A standard Homeowner's Insurance policy in addition to containing provisions which indemnify the homeowner for damage that may occur as the result of fire or theft contains numerous other provisions. Included in these provisions are protections to the homeowner for personal liability, if for instance someone were to be injured in a slip and fall on the homeowner's property. In addition if the homeowner's dog were to attack someone there are provisions in the homeowner's policy that will indemnify the homeowner for this action. Interestingly enough the rate charged for a policy of homeowner's insurance will differ depending on the breed of the dog. Dogs which have a greater propensity to attack and do greater physical harm if they attack will cause the homeowner's insurance policy to carry a higher premium.

Homeowner's insurance will also provide indemnification if your home is burglarized or if your car is broken into and property is taken by a thief. Homeowner's insurance will also indemnify the homeowner for loss of jewelry . It should be noted that the general homeowner's insurance policy will carry a standard loss provision for jewelry, bu this loss provision can be increase by obtaining an additional jewelry rider for the homeowner's insurance policy, albeit at an additional premium.

Interestingly a standard homeowner's insurance will provide liability for the homeowner and the homeowner's family for personal liability for alleged negligence on their part away from the home.

Automobile Insurance

Within the United States with rare exceptions all persons who own or purchase an automobile are mandated to have a policy of automobile insurance. Without a policy of automobile insurance the vehicle cannot be legally registered and hence operated on a public street. The primary coverage provided by a policy of automobile insurance include Personal Liability coverage. This part of an automobile insurance policy will provide indemnification for the insured if someone alleges that the insured caused that person to sustain injuries in an automobile accident. Depending upon the state, there is minimum mandatory coverage that must be maintained. In New York State, the minimum mandatory coverage requirement is $25,000 in coverage for injuries sustained by one person. The policy minimum in New York is $50,000 for injuries sustained by two or more individuals. All automobile insurance policies require coverage in the amount of $10,000 for any property damage to may be caused or sustained as the result of an automobile accident.

If there is a bank loan or financing upon the motor vehicle the lender will require that in addition to liability coverage the owner also obtain what is termed collision coverage. The reasoning for this is that the lender will want the vehicle in good repair in the event that the vehicle is repossessed as the result of a default on the loan. Collision coverage will allow the vehicle to be repaired regardless of who is at fault in an automobile accident. If the car is totaled as the result of an automobile accident, the insurance carrier will pay the lender for the balance of the loan and any additional sum based upon what is called the "Book Value" of the vehicle. The insured will receive any excess monies from these proceeds.

Fire and Theft coverage is another aspect of a policy of automobile insurance. The provisions of this coverage will compensate the insured owner of the vehicle to the extent of the Book Value of the automobile if the vehicle is stolen or damaged by fire. It should be noted that this coverage will cover the vehicle itself. If property is stolen from the vehicle or damaged as the result of the fire or theft, that item will be compensated through the insured homeowner's policy as described above.

It should be noted that the insurance carrier has two duties under the above described insurance coverage. The insurance carrier has a "Duty to Defend" its insured, meaning that insurance company must provide its insured with a legal defense. The insurance carrier also has a "Duty to Indemnify" its insured, meaning an obligation to pay out the required sums of coverage under the insurance policy. In New York it has been legally determined that the Duty to Defend is greater than the Duty to Indemnify. Thus even if it is questionable that the insurance carrier will be required to pay proceeds to someone injured in an automobile accident involving its insured, the insurance company may very well be mandated to provide a legal defense for its insured.

Life Insurance

The last area of insurance that will be examined in this lecture will be the concept of Life Insurance. Life Insurance is a policy which provides benefits to persons who are named as beneficiaries in the policy if the insured was to die. There are two forms of Life Insurance which are available for purchase.

Term Insurance

This is a policy which is available for specific limited period of time. Usually term policies are sold for either five or ten year period. I f the insured dies within the term period, then benefits will be paid in accordance with the policy, to the policy beneficiaries. It should be noted that when the period or term is completed the policy will expire. Term insurance does not carry a cash surrender value. It is essentially a wager as between the insured and the insurance carrier as to whether the insured will die during the term of the policy.

Whole Life Insurance

A policy of whole life insurance has two aspects. One aspect of the policy is similar to term insurance, meaning that if the insured dies during while the policy is in effect, the insurance carrier will pay a certain amount of benefits to the policy's beneficiaries. The other aspect a whole life policy is the investment side of the policy. The essence of this aspect of the policy requires the policyholder to pay the policy premiums for a number of years which is invested by the insurance carrier. When the premiums are fully paid, the insurance carrier will pay the policyholder a certain amount of money termed the "Cash Surrender Value" of the insurance policy.

Question:

Discuss the need for automobile insurance as means of protecting the yourself and the public in the safe operations of automobiles.