Risks such as accidents, calamities and medical emergencies can change your life, leaving you with debt and losses.
For example, if a fire damages your home, you must use your savings to rebuild or seek help from friends and family if the house isn’t insured.
Such uncertainties are why you must protect yourself and your property with general insurance. General insurance policies protect you from losses if a risk covered by your policy happens.
What Is General Insurance?
A general insurance cover is any policy that protects against unforeseeable misfortunes. Since these policies are non-life covers, most providers cover you for one year.
Common general insurance covers include:
- Home insurance
- Travel insurance
- Health insurance
- Motor vehicle insurance
Why Do I Need General Insurance?
You can buy insurance for a variety of reasons, including the following:
To Protect Valuables
Some investments in life have a high value, meaning they are expensive to replace if damaged. Such items include your home and your car.
Insuring such assets transfers the cost of replacement to your insurance provider.
To Avoid Liability
General insurance can protect you from financial losses if someone sues you. For example, business owners need general liability and workers’ compensation insurance for protection against personal injury claims by customers or staff.
To Avoid Loses In Case of Uncertain Events
You need insurance to protect your possessions against unpredictable disasters like flooding, fire and storms.
To Cover Events
Some events, like travelling abroad, need special policies, as normal policies do not cover them.
How Do I Choose the Right Insurance Policy to Buy?
While some insurance forms, like workers’ compensation, are mandatory, most policies are voluntary.
The right insurance policy depends on the things you value and the most probable risks in your circumstance.
For example, you may consider buying an insurance policy to protect your roof against damage if you live in a storm-prone area.
What Can I Protect?
You can protect anything if it has a monetary value. You must also have an insurable interest in the asset or property you want to insure.
Thus, you cannot insure a property that you don’t own.
Also, you can only insure yourself against a particular risk if the insurance cost is much lower than the risk’s possible cost.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.
This information does not take into account the objectives, financial situation or needs of any person. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.