Life is full of risks. That’s what makes it so interesting and exciting. But some unexpected events can really set you back.


General insurance is a term used to describe all types of insurance, other than life insurance.

One, most likely, will need some form of general insurance at some time in one’s life.

General insurance helps us protect ourselves and the things we value, such as our homes, our cars, our health, our business and our other valuables, from the financial impact of risks, big and small – from fire, cyclones, flood, to theft, car accidents, travel mishaps – and even from the costs of legal action against us.

Therefore, it is often wise to purchase the protection against possible financial loss.  And we can choose the types of risks we wish to cover by choosing the right kind of policy with the features we need.

However, it is also a legal requirement in some instances.

The most common type of insurance, which is a requirement by law, is liability to third parties and third-party property damage, in respect of a motor vehicle.

Another common area of general insurance, where you may have to purchase the cover, is household insurance. If you have a mortgage, the loan company, in most cases, will require that you purchase adequate household insurance in the terms of your contract.

There are some types of insurance, which are not required by law, but are highly recommended. The best example of this is health insurance. Nothing is more important than your health, but medical bills can add up quickly, especially if you suffer a serious injury or illness.

In general, insurance works by spreading the cost of unexpected risks among a large number of people who share similar risks.

When you take out an insurance policy, you pay a monthly or annual premium. That money joins the premiums of many thousands of other policyholders and goes into a big pool of funds.

With any luck, you will never need to draw on that pool. But if you happen to be one of the unlucky ones affected by an unexpected calamity, perhaps through severe weather or accident, that pool of funds can be used to help you up to the limit you have selected in your policy.

If things go wrong, your insurer may either repair or replace the items that have been lost or damaged, depending on the terms of your policy. You may also have the choice of receiving a cash settlement for the amount of money agreed in your policy.