Due to the unpredictability of life, one must always be prepared to face surprises, both good and bad. While the pleasant surprises are easier to handle, emergencies can be tough on you and your family without proper contingencies.

Thankfully, insurance companies offer financial assistance in almost all kinds of emergencies, provided you avail such coverage beforehand.

Insurance in India is divided into two parts – life insurance and non-life insurance. These latter policies are classified as general insurance plans, which comprise several different types of coverage.

While not every single individual requires all types of general insurance policies, owning the essential ones is highly recommended. 

A general insurance company is an enterprise, which creates, markets and supports the various non-life insurance types to customers. Policyholders must pay the premium for a general insurance plan to such a company.

In return, these companies offer a financial benefit to these individuals when certain pre-requisite conditions are met.

These conditions differ based on the kind of general insurance policy one chooses. The most common types of general insurance include the following:

• Health insurance
• Motor Insurance (for Car, Bike & Commercial Vehicles)
• Travel insurance
• Insurance for consumer durable products
• Commercial insurance
• Property Insurance (for Home, Shop, Building etc.)
• Agriculture insurance

Each of these general insurance types is necessary for certain situations. Still, not everyone requires each one of them, barring health insurance.

Medical insurance is one of the most important insurance coverage that one should pick, regardless of their age, health condition and other factors.

The Insurance Act of 1938 is the foundational legislation for India's insurance sector, regulating insurance business, company registration, and policyholder protection. The Insurance Regulatory and Development Authority Act, 1999 (IRDA Act) established the IRDAI, the main regulatory body overseeing the sector's regulation, promotion, and orderly growth.

Key Regulations and Amendments

The IRDAI issues regulations for insurers, reinsurers, and intermediaries, such as:

• IRDAI (Registration of Indian Insurance Companies) Regulations: Governs insurance company registration.
• IRDAI (Insurance Brokers) Regulations: Regulates licensing and operations of insurance brokers.
• IRDAI (Re-insurance) Regulations: Governs reinsurance business and foreign reinsurers' operations in India.
• The Insurance (Amendment) Act 2021 increased the foreign direct investment (FDI) limit in Indian insurance companies from 49% to 74%, aiming to attract more foreign investment and enhance sector growth.

Other Relevant Legislation

Contract Act, 1872: Governs the formation and enforcement of contracts, including insurance contracts.

• Life Insurance Corporation Act, 1956: Establishes the Life Insurance Corporation of India (LIC) and governs its operations.
• General Insurance Business (Nationalisation) Act, 1972: Nationalized the general insurance business and established the General Insurance Corporation of India (GIC).
• Marine Insurance Act, 1963: Governs marine insurance contracts.
• Public Liability Insurance Act, 1991: Provides public liability insurance for immediate relief to those affected by accidents involving hazardous substances.
• Regulatory Bodies

The Insurance Regulatory and Development Authority of India (IRDAI) is the primary regulatory body responsible for ensuring compliance, protecting policyholders' interests, and promoting insurance market development. The Securities Appellate Tribunal (SAT) handles appeals against IRDAI orders.

Recent Developments

During the COVID-19 pandemic, the IRDAI issued guidelines to ensure business continuity and protect policyholders, such as extending grace periods for premium payments and expediting COVID-19 claim handling. The IRDAI also promotes digital initiatives to enhance efficiency and accessibility, including e-KYC and digital policy issuance.

Here are the critical updates from the Insurance Regulatory and Development Authority of India (IRDAI) in its new master circular:

• Wider Product Choices and Customisation: New products and extra options would allow for offering more appealing solutions based on the client's requirements.
• Customer Information Sheet (CIS): A clear coverage aspect, what is excluded, warranties, and the policy aspect of claim settlement.
• Document Submission Simplification: Only documents required for the claim settlement in cases where reimbursement mechanism cannot be availed cannot reject the claim based on the missing documents.
• Policy Cancellation: Individuals' sale policies can be terminated at any time, but they are entitled to a proportional refund of the premium for the remaining term; an insurer, on the other hand, can only cancel a policy on the grounds of fraud.
• Claims Settlement Process: Insurers work on schedule on the surveyor's appointment and surveyor's report; the "No Contribution Clause" does not apply to multiple policies; insurers deal with the disposal of salvages.
• Innovative Motor and Home Insurance Options: The new favourable motor insurance policies support the introduction of "Pay as you drive" and "Pay as you go".
• KYC Requirements: New proposals for enhancing the application of mandatory Know Your Customer (KYC) for new health, motor, travel, and house insurance policies from January 1, 2023.
• Commission Payments: Any limit on managerial expenses now replaces the previous provisions that called for the allowance for individual limitations for both life and non-life insurers.
• Product Filing and Pricing: New policy guidelines on how premium income should correspond to claims and risks for better underwriting and services.

These changes are in pursuit of better customer satisfaction, more efficient claims handling and generally, better compliance with governance requirements in the general insurance market.

When choosing a general insurance company, consider these factors:

• Financial Strength: A financially strong insurance company is more likely to meet its obligations, including paying out claims.
• Coverage Options: Look at the policy and compare it with others to be sure you get the particular insurance from the insurer you require.
• Customer Service: To analyse the same, check out the reviews and ratings about the quality of the insurer's customer service.
• Claims Process: One should check the claims settlement ratio and their processing on the efficiency aspect.
• Premium Costs: Compare the various premiums in terms of the amounts and look for better value for the money one is willing to pay.
• Reputation and Reviews: Gather data from customers and their complaints in matters relating to reliability.
• Coverage Options: Look at the policy and compare it with others to be sure you get the particular insurance from the insurer you require.
• Customer Service: To analyse the same, check out the reviews and ratings about the quality of the insurer's customer service.
• Claims Process: One should check the claims settlement ratio and their processing on the efficiency aspect.
• Premium Costs: Compare the various premiums in terms of the amounts and look for better value for the money one is willing to pay.
• Reputation and Reviews: Gather data from customers and their complaints in matters relating to reliability.

Purchasing general insurance from the insurance company directly has various benefits. It often means a lower insurance premium because of the exclusion of intermediaries and the availability of certain perks and deals. Direct insurers always explain details, charge comparatively fewer and hidden charges, and are easily accessible with round-the-clock services. 

They have custom underwriting, quick bog claims, and new solutions. Also, they develop easy-to-use digital solutions and follow the legal requirements regarding fee structures and all-around assistance. In general, when insurers buy directly, they improve costs, understanding and access to make insurance more effective.