure that you have insured everything you think your pet will personally require. Pet insurance is now such big business that there are specialist companies who deal only in cat or dog insurance.
The above list gives examples of general insurance it is by no means complete. In the history of insurance it has been a known for an actress to insure her legs. Betty Grable, a famous actress, singer and dancer, was the first woman to insure her legs for a million dollars in the 40s. At the height of his career David Beckham the English footballer who played in Los Angeles reputedly had his legs insured for 70 million!
This type of specific General insurance is usually taken out from a specialist insurance company such as Lloyd’s of London who guarantee that for a price, they will insure anything.
Although it is cheaper to take out a large comprehensive general insurance policy, when it comes to claiming you are not generally as comprehensively insured as you would have been with several specific insurance policies. However it can be a benefit to some people will work out cheaper before your specific insurance policies such as vehicle insurance, home insurance, health insurance and travel insurance are all insured by the same insurance company.