Personal lines insurance
refers to the many different policies designed to protect individuals and
families. It is a term meant to distinguish personal policies from business, or commercial lines policies. A
line of insurance means a certain category of insurance policies. Personal
lines insurance agents typically offer car, home, health and life insurance to
individuals and families. It is important to purchase the correct type of
policy to have the proper protection and avoid claim exclusions.
Car Insurance
o Personal car insurance protects vehicles used
for personal use, including driving to and from work. If a vehicle is used for
business purposes, such as for making deliveries or hauling construction
material on work sites, then it requires a business auto policy.
Home Insurance
o Personal home insurance is intended to protect a
house that is used as a primary or secondary residence of the owners. Rental
properties should be covered by business properties. Also, if you are running a
business out of your house, that business should have business insurance or an
additional business endorsement on your home insurance policy. Business
ventures are typically excluded on personal lines insurance unless specifically
endorsed.
Life Insurance
o Life insurance is
a contract between an individual and an insurance
company that pays a specified amount if the individual passes away during the
set policy term. Personal life insurance is intended to help pay off debts,
supplement lost income and fund an inheritance when and individual passes away.
Health and Disability Insurance
o Individual health and disability insurance is
bought by an individual to help pay for their medical costs and supplement lost
income if he gets injured or sick. Group health and disability insurance is
purchased by a company or large purchasing group to cover the individuals in
that group. Health insurance pays for medical costs and disability insurance
pays for lost income by becoming sick or injured.
Miscellaneous Personal Insurance
o Other lines of personal insurance include boat,
all-terrain vehicle, motorcycle, snowmobile and multiple other types of personal insurance policies.
The key to understanding if a policy is a personal insurance policy is how the
object being insured is used. If it is for personal
use, then it should be insured by a personal line of insurance. If you use
something for business purposes then you should purchase a business insurance
policy or speak with your insurance agent to find the correct policy or
endorsement. If you purchase the incorrect type of policy then you might be
exposed to exclusions and gaps in coverage.
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