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8.0 Miscellaneous Personal Lines Coverage

Learning Objectives​

After completing this chapter, you should be able to:

  1. Define Personal Inland Marine insurance and explain its purpose in protecting certain types of personal property.
  2. Recall how property and liability coverage may be provided for mobile homes.
  3. Explain the types of insurance available to protect against perils that are commonly excluded under standard property policies, including earthquake and flood losses.
  4. Define the purpose of a FAIR Plan and recognize when this type of coverage may be needed.
  5. Identify the types of insurance policies available for personal watercraft exposures.
  6. Recognize the purpose of a Personal Umbrella Liability policy and explain how it provides additional liability protection above underlying insurance policies.

Overview​

Personal lines insurance is not limited to Dwelling, Homeowners, and Personal Auto policies. While these policies provide important protection for many individuals and families, some personal lines clients have exposures that require additional or specialized coverage. This chapter introduces other personal lines policies that are designed to address coverage needs not fully handled by standard property and auto policies. These policies generally fall into three categories:

  1. Coverage for property that may be ineligible under Dwelling, Homeowners, or Personal Auto policies because of the property’s value, type, or use.
  2. Coverage for perils that are specifically excluded under standard Dwelling, Homeowners, or Personal Auto policies.
  3. Coverage that provides broader protection, broader covered perils, or a broader coverage territory than is available under standard personal lines policies.

Understanding these additional policy options helps insurance professionals identify coverage gaps and recommend appropriate solutions for personal lines clients.

An Insurance Story

Sofia and Liam Nelson have Dwelling, Homeowners, and Personal Auto policies, but they learn that these policies do not cover every exposure they want to insure. For example, their standard property policies do not provide coverage for damage to their home caused by earthquake or flood. They also discover that coverage for watercraft is limited by special limits and several exclusions.

In addition, Sofia and Liam want higher liability limits than those provided by their Homeowners and Personal Auto policies. To address these coverage gaps, they may need to purchase other personal lines policies that are available in the insurance market.