What Is Non-Life Or General Insurance?
Non-life insurance is a fixed term agreement between the insurance company and the person taking the insurance policy. Such an agreement is also called an insurance contract. In case of loss or damage of the insured property within the stipulated period specified in the contract, the insurance company pays compensation to the party concerned.
Non-life insurance is an agreement made to avoid the risk of loss of property and liability. In this, the insured company or person gets protection against the losses or risk after getting the insurance. The insurance company does not have to pay any amount if there is no loss or accident during the insurance period.
Non Life Insurance deals with the issue of property and liability, but it also covers some part of human life. For example, accident insurance can be taken individually or collectively. In this, the insurance contract is arranged according to the provision different from the nature of life insurance.
Types Of Non-Life (General) Insurance In Nepal
Non-life insurance business is divided into various types as per regulations 2049:
1. Fire insurance
2. Motor insurance
3. Aviation Insurance
4. Marine Insurance
5. Engineering And Contractor’s Risk Insurance
6. Miscellaneous insurance
In the case of insurance, the condition in which the accident took place due to accidental flame is called fire, while the insurance to get compensation for the financial loss due to such risk is called ‘fire insurance’. In other words, the agreement made between the insured and the insurance company for compensation in case of fire damage is called ‘fire insurance’.
There are two things that are essential for fire insurance coverage.
–The fire must have been accidental
–The flames should have erupted
According to the practice of insurance, fire insurance contract may include other risks like earthquake, flood, typhoon voluntarily.
You May Also Like:
Motor Insurance provides coverage for motor vehicle against any loss or damage caused by accidents and legal liability to third party for bodily injury or property damage. It provides protection for yourself, your vehicle, and for others. It covers damage to your own vehicle, damage to another person’s vehicle, injury or death of a passenger or member of public as a result of an accident this policy covers a crucial area of risk.
Motor insurance includes coverage of vehicles such as: Commercial Vehicle, Private Vehicle, Motorcycle (Two Wheeler), Miscellaneous Vehicle etc.
In Nepal, Motor Insurance is mainly of two types: comprehensive and third party liability. Comprehensive Motor Insurance includes any loss or damage to the vehicle by accidental external means, fire, external explosion, self-ignition, lightning, burglary, house- breaking or theft or any malicious act. Likewise, Third Party Insurance covers loss or damage to the third party during the accident.
The air transport sector is also not a risk-free sector. There is a risk of various types of damage and loss while operating the aircraft. For example, a plane crash or a collision. The passengers, luggage and crew members of the aircraft can also suffer the damage. Similarly, a plane crash can cause damage to other people’s property and human life and there is an obligation to pay compensation. The insurance that is done to compensate for the damage to the aircraft or damage caused by the aircraft is called aviation insurance.
While transporting goods from one place to another, routes such as road, rail, air or sea is used. When moving the goods using these different routes, there is a chance of damage of the goods. In order to protect against such risk, the insurance that done is called marine insurance. It covers the loss or damage of ships, cargo, terminals, and any transport by which property is transferred, acquired, or held between the points of origin and final destination. It covers transit by any modes of transit like, sea transit, inland waterways, land transit by road/rail vehicle and transit by air. The scope of cover depends upon the type of clauses attached with the policy. Mainly these clauses can be grouped under two categories:
Institute Cargo Clauses (I.C.C.)
Inland Transit Clauses (I.T.C.)
Engineering And Contractor’s Risk Insurance
Engineering and contractor’s risk insurance relates to loss or damage to the insured property due to risks during engineering activities, planning, designing, erection/construction, testing, commissioning , operation and maintenance. In other words, this insurance is intended to cover accidental loss or damage to civil engineering works, e.g. erection of building, road or railway construction, irrigation, bridge construction and other infrastructural designs including third party liability.
Miscellaneous insurance includes all other insurance not covered under the above insurance policies. It covers loss or damage against Burglary & House – Breaking, Cash in Transit, Banker’s Indemnity, Group cum Family Hospitalization, International Travelers Medi-claim, Health Insurance etc.
Related Related Contents: