Saturday, June 2, 2018

Everything You Need to Know Before Buying General Insurance

The term general insurance refers to the different insurance contracts that do not fall under life insurance. They include; motor insurance, two-wheeler insurance, and fire insurance just to mention a few. It covers the tangible assets that are prone to damages and should be insured to protect their economic value.

Therefore, general insurance products are designed to offer protection against unprecedented contingencies like loss or damage of assets. However, just like life insurance covers, general insurance covers attract premium charges that are paid monthly or as agreed with your insurance provider.

Ways to Calculate Premium for a General Insurance

In order to determine the premium amount you are required to pay, your insurance provider must determine your insurance policy’s value. Hence, the lower the policy’s value and risk, the lower the premium rates. 

Insurance premium rates differ from one insurance company to another. That is why experts recommend shopping around before choosing to work with one general insurance provider.

The amount of insurance premium charged by insurance companies is determined by the industry statistics and mathematical calculations done by insurance underwriters. Therefore, the premium quotes you get from sites like may differ slightly from the actual premiums to be charged. 

A customer’s statistical data like age, health, and life history all determine the amount of premium to be charged. This is because all prospective insurance customers go through the insurance underwriting process to determine their risk level.

The insurance underwriting process entails investigating genetic family diseases, and analysis of motor vehicle and medical information records. Once all the statistics are gathered, the information is analysed by an actuary, who predicts the likelihood that you will make a claim on the general insurance policy you buy. 
The higher the probability that you will make a claim, the higher the premium to be charged.

Other factors that are used to determine the premium amount to be charged include; the general insurance cover you choose, additional policy benefits, previous incident or claim history, eligible discounts, how you prefer to pay your premiums (annually, monthly, or quarterly), applicable government taxes and levies, and how much cover you require.

Note that calculating the correct insurance premium is complex because insurance companies must balance between the capability of the customer to make regular payments, likelihood that the insured risk may arise, and their ability to cover the costs of the claim.

Find the Best Offers on General Insurance Online

The best general insurance offer is one that covers all your insurance needs and charges a reasonable premium amount that you can afford without straining. The cheapest insurance offer is not always the best. So, how do you find the best general insurance offers online?

1. Online insurance comparison sites

Online insurance comparison sites like offer detailed explanations about different insurance providers in the market. They explain the different general policies, their features, and pros and cons. 

Additionally, they offer reliable general insurance quotes for different companies as per your requirements to compare and pick the most suitable insurance coverage

With such information, you are able to access and determine the insurance provider who offers an all-inclusive cover that caters to your needs at a reasonable price.

2. Go through insurance company websites

Almost all general insurance providers have active online presence. Therefore, a search through their websites will not only give you information about their different policies, but you will also find previous customer reviews. 

Customer reviews state whether the insurance provider pays claims on time as per the agreed terms. They also define how inclusive the insurance policies are, whether they have additional benefits, and at what cost.

Last Thoughts

General insurance is broad. Hence, there is a lot to learn about it and its premium calculation methods. The best way to understand if a general insurance cover works in your favour or not is by conducting a specific research. 

For instance, if you want a motor insurance cover, research about the best motor insurance providers, their average premium charges, and claims payment procedures.

Apart from getting premium quotes online, narrow down to three insurance providers and request for actual premium quotes. Though online resources are reliable, it is always advisable to seek clarification from insurance providers before making your decision.

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