Personal Lines Insurance

What is 'Personal Lines Insurance'

Personal lines insurance includes property and casualty insurance products that protect individuals from losses they couldn’t afford to cover on their own. These types of insurance lines make it possible to do things like drive a car and own a home without risking financial ruin. Personal lines insurance and commercial lines insurance each make up about half of the overall insurance market.

BREAKING DOWN 'Personal Lines Insurance'

Personal lines insurance includes products such as homeowners insurance, flood insurance, earthquake insurance, renters insurance, automobile insurance, life insurance, disability insurance, umbrella insurance and health insurance. These insurance products protect individuals and families against potentially crushing financial losses caused by fire, theft, natural disasters, death, accidents, lawsuits and illness.

Some types of personal insurance, such as automobile liability insurance, are often required by law in most places in America (and other countries). Required minimum levels of automobile liability insurance, for example, is common and can vary by jurisdiction. Other types of personal lines insurance, such as comprehensive and collision automobile insurance and homeowners insurance, can be required by lenders when property is collateral on a loan. The amount of insurance coverage you can get generally depends on how much an individual is willing to pay in premiums; the more someone is willing to pay, the more insurance they can obtain. Individuals can usually tailor each policy’s coverage and deductibles to strike the right balance between the amount of coverage and the cost of premiums. Premiums can also vary according to where you live. 

Personal lines insurance won’t cover every risk an individual might face, but they can dramatically reduce their liability for damages and the dollar amount they might have to pay out of pocket to remedy an unfortunate situation.

Availability of Personal Lines Insurance

Sometimes, individuals may be unable to purchase a policy for a particular situation because they pose too great of a risk to the insurance company. For example, someone with a history of cancer might not be able to purchase life insurance. Another example would be a homeowner who wants to buy flood insurance, but whose house is below the flood plain. In some cases, high-risk individuals can still purchase insurance, but they will have to pay above-average premiums to compensate the insurer for the extra risk. One common example of this is high-risk auto insurance for drivers, who've received multiple moving traffic violations over a short time or who've been at fault in multiple accidents over a short period of time.