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Are You Buying General Insurance for the First Time? Check Out This Guide

General insurance is a great way of protecting people and objects you love. While health insurance, travel insurance, personal accident insurance takes care of you and your family; motor insurance, home insurance, commercial insurance, etc. protects your assets from any kind of unforeseen risks.

A lot of you might be buying insurance for years but several people haven’t purchased a general insurance policy in their lives. Many such people today want to buy insurance from companies, such as Religare Insurance, Reliance General Insurance, etc. but don’t know how to go about it. As a result, they keep postponing their insurance purchase or end up buying an unsuitable policy for themselves.

If you are one of those people who will be buying general insurance for the first time, this guide will help you find your ideal policy and educate you about the various factors to consider while doing so.

First and Foremost

You should be clear about the kind of general insurance that you want to buy. Just like you never go out shopping in the market without knowing what you have come to buy, you can’t buy insurance until you know what you want to insure. For instance, you must know whether you want to buy travel insurance, home insurance, bike insurance or a health insurance policy.

The best way to know the kind of insurance that you need to buy is by analysing what you want to protect. For example, if you want to safeguard your shop, you should buy shopkeeper’s insurance from insurers such as Reliance General Insurance. But if you wish to get your medical expenses covered, you must buy health insurance from companies, such as Religare Insurance.

Know the Type of General Insurance Plans

Now that you have decided to buy general insurance, the first thing to do is to know about the types of general insurance plans available. Different types of general insurance come with their own sub-types. You need to choose one of these sub-types to be able to buy insurance.

For instance, Reliance General Insurance offers two types of car insurance plans - Third Party Liability Insurance and Comprehensive Insurance. You need to choose any one plan type to be able to buy car insurance. Similarly, Religare Insurance offers health insurance plans for individuals, families, senior citizens, heart patients as well as diabetic patients.

At this point, it is important to be aware of the kind of coverage you are looking for to protect the person or product concerned. Moreover, you should carefully analyse the pros and cons of all sub-types of general insurance to find the perfect cover.

Find Your Ideal Insurance Plan

The next step is to find the ideal general insurance plan for you. You need to look for a plan that fulfils all your insurance needs without charging you a hefty amount. The best way to do so is by comparing different insurance plans offered by general insurance companies in India, including Religare Insurance and Reliance General Insurance. The plans should be compared based on the coverage offered, premium price as well as the benefits available.

You can easily compare different general insurance plans at one place by visiting the website of online insurance brokers, such as Policybazaar Insurance Brokers Private Limited (formerly known as Policybazaar Insurance Web Aggregator Private Limited). They enable you to compare the coverage, benefits, premium and other crucial aspects of different insurance plans free of cost before choosing the plan you want to buy.

Choose the Add-On Covers to Buy

At the time of comparing general insurance plans online, you must also check the alteration in premium prices on purchasing different add-on covers. For the unversed, add-on covers are the extra protection covers that you need to buy by paying a higher premium price.

For example, if you are buying car insurance from Reliance General Insurance, you will be able to buy add-ons, such as nil depreciation cover, EMI protection, NCB retention cover, etc. Similarly, Religare Insurance offers add-on covers, such as global coverage, no claim bonus super, OPD care, reduction in pre-existing diseases wait period, etc. under its health insurance plans.

Different add-on covers impact the premium of a general insurance plan differently. For example, your premium may increase by 5% if you decide to buy a particular add-on cover. But if you opt for another add-on cover, your premium may rise by 10%. Besides, the cost of an add-on cover may vary from one insurer to another.

Therefore, you must check the impact of different add-on covers on your insurance premium. You can discover the right combination of add-ons that works the best for you by using an insurance premium calculator.

Things to Consider Before Selecting a General Insurance Plan

Before you decide which general insurance plan to buy, you must keep the following things in mind:

  • Sum Insured - Always check the sum insured or the insured declared value (as in the case of motor insurance) offered under an insurance plan. A sum insured is the maximum amount that you’ll be paid in the event of a claim. A higher sum insured will increase your premiums but a lower sum insured would force to pay from your pockets during an emergency. Thus, you must choose a sum insured that optimally covers your costs at an affordable premium rate.
  • Premiums - The premium of a general insurance plan is one of the most important factors to consider while buying insurance. You should aim to choose a plan that fulfils your insurance needs in the best way without overstepping your budget.
  • Benefits - Go through the various benefits available under an insurance plan before deciding the one to buy. They include claim assistance services, no pre-policy health check, zero paperwork, cashless garages, network hospitals, etc. For instance, Religare Insurance has a network of over 7400 empanelled hospitals while Reliance General Insurance has a network of over 4400 cashless garages.
  • Claim Settlement Speed - It is important to check the claim settlement speed of a general insurance company before buying a plan. This is because if a company is known for settling claims quickly, it will most likely settle your claims quickly and pay you the claim amount as soon as possible.
  • Incurred Claim Ratio - Don’t forget to check the Incurred Claim Ratio (ICR) of a general insurance company before buying a policy. This is because companies with a higher incurred claim ratio are less likely to reject your claims as compared to the ones with a lower ICR. For instance, the ICR of Religare Insurance is 55% and the Reliance General Insurance has an ICR of 86% for the year 2018-19.
  • Discounts - You must find out about the various saving options available under a general insurance plan to reduce the premium to be paid. For example, Reliance General Insurance reduces car insurance premium if you have a security device installed or have AAI membership.
  • Deductibles - Before you buy an insurance plan, make sure to check the deductibles. The deductibles are the share of the claim amount that you will be required to pay at the time of claims settlement.

Pay the Insurance Premium

Once you have chosen the general insurance plan that you want to buy, you need to pay the premium amount. Online buyers can pay the premium amount online using internet banking or their bank debit or credit cards. Remember to keep your card and internet banking details handy before commencing the payment process. As soon as the general insurance company will receive your payment, they will issue the policy to you.

Factors Affecting General Insurance Premium

Several factors influence the premium of a general insurance plan. Take a look at them below:

  • Person/ Product Type - The person or the product to be insured affects the general insurance price. For example, Religare Insurance charges different travel insurance premiums to students and frequent flyers. Similarly, the premium for car insurance varies as per the make and model of a car.
  • Coverage - The level of coverage you opt for affects your premium amount. For instance, the premium for comprehensive bike insurance will be higher than third party insurance.
  • Age - The age of the person or the product to be insured determines the premium amount. The higher the age, the lower will be the premium due to lesser liability on the insurance company.
  • Sum Insured - If you choose for a higher sum insured, you will be required to pay a higher premium amount as they are directly proportional to each other.
  • Geographical Location - If you stay in a high-risk area or metro city, you will be required to pay a higher premium as these places are more prone to mishaps.
  • Add-Ons - Add-ons attract an extra premium amount. So more the number of add-ons, the higher will be the premium amount.
  • Discounts - Discounts are meant to lower your premium price. So if you are able to get any saving options, your premium will be reduced.

Parting Words

There you go. You know how to go about buying a general insurance policy. Make sure to keep these things in mind or refer to this guide while buying general insurance for the first time.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.