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Types/Classes of insurance.

 TYPES OF INSURANCE... 

Insurance may be classified in more than one ways. Traditionally, it used to be classified as (1') marine insurance, (ii) fire insurance, and (iii) life insurance.

Marine Insurance 

Marine insurance is the oldest form of insurance. It is also of two types: 

ocean marine insurance and inland marine insurance. Ocean marine insurance covers ocean-going vessels and cargo from loss or damage because of perils of the sea. It also covers legal liability of the shippers and owners. Inland marine insurance covers goods being shipped on land, which include imports, exports, domestic shipments, and means of transportation.  

Fire Insurance 

Fire insurance covers losses caused by fire and lightning. Personal as well as commercial properties such as buildings and their contents (furniture, equipments, raw material and finished goods, etc.) can be insured against the loss from fire. Though named fire insurance, it covers risks of Windstorm, hail, vandalism, etc. 

Life Insurance 

Life insurance provides the protection against the possibility of untimely  death, illness and retirement. The most common feature of life insurance is that it pays a fixed amount of insurance at the time of death or at the expiry of certain period. A variety of life policies are available to cater different needs of individuals and group of persons. Some policies cover medical expenses in case the insured falls sick. Some other policies pay income benefits during a period of disability. Some policies are designed for individuals while others are designed for groups. Major policies offered by life insurance companies are dealt in next chapter. 

Alternatively, the insurance industry is classified in three major groups -(i) life insurance, (ii) prdperty-casualty insurance, and (iii) social insurance. 

Life Insurance

As stated above, life insurance provides the protection against the possibility of untimely death, illness and retirement. 

Property-Casualty Insurance 

Property-casualty insurance protects against personal/ commercial injury and liability such as accidents, theft, and fire. Important property-casualty insurance includes the following. 

Fire insurance and aIlied lines 

It protects against the perils of fire, lightning, and removal of property damaged in fire. 

Homeowners multiple peril insurance 

It protects against multiple perils of damage to a personal dwelling and personal property as well as providing liability coverage against the financial consequences of legal liability due to injury done to others. Thus, it combines features of both property and liability insurance. 

Commercial multiple peril insurance 

It protects commercial firms against perils similar to homeowners multiple peril insurance. 

Automobile liability and physical damage insurance 

It provides protection against loss from (i) loss resulting from legal liability due to the ownership or use of the vehicle (auto liability) and (ii) theft or damage to vehicles (auto physical damage). 

Liability insurance (other than auto) 

It provides either individuals or commercial firms with protection against non-automobile-related legal liability. For commercial firms, this includes protection against liabilities relating to their business operations and product liability hazards. 

Social Insurance 

Certain events like unemployment and disabilities have undesirable implications in the society. Social insurance is done to reduce the impact of these events on the members of the society. The old-age, survivors, and disability insurance, medicare insurance, unemployment insurance, workers compensations are examples of social insurance. 

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