Types & Definitions of General Insurance
General insurance refers to all types of insurance other than life insurance. Often called property and casualty insurance, general insurance pays for loss or damages to physical property, and for loss or injury to another party. The policy will specify the perils insured against, limits of insurance and deductible. General insurance divides into personal lines, for individuals, and commercial lines, for business owners.
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Homeowners Insurance
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Typically written as a package policy, homeowners insurance pays for losses to the owner's home and personal belongings, and for the owner's personal liability. Typical perils insured against include lightning, fire, hail, wind, explosion, weight of ice and snow, theft and vandalism. Homeowners may add separate clauses for earthquakes, and must purchase a separate policy for flood insurance. The owner must insure the home for its full replacement value, except in the case of very old or derelict homes, which may be insured for actual cash value only.
Personal liability covers injury or loss to another party while on the owner's property. For example, if a visitor slips on ice that the owner did not clear, or the owner's dog bites someone, the policy will pay for medical treatment. Homeowners insurance policies often exclude certain dog breeds, swimming pools and trampolines.
Flood Insurance
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Flood insurance covers losses to the owner's home and contents for damage caused by flood and mudslide. The flood zone in which the home is located determines rates.
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Auto Insurance
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Auto insurance, also written as a package, covers the owner's liability for bodily injury or property damage to another party that arises from an incident caused by a driver on the policy. The policy can also pay for collision and comprehensive damage to the owner's own vehicles, injury to the owner or another driver on his policy, towing or other emergency roadside service, and reimbursement for rental vehicles when required as the result of a loss insured against in the policy.
Other Personal Lines
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You can also buy specialized insurance policies for motorcycles, watercraft, motor homes, all-terrain vehicles and snowmobiles.
Business Owners Personal Property
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Similar to a homeowners policy, a business owners personal property policy includes coverage for buildings and fixtures, as well as business property (including inventory), and business liability for damages the owner caused that result in bodily injury, property damage, or personal and advertising injury.
Commercial General Liability
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Commercial general liability covers a business owner for damage or injury that occur during the operation of the business. Hundreds of business and trade classifications determine insurance premium rates for all the types of businesses that exist.
Inland Marine
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Inland marine insurance pays for loss or damages to portable property, other than vehicles, owned by a business. Items covered vary with the type of businesses.
Other Commercial Lines
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Other types of commercial insurance include professional liability, errors and omissions, and workers' compensation.
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References
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