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What Is General Insurance?

Most states require a minimum level of general insurance coverage for all drivers.
Auto insurance is a common form of general insurance.
Article Details
  • Written By: S. McCumber
  • Edited By: Angela B.
  • Last Modified Date: 13 November 2014
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General insurance normally refers to any non-life insurance coverage. This includes both personal lines insurance and commercial lines insurance. Personal lines insurance includes the coverages used to protect a policyholder from loss or damage to personal property or from damages for which the policyholder may be held personally responsible. Commercial lines insurance protects a business from loss of its business property or damages for which the company may be held liable.

Personal automobile insurance and homeowners insurance are the most common types of general insurance. Automobile and homeowners policies can include both property and casualty coverage. Property coverage pays for loss to the policyholder’s property, while casualty coverage pays for damages for which the policyholder is held liable. For instance, if an insured person accidentally drives his personal automobile into the side of a building owned by someone else, his insurance would pay for the damage to his vehicle through his property coverage, and for damage to the building through his casualty coverage.

In many places, automobile insurance is required to operate a vehicle. If the vehicle is used by a business, the driver is normally covered under the company’s commercial auto policy. If the vehicle is personally owned, the driver would be covered by the owner’s personal auto policy.

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Homeowners insurance is another type of general insurance. Homeowners insurance pays for damage to a home and personal property owned by an insured person through the property coverage. It also offers, through its casualty coverage, protection from lawsuits that may occur as the result of damage inadvertently caused by the policyholder or other members of his household. If a home is damaged by a covered peril, such as a burst pipe, the policy’s property coverage would pay for repairs. If the insured person’s minor child accidentally threw a ball through a neighbor’s window, the policy’s casualty coverage would pay to have the neighbor’s window replaced.

Renter’s insurance is another type of general insurance. It is similar to homeowners insurance in that it covers the policyholder’s personal property while also offering liability coverage for damage for which the policyholder may be liable, including damage caused to the home being rented. If a renter leaves an oven on and causes a fire that damages the rental property, the renter’s policy would pay for damage to the home that was caused by the insured person. It would also pay for damage to the tenant’s personal belongings that occurred in the fire.

Commercial lines insurance is general insurance that is similar to personal lines insurance in that it can include both property and casualty coverages. The difference between personal lines and commercial lines insurance is that personal lines protects people engaged in their own non-work related business as well as property they own, and commercial lines coverages protect a business from the actions of its employees as well as the business’s assets. The most common types of commercial general insurance are commercial auto liability and commercial general liability.

In addition, there are several other categories of commercial lines general insurance. There are casualty coverages including premises liability, professional liability and products and complete operations liability. Premises liability covers visitors who may be injured on the insured’s property. Professional liability pays for damage caused to a client of a specially trained industry expert whose services were deficient or inaccurate in some way. Products and completed operations liability pays for damage caused by a product or service that was completed and relinquished by the insured, but then later caused damage to a client.

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