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The Insurance Product

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Things that affect rates and profits of a company.

  1. Marketing
  2. Underwriting Guidelines
  3. Ratemaking

Private LOBs

Personal Auto Insurance 📋

Coverage (Abbreviation) Covers Whom/What? For What Reason? Key Identifier
Bodily Injury Liability (BI) Others Injuries you cause (medical, wages). You are at fault. (Liability)
Property Damage Liability (PD) Others' Property Damage you cause (their car, a fence). You are at fault. (Liability)
Personal Injury Protection (PIP) You & Passengers Your group's medical expenses. No-Fault; covers your injuries regardless of fault.
Medical Payments (MedPay) You & Passengers Your group's medical expenses. Similar to PIP, often in states without it.
Collision Your Vehicle Damage from hitting another object or car. Crash-related damage to your car.
Comprehensive (Comp) Your Vehicle Theft or non-collision damage. "Other than collision" (fire, hail, vandalism).
Uninsured Motorist (UM) You & Passengers Your group's injuries/damages. At-fault driver has NO insurance.
Underinsured Motorist (UIM) You & Passengers Your group's injuries/damages. At-fault driver has NOT ENOUGH insurance.

Homeowners Insurance 🏠

Coverage What Does It Cover? Key Identifier Good to Know
Dwelling The house/building structure itself. "The House" The main coverage for homeowners; others are often a % of this amount. Not on renters policies.
Other Structures Separate structures like sheds, detached garages. "Not Attached to the House" Usually covered for about 10% of the Dwelling amount.
Personal Property Contents inside your home (furniture, clothes, etc.). "Your Stuff" The primary coverage on a Renters policy. High-value items may have sublimits.
Additional Living Expense Costs if your home is uninhabitable (hotel, meals). "Can't Live at Home" Kicks in after a covered loss to maintain your standard of living.
Personal Liability Bodily injury or property damage to others. "You Are At Fault" Covers you if you're legally responsible (e.g., a visitor slips and falls, your dog bites someone).
Medical Expense Medical bills for others injured on your property. "Regardless of Fault" Often called "goodwill coverage" for minor injuries to prevent lawsuits. Limits are very low.
#### Key Concepts to Remember
  • Peril: The cause of the loss (e.g., fire, wind, theft).
    • Named Peril: Only covers perils specifically listed in the policy.
    • Open Peril: Covers all perils unless they are specifically excluded.
  • Valuation: How your property's value is calculated.
    • Replacement Cost (RC): Cost to replace with a brand new item of similar kind and quality.
    • Actual Cash Value (ACV): Replacement cost minus depreciation.
  • Excluded Perils: Common exclusions are flood and earthquake, which require a separate policy.

Commercial LOBs

Commercial Auto 🚚

This is straightforward: Commercial Auto insurance provides the same core coverages as a Personal Auto policy (Bodily Injury, Property Damage, Collision, etc.), but for vehicles used for business purposes.

  • The main differences are that commercial policies often have higher liability limits and must account for risks like unlisted drivers or vehicles.

Commercial Property 🏢

This is the business equivalent of Homeowners property coverage.

Coverage What Does It Cover? Personal Lines Analogy
Building The physical building the business owns. Like Dwelling coverage.
Business Personal Property (BPP) The business's contents (equipment, inventory, furniture). Like Personal Property coverage.
Business Interruption Lost income and profits if the business must shut down. Like Additional Living Expense, but for profits.

Commercial General Liability (CGL) ⚖️

This protects the business when it's held liable for injury or damage. The key is to remember where and when the incident occurs.

Coverage What Does It Cover? Key Identifier (When & Where?)
Premises/Operations Injury/damage on business property or during ongoing work. Here & Now (e.g., a customer slips and falls in your store).
Products/Completed Operations Injury/damage caused by your product or finished work after it has left your control. There & Later (e.g., food from your restaurant makes someone sick).

Professional Liability 🧑‍⚖️

This insurance covers damages caused by a professional's negligence or failure to perform their professional duties. Unlike General Liability which often focuses on physical harm, this covers financial and other non-physical losses.

Common Name Who It's For What It Covers Simple Example
Medical Malpractice Medical Professionals Harm to a patient due to medical error or negligence. A surgeon leaves a tool inside a patient.
Errors & Omissions (E&O) Non-Medical Professionals (agents, lawyers, accountants, consultants) Financial loss to a client due to a mistake or failure to act. An architect's design flaw leads to costly structural problems in a new building.

Workers’ Compensation 🧑‍🔧

Workers' Compensation is a no-fault system that provides benefits to employees for work-related injuries or illnesses. In exchange, employees generally cannot sue their employers for those injuries. The policy is split into two distinct parts.

Section Coverage Name What It Covers Key Feature
Section I Workers' Compensation Medical bills and lost wages (indemnity) for injured employees. Benefits for the employee. This is a no-fault, legally required coverage with no policy limit.
Section II Employer's Liability Lawsuits against the employer for work-related injuries in rare situations not covered by Section I. Protection for the employer. This covers legal liability and has policy limits.