What is Insurance ? What is Car Insurance ? How To Claim Insurance in Easy way ?

 What is Insurance ?

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Insurance is a legal agreement between two parties i.e. insurance company (insurer) and person (insured). In this, the insurance company promises to compensate the insured person for the loss in case of an insured contingency. Contingency is an event that causes a loss. It can be the death of the policyholder or damage/destruction of property. It is called contingency because there is uncertainty about the occurrence of the event. The insured pays the premium in return for the promise made by the insurer

What are the benefits of insurance?

Insurance is an important financial tool. It can help you live life with fewer worries, knowing that you will get financial support after a disaster or accident, which will help you recover faster. When it comes to life insurance, it can mean that your family won't have to move out of the house or your kids can afford to go to college. For auto insurance, this can mean that you have extra cash to help pay for a repair or replacement vehicle after an accident. Insurance can help keep your life on track for as long as possible, long after something bad happens.

Your independent insurance agent is a great resource for learning more about the benefits of insurance as well as the benefits of your specific insurance policy. For example, you may have access to perks such as free roadside assistance, risk control counseling for businesses or the cash value in a life insurance policy, in addition to your insurance coverage.

And in some cases, such as auto insurance and workers' compensation, you may be required by law to be insured to protect others.

How Does Insurance Works ?

The concept of insurance works on the basis of 'risk pooling'. When you buy any type of insurance policy from an insurance company for a specified period with specific cover, you will make regular payments (referred to as premium) for the policy. Similarly, the insurance company collects premiums from all its customers (referred to as the insured) and pools the money collected to pay for damages resulting from an insured event. If the insured event happens, and you make a claim, the loss will be reimbursed by the insurance company from the policyholder's pool of premiums. If you do not claim during the specified policy term, no benefit will be paid to you. However, today a variety of products are offered by insurance companies that also include a savings element.

Type of insurance

There are many different types of insurance available, but the most common types are described below.

Health insurance: Health insurance helps cover your medical bills, doctor's costs and prescription drug costs when you seek medical care. Once you receive coverage, your insurer agrees to cover part of your medical costs, usually after your deductible, then as a percentage or a specific dollar amount until Do not exceed the out-of-pocket maximum. After you pay this amount, the insurer pays your remaining covered costs for the rest of the year.

Life insurance: Life insurance promises to pay your survivors -- the named beneficiaries on your life insurance policy -- an amount paid out when you die. Life insurance policies do not have deductibles or co-insurance.

Homeowners Insurance: Homeowners insurance covers your physical residence, personal property and other structures against loss or damage caused by various perils. You are also safe if someone gets injured on your property. Unlike health insurance, you pay a deductible each time you file a claim.

Auto Insurance: Auto insurance is a way to protect you and your car in case an accident occurs. It provides coverage for liability (both bodily injury and property damage liability), medical payments and collision. In most states, it is illegal to drive without auto insurance. Like homeowners insurance, you are responsible for paying the deductible each time you file a claim.

Business Insurance: Business insurance is an umbrella term for a collection of policies that protect your business from financial losses resulting from property damage, accidents, and professional errors, among other situations.

Following are some examples that demonstrate the importance of insurance:

case 1:

Mukesh, a software engineer living in Bangalore, meets with an accident and dies on the spot, leaving his wife and son in deep emotional shock. He was only 40 years old! He also has a home loan of INR. 30 lakhs is going on. Fortunately, Mukesh has taken a term insurance cover of INR. 1 crore at the age of 32 years for 25 years of the policy term. His wife got compensation from the insurance company within 10 days which helped her to repay the loan and invest the corpus for future needs. Had he not taken the wise decision of investing in life insurance, his family would have been in a huge financial crisis today! Insurance is important to secure the future of your family.

Case 2:

Ravi, an employee of a multinational company in Mumbai, suddenly fainted due to high fever. Thereafter he was taken to the nearest hospital. He was hospitalized for 3 days for diagnosis and treatment. When he was discharged after 3 days, his hospital bill became approx INR. 70,000 Luckily, he had taken out health insurance coverage for INR. 3, 00,000. Since the hospital was empaneled with its insurer's network hospitals, the bills were paid directly to the hospital. Had he not known the importance of insurance, he would have had to pay Rs 70,000 out of his own pocket. Insurance helps you achieve financial stability during unforeseen events.

• What is Car Insurance ?

Definition: More popularly known as motor insurance, this type of insurance provides cover for loss or damage to any vehicle such as a car, two wheeler or commercial vehicle, etc. Description: This insurance helps in reducing monetary loss due to accidents involving damage to vehicles.

Car insurance is a contract between a car owner and a general insurance company in which the latter promises to protect the car owner from financial loss that may occur due to an unfortunate event involving his car. Based on the scope of coverage, there are 3 types of car insurance policies – third-party car insurance, standalone own-damage (OD) car insurance, and comprehensive car insurance. To continue to receive the benefits of these policies, the car insurance renewal must be processed in time by the policyholders

After how much time can you file a claim after the accident?

Car accidents can be stressful, from a minor fender bender to a more serious accident in which one or more people are injured. Knowing in advance what to do after an accident can improve the outcome for everyone involved.

After an accident, you should contact your insurance company as soon as possible. Immediately call your insurance representative or the company's claims hotline to report the incident and begin filing a claim. Insurance contracts vary widely, so read your policy specifics or ask your representative to help you understand reporting requirements to make the claims process easier.

Learn more about when to file a claim after an accident, factors affecting insurance timelines and the claim filing process

Different policies and states may have specific time limits for filing a claim. For example, if you are injured in a car accident in New York, you must file a claim without fault within 30 days of the accident.1

Generally, it is in your best interest to file an insurance claim as early as possible so that you can remember as many details of the accident as clearly.

Key Takeaways

1. You should call your insurance agent or the company's claims hotline to file a claim as soon as possible after the accident.
2. Insurance contracts vary, so be sure to read the fine print of your policy so that you understand the reporting and filing requirements.
3. Collect names, contact information and insurance information from everyone involved in the accident, and take photographs of the damage and the scene.
4. If another driver is at fault for the accident, you can file a claim with either your own insurance provider (if you carry the required coverage) or the other driver's insurance company.

• Comprehensive car insurance

A comprehensive car insurance policy is the most comprehensive car insurance cover whereby an insurance company is liable to pay for financial liabilities to a third party as well as damages caused to itself by the insured's car. Apart from road accidents, the policy is applicable in case of natural calamities, man-made calamities, self-ignition or lightning, explosion, fire, theft, etc. 

• Third party car insurance 

Third party car insurance policy is a mandatory requirement for driving a car in India. This is the most basic car insurance plan and thus it is also called simply liability car insurance policy. Under this cover, the insurance company is liable to pay for bodily injuries, permanent disability, temporary disability as well as death of third parties due to the accident caused by the car of the insured. The plan also provides coverage for property damage caused by third parties up to Rs. 7.5 lakhs.

• own damage car insurance

In September 2019, Insurance Regulatory and Development Authority of India (IRDAI) introduced standalone own-damage car insurance policy. Under this plan, the insured gets insurance coverage only for his own loss caused by his four wheeler in road accident, natural/man-made calamity, fire, explosion, theft or any other accident. The purpose of a standalone own-damage car insurance policy is to provide the insured with flexibility in terms of the insurance provider they choose to choose.