Personal insurance policies usually contain multiple, built-in coverages. The policies use these pre-packaged coverages to keep you safe from a breadth of common claims. Below are some personal insurance policies and a description of the coverages each contains:
Your homeowner’s policy will protect you from many types of lawsuits arising both from homeownership and while away from home—however, it does not protect you from liability incurred while operating a vehicle. It also protects your home from harm, either reimbursing you for its current value or rebuilding it, depending on the coverage you choose. It also provides basic coverage for your personal belongings and it will pay for extra living expenses should the home become unlivable due to a covered claim.
The Automobile policy always starts out with liability coverage, as each state has specific laws regarding liability insurance. Liability insurance is important for when you cause an accident that results in injuries or property damage to others. It can also cover your car by adding ‘Collision’ insurance and ‘Other Than Collision’ (AKA ‘Comprehensive’) insurance. These coverages pay to fix your car should you crash into something or if the car gets damaged by hail, for example. Also important is the ‘Uninsured and Under-Insured Motorists Coverage’. Often denoted as UM/UIM, it covers your medical bills should you be involved in a hit-and-run accident, if the at-fault driver doesn’t have insurance, or if the at-fault driver doesn’t have enough liability insurance to reimburse you.
American has become a highly litigious society, so having extra liability limits is becoming a necessity rather than a luxury. An Umbrella policy will provide an extra layer of liability coverage over your other liability coverages, such as your Automobile and Homeowner’s policies. Provided in million-dollar increments, you can have multiple-millions of dollars in extra protection, ensuring your financial safety should something go awry.
A common misunderstanding is that renters will be reimbursed by the landlord’s insurance, but that's simply not true—that’s why there is a Renter’s policy. It will cover your personal belongings and will pay for extra living expenses should your apartment become uninhabitable due to a covered claim (E.g. a fire). It also comes with similar liability coverage that a Homeowner’s policy has. So if someone slips and falls in your apartment or if you damage someone else’s property, your Renter's liability coverage will respond.
The Homeowner’s and Renter’s policies include coverage for your personal items, however, certain categories of property are subject to a ‘Sublimit’. For example, if your limit for personal items is $75,000, you may only have $2,500 of coverage for jewelry you own. So if you had more than $2,500 of jewlery, you would only be reimbursed for $2,500, no matter how much you owned. Similar Sublimits often apply to other categories, such as firearms, precious metal and stones, furs, silverware and china, and cash. To fully insure these types of items, a Valuable Property policy will need to be written or endorsed to your Homeowner’s or Renter’s policy.
Very similar to how the Automobile policy is setup, the Watercraft policy covers your liability arising out of the use or storage of the boat and for physical damage to the boat. And while your Homeowner’s policy might have a small amount of coverage for shorter, low-powered boats, to get proper coverage, you’ll need to get a Watercraft policy.