How Many Types of Insurance Are There in India?

Insurance law is a collection of laws and regulations that relate to insurance. Insurance is a contract between two parties. (the insurer and the insured). In exchange for a charge known as a “premium,” it shifts the risk of loss to the other party to the contract.

Health Insurance – 

It is that type of insurance that covers medical expenses that arise due to any illness.

Purchasing a health insurance policy for your family is critical due to the high cost of medical care, particularly in the private sector. Hospitalization might drain your bank account and throw your finances off track. This can be avoided by just paying a little annual premium.

A good health insurance policy covers all the expenses, including consultation fees, costs towards medical tests, hospitalization charges and even post-hospitalization recovery costs.

Auto Insurance – 

Auto insurance is commonly known as Motor insurance. This type of insurance covers the damages arising from accidents caused to any vehicle like a car, commercial vehicle, two-wheeler, etc. In India, motor insurance is mandatory.

Nowadays, a car has become more important than a luxury. Most people prefer to travel in ease and comfort of their cars instead of travelling through other forms of transport, So it’s important and even valuable to get your motor vehicle insured.

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Life Insurance 

A contract between the policyholder and the insurance company is defined as life insurance. When the covered person dies, the life insurance company pays a predetermined sum to the insured person’s family. In exchange for the life insurance payout, the insured must just pay the premium.

The life insurance proves to be beneficial as the deceased’s family will be provided with guaranteed income every month, and they will remain financially stable afterwards.

Fire Insurance 

One such policy is which an individual agrees to pay a certain sum of money to the insurer in exchange for benefits for the fire losses. A fire insurance policy gives financial security for home, furniture, shares and other business assets.

In some circumstances, it provides death benefits to the employee if they are killed in a fire.

Marine Insurance

This insurance policy provides coverage against any damage or loss caused to cargo vessels, ships, terminals, etc.

Marine cargo insurance is necessary for all the ship owners who use it for commercial/transportation purposes.

Umbrella Insurance

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It is a policy that provides excess limits and gives additional excess coverage over the normal limits and coverage of liability policies.

An umbrella policy fills the gaps left by standard primary policies.

Liability Insurance

This policy protects individuals and businesses from legal payouts that the policyholder is liable to pay or issued for.

It means if the policyholder is liable for any third-party loss or damage, then the insurer will indemnify the damage incurred.

Travel Insurance

This type of insurance covers risks and financial losses, be it medical expenses, lost luggage or trip cancellation expenses. It covers all expenses whether you are travelling within the country or overseas.

Renter’s Insurance

It is also known as tenant’s insurance. This type of insurance benefits the homeowner’s insurance, but it doesn’t include dwelling or minor alterations that a tenant makes to the structure.

The renter’s insurance protects against losses of your personal property, including clothes, jewellery, luggage, computers, etc.

Disability Insurance

This type of insurance pays disability benefit as a partial replacement of income lost due to illness or injury.

Long-term disability insurance pays out monthly income payments for the duration of the insured’s disability.

Note: This article covers 10 most used Insurance in India. There are other types of insurance too based on region.

Edited by

Rajat Rajan Singh

Editor-in Chief at Law Trend

Advocate-Allahabad High Court at Lucknow

Written by Aditi Batra – Intern

Law Trend
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