Personal Lines Insurance - Introduction and Types

17.01.2019
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Personal Lines Insurance – Introduction and Types

Personal lines insurance covers insurance products related to casualty and property that protect individuals from losses they couldn’t afford to cover on their own. Insurance lines like this make it possible to do things like drive a car and own a home without financial risk.

It includes products such as flood insurance, renters insurance, automobile insurance, homeowners insurance, life insurance, disability insurance, earthquake insurance, umbrella insurance and health insurance. These insurance protect individuals and families against financial losses caused by theft, natural disasters, death, accidents, lawsuits, fire and illness.

Some examples of Personal lines insurance are :-

1) Watercraft Insurance
LOB CODE – BOAT

Watercraft insurance also known as personal watercraft boat insurance is an insurance policy that provides coverage for boats and personal watercraft. It includes wreckage removal and towing. It may be purchased for house boats, and pontoon boats, sailboats and also for other watercraft up to a certain size and value.

Example :
A boat got damaged in an accident while sailing. All the repair cost and towing and wreckage removal will be covered in Watercraft Insurance.
2) Dwelling Fire Insurance
LOB CODE – DFIRE
Dwelling Fire Insurance protects a home against the threat specifically named in the policy. Many common causes of damage, such as hail, fire, and lightning, are listed in a Dwelling Fire Policy. If something other than them causes damage to the home, the policy does not cover the loss.

Example:
An individuals’s house caught fire through short circuit. All the damage done will be covered in the Dwelling Fire Insurance.

3) Homeowners Insurance
LOB CODE – HOME
Homeowners insurance covers losses and damages to an individual’s house and to assets in the home. It also provides liability coverage against accidents in the home or on the property. This insurance policy usually covers four types of incidents on the insured property – exterior damage, interior damage, damage of personal belongings/assets, and injury that arises while on the property.

Example:
An individual’s house got damaged due to sudden pipe burst. This is caused due to leak plumbing thus it comes under homeowners insurance.
4) Travel Insurance
LOB CODE – TRAVEL
Travel insurance covers a wide range of risks to the traveler. This may not be valid in other countries or states. It usually applies to medical care, lost baggage and loss or theft of money, personal property etc. when travelling.

Example:
While travelling we lost our baggage. The loss can be recovered through Travel Insurance.
5) Flood Insurance
LOB CODE – FLOOD
Flood insurance is a type of property insurance that covers a place of residence for losses sustained by water damage, generally caused by flooding. It is different than a basic hazard insurance or homeowners insurance policy, as it only covers losses occur due to flooding.

Example:
The electric appliance got damaged in flood. Flood insurance will cover all the losses.
6) Umbrella Insurance
LOB CODE – PUMBR
It provides a layer of security to those who are at risk for being sued for damages to other individual’s injuries or property caused to others in an accident. It also protects against slander, libel and invasion of privacy. It is very helpful when the insurance owner is sued and the dollar limit of the original policy has been exhausted.

Example:
A car accident for which you are at fault. The damage to the other person’s car will be covered in this policy.
7) Earthquake Insurance
LOB CODE – EQ
Earthquake insurance covers some of the losses and damage to an individual’s home, belongings and other buildings of the property caused by an earthquake. It does not cover all the loss, its main purpose is to put a roof back over your head. It is estimated using the Damage Ratio (DR), a ratio of earthquake damage money amount to the total value of a building.

Example:
A house is damaged by an earthquake and there are cracks in the walls, ceiling or the whole building is destroyed. These all losses will be covered in the Earthquake Insurance.
8) Disability Insurance
LOB CODE – —-
Disability insurance is a source of income to a worker who is unable to work due to sickness or injury. A person must be disabled for a specific time period (elimination period) before that individual can start receiving disability insurance. If that person is able to work before the elimination period is over then he will not receive any benefit.

Example:
A car accident that leads to disability then that individual will receive payments not just for actual expense but also for loss of income.
9) Life Insurance
LOB CODE – —-
Life insurance is to provide the financial support to the dependents after the death of an insured. It is a contract between the insurance policy holder and the insurer where insurer guarantees payment to the names beneficiaries upon the death of the insured.

Example:
An individual who is suffering from health problems then the expenses will be covered in this policy.
10) Automobile Insurance
LOB CODE – AUTOP (Personal) and AUTOB (Commercial)
Vehicle owners purchase this insurance to pay the costs associated with getting into an automobile accident. Instead of paying complete accident costs at one time they pay annually or monthly payments to automobile companies which in future pay for automobile accidents.

Example:
An automobile meets an accident then the repairing cost will be covered in this policy.
11) Renters Insurance
LOB CODE – —-
Renters insurance is for anyone who is renting an apartment, house or anything else. It is an affordable way to cover our belongings and other people’s injuries at our place.

Example:
If someone steals our stuff at rented house then losses will be covered in this policy.

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