Non-Life Insurance PDF

Lesson 12 NON-LIFE INSURANCE INTRODUCTION The discussion will focus on the importance and different types of non-life insurance. LEARNING OBJECTIVES 1. Recognize the importance of non-life insurance 2. Differentiate types of non-life insurance...

Lesson 12 NON-LIFE INSURANCE INTRODUCTION The discussion will focus on the importance and different types of non-life insurance. LEARNING OBJECTIVES 1. Recognize the importance of non-life insurance 2. Differentiate types of non-life insurance LECTURE DISCUSSION NON-LIFE INSURANCE Non-Life Insurance is a policy that provides compensation for losses incurred from a specific financial event. This type of policy is also known as general insurance, or property and casualty insurance. Examples of non-life insurance policies include automobile policies, home-owner policies, damage cover from fire, marine accidents, travel, theft and any catastrophe etc. Since the probability of occurrence of these risks is very difficult to ascertain, it thereby is an extremely difficult task to measure the amount of damage they would do, on their incidence. Non-life insurance spans different categories, and which one to choose depends on personal situation and preferences. A person can have more than one type of non-life insurance. The important thing to note is non-life insurance is valuable, and one should consider getting it if the situation calls for it. Below are the different types of non-life insurance and a checklist to determine if a person needs it: Car Insurance As the name itself says, car insurance insures the car (and the riders) in the event of accidents resulting from both natural (e.g. typhoons, floods, etc.) and man-made (e.g. theft, exterior and interior damages) occurrences. Comprehensive car insurance includes protection against accidents and theft and provides roadside and sometime medical assistance and coverage as well. When to get one?  If your car is your primary means of transportation (e.g. you use it regularly)  If you drive on roads that are accident-prone (e.g. susceptible to traffic, theft, natural disasters, etc.)   If you have a vehicle. It’s the law (for Compulsory third party liability (CTPL) insurance). Home Insurance Home insurance functions in the same way as car insurance does but for the home instead. Owning a home is part of the Filipino dream, and real estate is the preferable investment (over paper assets) in this country. With the importance of real property in this country, it should be a given to protect one’s home at all costs; however, not many consider getting home insurance, especially with the annual premiums that reach the high five-digit mark. One may be thinking that his house is sturdy, made of concrete, and has a stable foundation, so why bother with home insurance? Home insurance provides coverage from natural disasters, robberies, and water damages and may offer additional benefits such as a relocation allowance, legal assistance, and medical (ICU) assistance. An annual premium in the five-digit range will give a coverage valued in the millions. When to get one?  If you live in an area prone to natural disasters such as floods, typhoons, earthquakes, fires, etc.  If your home (e.g. secondhand) has a history of being neglected and is prone to water leaks and bursts, pipe damage, etc.  If you live in an area prone to malicious events such as thefts Fire Insurance Fire and home insurance policies are sometimes used interchangeably since the coverage they provide are almost the same. The main thing to note is that whether it is home or fire insurance, always read the policy, page to page. Ensure that all the points discussed and agreed with the insurance agent are all stated in the document. This way, it doesn’t matter whether one opted for home or fire insurance. If the coverage one wants to make a claim for is stated in his insurance policy, then there’s no need to worry. When to get one?   If you live in an area prone to fires and other natural disasters such as floods, typhoons, and earthquakes  If your home (e.g. secondhand) has a history of being neglected and is prone bursting of water systems  If you live in an area prone to riots and strikes Travel Insurance Many tend to forego of travel insurance because of the additional expense. However, the insurance premium is a small price to pay in the event of an accident, such as losing your luggage. If there is a plan to travel far away (e.g. from Southeast Asia to Europe) and expect to buy a lot of new belongings, maybe one should consider travel insurance for this once-in-a-lifetime trip. When to get one?  If you possess or expect to bring home valuable items  If your carrier has a reputation of providing sub-par services (e.g. flight delays, trip cancellations, etc)  If the carrier has received negative feedback from customers (e.g. lost or opened baggage, flight delays and cancellations, etc.) Health Insurance Health insurance is a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees, with premiums partially covered by the employer but often also deducted from employee paychecks. The cost of health insurance premiums is deductible to the payer, and the benefits received are tax-free.