Classes of General Insurance

Insurance coverage can compensate people and businesses in the event of lost or damaged property, personal injury or death. General insurance classes refer to the policies available that offer specific types of coverage. Before purchasing any type of insurance, investigate the insurance company’s financial stability, complaint record and customer service record. Make sure that the insurance company is covered by your state’s guaranty fund which pays claims if the insurance company defaults.

Property Insurance

One class of general insurance is insurance of property. Property insurance covers tangible assets or material possessions. Property insurance coverage can protect real estate, automobiles, boats, jewelry, money and other physical assets in case of fire, theft, flood and other specified risks. Certain types of property insurance are mandatory, such as homeowner's insurance in conjunction with a mortgage or car insurance in conjunction with a car registration. All classes of insurance require that a person or business have an insurable interest in the subject at the time the insurance policy is issued. Property insurance policies also require that the insured have an insurable interest and at the time a loss occurs. For example, you can’t claim a loss on property that has been sold, even if coverage for the item is still listed on your property insurance policy.

Personal Insurance

Insurance of person is a general class of insurance that covers risks associated with human life and health. A life insurance policy pays the insured’s beneficiary upon his death; health insurance covers a person’s expenses, or portion thereof, as related to illness or an accident. As of 2010, all types of personal insurance coverage are voluntary. Individuals have insurable interest in their own life and health insurance, as well as those of their spouses and their dependents. Life insurance policies only require that insurable interest exists at the time of purchase, not at the time of loss. For instance, you can collect on a life insurance policy purchased for a spouse from whom you subsequently become divorced.

Liability Insurance

One general class of insurance most often included as part of an individual’s personal or property insurance coverage is insurance of liability. Liability insurance protects against consequences as a result of an action. For example, liability insurance as part of vehicle coverage compensates entities other than the insured that are affected by an automobile accident caused by the insured. Liability insurance coverage is often a separate policy for businesses. Business liability insurance can be mandatory, based on the classification, registration and organization of the business.