What is Personal Lines Insurance?
Everything you need to know about Personal Lines Insurance.
It is always stressed that life insurance is an important asset to have. It helps you when everything seems helpless. Either in your old age or even after that when your family is struggling to pay for your funeral.
There are many types of insurance policies. One of them is Personal Lines Insurance.
What does Personal Lines Insurance mean?
Personal Lines Insurance protects individuals from any kind of financial loss resulting from death, loss of property or injury. These types of insurance policies are generally for people and their families who would not have been otherwise able to cover all their expenses resulting from a loss.
What is included in Personal Lines Insurance?
Personal lines insurance includes a line of products such as Renters insurance, auto insurance, disability insurance, umbrella insurance, earthquake insurance, flood insurance, homeowners insurance etc. Some insurances like the automobile liability insurance is required by law.
Talking about how much personal lines can cover depends entirely on you. You can determine the amount of coverage you get according to the premiums you can afford to pay. The higher the premiums, the more the coverage.
Of course personal lines insurance will not cover every loss you might face. Then why would you want to purchase it? Because personal lines can dramatically reduce the liability for damage and help you pay off in an unfortunate situation that would otherwise require you to pay out of your own pocket. And losses like death, injury, property, repairs etc, can require hefty amounts which personal lines will help you with.
However, just like with every other insurance policy, the greater risk you are, the more in premiums you would have to pay. For example, if you have a history of cancer, you might not be able to purchase life insurance since you are seen as a high risk individual and insurance companies will choose not to put themselves in such a risky situation. If they do, they will demand high premiums to compensate for the high risk. Another example includes an individual with a homeowners policy wanting to buy flood insurance. Insurance companies would not want to issue flood insurance to someone who does not live near a flood zone.
Types of Personal Lines Insurance
Personal lines insurance provides many types of coverage, some of which we will explore below:
- Watercraft insurance.
This is a type of insurance that provides coverage for boats and personal watercrafts. Coverage includes damages for towing or wreckage removal.
This insurance policy covers any and all damage to an individual’s homes or assets in the home. It also provides liability coverage for any accidents either inside your home or on the property. Even if someone else is involved in the accident. It typically covers four types of incidents on the property: interior damage, exterior damage, damage of personal belongings and injuries arising while being on the property.
It covers any risk to a traveler. It usually applies to medical care, lost baggage, loss or theft of money or personal property.
Flood insurance covers places of residence from any kind of water damage which is generally caused by flooding. It is a clause purchased usually with homeowners insurance for places with a high flood risk.
This is an insurance policy for people who are at risk of being sued for other people’s damages or injuries in an accident. For example, you are in a car accident which is your fault. This policy will protect you from paying damages and will take care of that for you.
- Earthquake insurance.
This policy provides coverage for the loss or damage to your place of residence or personal property due to an earthquake. It usually only focuses on putting a roof back over your head rather than covering for all the losses.
It’s more or less a source of income paid to any worker who is not able to work due to an injury, disease or disability. You would have to be disabled for a specific period of time before you can receive disability payments.
Life insurance basically replaces your income for your dependents after you pass away. It provides your family with some financial support to bear with the funeral expenses and carry on after your death.
- Automobile insurance.
Vehicle owners purchase this insurance so they can cover any costs that they may have to cover in case of an accident or damages to the vehicle.
- Renters insurance.
This insurance is for people renting an apartment, house or any sort of property. It is a good way to protect your belongings and stay protected from injuries anyone else might sustain while on your property.
Personal Lines Insurance vs. Commercial Lines Insurance
Personal lines insurance and commercial lines insurance is exactly what it sounds like. While personal lines insurance covers losses to an individual, commercial lines insurance provides coverage for losses incurred by businesses and other enterprises.
Commercial lines insurance helps protect businesses from losses they might not be able to cover on their own. This not only covers large businesses but also protects small at-risk businesses that need help to survive. Some types of commercial lines insurance includes commercial property insurance, commercial auto insurance, casualty insurance and medical malpractice insurance.
Since needs of a business or corporations are much more complex than needs of an individual, it is sometimes difficult to assess what kind of coverage they need to buy. For example, businesses run by employees and customers who may drive. A business’ liability will depend on the employees’ or customers’ driving habits.
And that is what a personal line insurance is and what a commercial lines insurance is. For an individual, a personal lines insurance coverage provides them with everything they need, from homeowners insurance to auto insurance to life insurance. Hence buying personal lines insurance takes care of everything for an individual. All that is left to do then is figure out what kind of coverage will be best for you. To determine that, you need to check your finances to see what is affordable for you. Once you have figured that out, you are all set for personal lines insurance coverage.