Equipment insurance will provide coverage for mechanical breakdowns of equipment, including the cost of repairing or replacing the equipment. The equipment can include: air conditioners, hot water heaters, electrical and mechanical boxes, boilers, and even sometimes computers and telephone systems. Common types of damage to equipment include: short circuits, air conditioning failure, and boiler or hot water heater cracking, burning or bulging. Coverage includes repair and replacement costs, as well as costs to expedite repairs as well as damage to other property caused by the equipment breakdown (Ollis, 1997).
Title insurance protects an individual's investment before they make a property purchase.
With real estate traditionally being an individual's most valuable asset, title insurance is one of the most important forms of insurance for personal finance management. Simply put, title insurance guarantees that a title for a piece of property has no other parties who have rights or claims to it, or if there are parties, these will be identified to the buyer, so that they can make their purchase decision accordingly.
Title insurance is a one-time premium for the purchase of the property.
Should a claim be made against the title, the title insurers will pay to defend the title in court, and will bear the cost of settling to maintain the insured's possession of the property ("What is title," 2006).
Homeowners insurance occurs after the purchase of the property. "Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it" ("What is homeowners," n.d.).
This type of policy provides protection against damage to the insured's personal property as well as liability or legal responsibility for injury or property damaged caused by the insured or their family members, including damage done by family pets. Although most disaster damage is covered, there are exceptions. Floods, earthquakes, and damage due to poor maintenance are typically not covered. Although maintenance related problems are the responsibility of the homeowner, additional flood or earthquake policies are available as two separate policies.
As mentioned, flood and earthquake insurance must be purchased as separate insurance policies.
Flood insurance is a specially created policy to cover damage caused by flooding. Federally-backed mortgages for properties located in a high-risk zone are required to care flood insurance. A standard flood policy covers a variety of areas of loss. These include: structural damage, mechanical equipment such as furnace, water heater, and air conditioner, flood debris clean up, and flooring surfaces, such as carpeting and tile. A flood insurance policy can also be purchased that will cover the contents of the home, such as: furniture, jewelry, clothing, collectibles, artwork, etc. ("What is flood," 2007).
Earthquake insurance is also a separate policy to be purchased in addition to standard homeowners insurance.
Unlike most homeowner or tenant policies, earthquake insurance primarily covers major losses. It normally is sold with deductibles equaling 10 to 25% of the structure's policy limit. Recently, the industry trend has been to raise deductibles"("Facts about earthquake," 2004). Separate premiums are charged for: total amount of loss for contents, total amount of loss for structure, and total amount of loss for unattached structures.
A third addition to a standard homeowners policy is fire insurance. Fire insurance covers far more than simply damage by fire to a home. It covers: collapse, explosion, hail, lightning, smoke, vandalism, weight of ice or snow, and windstorm ("Fire insurance," 2007) damage to a property, further protecting an individual's greatest asset.
Travel insurance is becoming increasingly popular and provides many benefits that are often covered by other forms of insurance an individual may already have in place.
Travel insurance can include trip cancellation, trip interruption, accidental death or dismemberment, medical and dental care, transportation to medical facilities, loss of luggage or personal possessions, and protection against the bankruptcy or default of your cruise line or tour operator" (Coffey, 2007). However, as Coffey notes, many homeowners policies provide coverage for theft and other losses away from home. Medical and auto insurance may be valid even if the individual travels outside of the country. and, airlines must reimburse an individual should their bags be lost. Certain credit cards also offer travel insurance benefits. American Express' Platinum Card has not only an accidental death and dismemberment coverage benefit, but also provides insurance for rental car loss or damage.
Credit insurance is an optional insurance that is often offered when an individual applies for a personal or mortgage loan. This type of policy protects the insured in case they are unable to make payments. There are four primary categories of credit insurance. These include credit life insurance, which pays off all or some of an individual's loan, in the case of death. Credit disability insurance makes payments on the loan if the individual becomes to ill or injured to work. Involuntary unemployment insurance, which...
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