In addition, liability insurance covers damage done to other's property, should the insured become legally liable for the damages.
Boiler insurance was originally created to cover loss due to insureds owning a pressure boiler. However, today, boiler insurance is often more aptly renamed equipment insurance.
Equipment insurance will provide coverage for mechanical breakdowns of equipment, including the cost of repairing or replacing the equipment. The equipment can include: air conditioners, hot water heaters, electrical and mechanical boxes, boilers, and even sometimes computers and telephone systems. Common types of damage to equipment include: short circuits, air conditioning failure, and boiler or hot water heater cracking, burning or bulging. Coverage includes repair and replacement costs, as well as costs to expedite repairs as well as damage to other property caused by the equipment breakdown (Ollis, 1997).
Title insurance protects an individual's investment before they make a property purchase.
With real estate traditionally being an individual's most valuable asset, title insurance is one of the most important forms of insurance for personal finance management. Simply put, title insurance guarantees that a title for a piece of property has no other parties who have rights or claims to it, or if there are parties, these will be identified to the buyer, so that they can make their purchase decision accordingly.
Title insurance is a one-time premium for the purchase of the property.
Should a claim be made against the title, the title insurers will pay to defend the title in court, and will bear the cost of settling to maintain the insured's possession of the property ("What is title," 2006).
Homeowners insurance occurs after the purchase of the property. "Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it" ("What is homeowners," n.d.).
This type of policy provides protection against damage to the insured's personal property as well as liability or legal responsibility for injury or property damaged caused by the insured or their family members, including damage done by family pets. Although most disaster damage is covered, there are exceptions. Floods, earthquakes, and damage due to poor maintenance are typically not covered. Although maintenance related problems are the responsibility of the homeowner, additional flood or earthquake policies are available as two separate policies.
As mentioned, flood and earthquake insurance must be purchased as separate insurance policies.
Flood insurance is a specially created policy to cover damage caused by flooding. Federally-backed mortgages for properties located in a high-risk zone are required to care flood insurance. A standard flood policy covers a variety of areas of loss. These include: structural damage, mechanical equipment such as furnace, water heater, and air conditioner, flood debris clean up, and flooring surfaces, such as carpeting and tile. A flood insurance policy can also be purchased that will cover the contents of the home, such as: furniture, jewelry, clothing, collectibles, artwork, etc. ("What is flood," 2007).
Earthquake insurance is also a separate policy to be purchased in addition to standard homeowners insurance.
Unlike most homeowner or tenant policies, earthquake insurance primarily covers major losses. It normally is sold with deductibles equaling 10 to 25% of the structure's policy limit. Recently, the industry trend has been to raise deductibles"("Facts about earthquake," 2004). Separate premiums are charged for: total amount of loss for contents, total amount of loss for structure, and total amount of loss for unattached structures.
A third addition to a standard homeowners policy is fire insurance. Fire insurance covers far more than simply damage by fire to a home. It covers: collapse, explosion, hail, lightning, smoke, vandalism, weight of ice or snow, and windstorm ("Fire insurance," 2007) damage to a property, further protecting an individual's greatest asset.
Travel insurance is becoming increasingly popular and provides many benefits that are often covered by other forms of insurance an individual may already have in place.
Travel insurance can include trip cancellation, trip interruption, accidental death or dismemberment, medical and dental care, transportation to medical facilities, loss of luggage or personal possessions, and protection against the bankruptcy or default of your cruise line or tour operator" (Coffey, 2007). However, as Coffey notes, many homeowners policies provide coverage for theft and other losses away from home. Medical and auto insurance may be valid even if the individual travels outside of the country. and, airlines must reimburse an individual should their bags be lost. Certain credit cards also offer travel insurance benefits. American Express' Platinum Card has not only an accidental death and dismemberment coverage benefit, but also provides insurance for rental car loss or damage.
Credit insurance is an optional insurance that is often offered when an individual applies for a personal or mortgage loan. This type of policy protects the insured in case they are unable to make payments. There are four primary categories of credit insurance. These include credit life insurance, which pays off all or some of an individual's loan, in the case of death. Credit disability insurance makes payments on the loan if the individual becomes to ill or injured to work. Involuntary unemployment insurance, which makes the individual's loan payments if they lose their job due to no fault of their own. and, credit property insurance, which protects the personal property of an individual that secures the loan in the case of theft or accident or natural disaster ("Credit insurance," n.d.).
Personal liability insurance goes beyond the personal liability coverage afforded by standard homeowners or automobile insurance policies.
The umbrella like coverage of personal liability offers a higher level of protection. According to Davis (2007), "Additional costs will vary with insurance companies, but usually average from $200 to $300 a year for additional protection of 1 million dollars. This coverage may insure automobiles, boats, homeowners, and renters insurance. Most insurance companies require basic insurance of $100,000."
Terrorism insurance is the newest form of insurance, and is the result of the September 11th terrorist attacks on the United States. It is an insurance policy designed to provide coverage to individuals who have suffered damages due to a terrorist attack. However, homeowners and auto insurance policies offer the same protection without the red tape. Although terrorism is not specifically referenced in homeowners policies, these policies due provide coverage in the case of explosion, fire and smoke, the likely causes of damage due to a terrorist attack. Automobile insurance too will cover a car that has been damaged or destroyed, if the insured has purchased comprehensive coverage. Even life insurance offers terrorism benefits, as these policies do not exclude acts of terrorism. In addition to other policies providing similar benefits, terrorism insurance has a second downfall in the need for a terrorist attack to be deemed a certified act by the Secretary of the Treasury, before claims will be paid ("Terrorism and insurance," 2004).
All of the above policies can be deemed casualty insurance. Casualty insurance polices are written to provide coverage in case of an unforeseen accident. Casualty insurance policies can also cover damages due to crime and plate glass breakage ("Casualty insurance," 2007).
In the end, there is an insurance policy available to cover almost every facet of an individual's life. From health insurance policies that will protect the individual if they are sick or injured and allow for unique ways to save money to pay for medical expenses, to life insurance policies that can offer the double benefit of providing a tax shelter for an individual's estate, to personal property insurance that can cover an individual's home, automobile, mechanical equipment and even the title of their property before they make the purpose a variety of insurance policies exist. Despite the vast array of policy types, insurance all has one thing in common, the desire to protect the insured and their assets from the unknown and the unexpected.
Without appropriate insurance coverage assets that may have taken a lifetime to build can be gone in a heartbeat. Only through effective use of insurance can an individual not only secure their personal financial future, but also assist in securing the financial future of future generations to come.
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