When you need to be safeguarded from a loss you cannot cover on your own, personal lines insurance comes into play. While you may not hear of personal lines insurance every day, odds are, you’re already a policyholder of many insurance types that fall under the umbrella of personal lines insurance. Personal lines insurance is purely the term used to discern personal insurance from their commercial and business equivalents. Commercial lines insurance includes auto, liability, homeowners, liability, and personal property policies.
Think of personal lines insurance as your respective safety net. It allows you to go about your ordinary life without the anxiety of jeopardizing monetary collapse. Whether it is owning a home or driving a car, personal lines insurance allows for every individual to have the coverage they need to be protected. Personal lines do not apply to businesses or commercial undertakings, yet this insurance type makes up a massive fraction of the integrated insurance field.
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What Types Of Insurance Are Considered Personal Lines?
Any private policy that shields an individual person or home falls under the category of personal lines insurance. As an individual, your comprehensive risks are lower than a business or commercial enterprise, which is why personal lines are “person” centric. Personal lines incorporate policies such as homeowners insurance, earthquake insurance, automobile insurance, renters insurance, life insurance, umbrella insurance, health insurance, and disability insurance.
The goal of personal line commodities is to protect individuals against the horrific fiscal losses that can quickly accrue in the event of an accident, trial, ailment, blaze, or natural disaster. In other words, they help to account for some of the “what ifs” in life. While personal lines insurance cannot protect you from every event life throws your way, it can reduce your overall liability for damages and out of pocket expenses.
Who Is Eligible?
For the most part, anyone can acquire a personal lines insurance policy. As long as you meet certain qualifications and can pay the monthly premium, you can be ceded insurance. However, some individuals may not be qualified to purchase a policy for a particular reason because they are felt to be too much of a risk by the insurance company. For example, if you’re a driver who has secured copious DUI infractions, you’re not going to be granted auto insurance by many providers.
Similarly, if you’re someone with a past history of cancer or are living with a current diagnosis, you will not be able to purchase life insurance. Another example of a high-risk individual would be someone attempting to buy flood insurance and their dwelling is located in a stipulated flood plain. The risk has to be apparent in order for the insurance company to say “no.” Of course, even with these events in mind, some insurers will still grant coverage, you will just have to pay well above the median premium amount to satisfy the added monetary risks you bring to the table.
Is Personally Lines Insurance Legally Required?
Yes and no. It depends on the type of personal lines insurance at play. For example, auto insurance is legally required in most states in order for you to drive. Most require you to keep at least minimum coverage before you can hit the road. Failure to insure your car could result in hefty fines if pulled over, not to mention high costs should you be in an accident. Similarly, most mortgage companies will not grant you a home loan if you do not have homeowners insurance coverage on the property. Other types of personal line insurance are not a legal requirement. For example, you are not legally required to carry life insurance or to purchase separate personal property coverage on your belongings.