Part Four: Protecting Your Personal and Property Insurance

Chapter 9: Property and Liability Insurance

Property:
Property is a term describing anything that a person or a business has legal title over,
affording owners certain enforceable rights over said items.
Examples of property, which may be tangible or intangible, include automotive vehicles,
industrial equipment, furniture, and real estate—the last of which is often referred to as "real
property."

 Property is any item that a person or a business has legal title over.
 Property can be tangible items, such as houses, cars, or appliances, or it can refer to
intangible items that carry the promise of future worth, such as stock and bond
certificates.
 Intellectual property refers to ideas such as logo designs and patents.
 Property owners may also have liabilities, which is the case if a business owner is on
the hook for medical expenses resulting from a customer incurring an injury on his
company's grounds.
Liability Insurance:
The term liability insurance refers to an insurance product that provides an insured party
with protection against claims resulting from injuries and damage to other people or
property. Liability insurance policies cover any legal costs and payouts an insured party is
responsible for if they are found legally liable. Intentional damage and contractual liabilities
are generally not covered in liability insurance policies. Unlike other types of insurance,
liability insurance policies pay third parties—not policyholders.

 Liability insurance provides protection against claims resulting from injuries and
damage to people and/or property.
 Liability insurance covers legal costs and payouts for which the insured party would be
found liable.
 Provisions not covered include Intentional damage, contractual liabilities, and criminal
prosecution.
 Liability insurance is often required for automotive insurance policies, product
manufacturers, and anyone who practices medicine or law.
 Personal liability, workers' compensation, and commercial liability are types of
liability insurance.
Insurance
What Is Insurance?
Insurance is a contract, represented by a policy, in which an individual or entity receives
financial protection or reimbursement against losses from an insurance company.

 Insurance is a contract (policy) in which an insurer indemnifies another against losses

from specific contingencies or perils.
  There many types of insurance policies. Life, health, homeowners, and auto are the
most common forms of insurance.
 The core components that make up most insurance policies are the deductible, policy
limit, and premium.
Type of Risk

What Does Insurance Risk Mean?

An insurance risk is a threat or peril that the insurance company has agreed to insure against in the
policy wordings.

These types of risks or perils have the potential to cause financial loss such as property damage or
bodily injury if it were to occur.

If the insured event takes place and a claim is filed, the insurance company has to pay the policyholder
the agreed reimbursement amount.

Examples of insurance risks include the risk of fire, earthquake losses, or even liability when an insured
is found responsible for causing bodily injury, death, or property damage to 3rd parties.

The more risks your insurance provider agrees to insure, the more comprehensive—and therefore
expensive—your policy will be.

Insurance Policy and Technologies

Protecting your most important assets is an important step in creating a solid personal financial plan,
and the right insurance policies will go a long way toward helping you safeguard your earning power
and your possessions. In this article, we discuss five policies you shouldn't do without.

10 DIFFERENT TYPES OF INSURANCE POLICIES IN THE PHILIPPINES

1. Life Insurance
In case the principal has died, a lumpsum amount will be given to the principal’s family.

2. Term Life insurance

You will get benefit in case the policyholder dies, if s/he doesn’t die in the period of coverage, you
may have nothing back.

3. Whole Life Insurance

The insurance is good for the entire lifetime of the policyholder, however premiums should be paid,
sometimes until the policyholder dies. When the policyholder dies, the death benefit will be given to
the beneficiaries.

4. Universal Life Insurance

In universal life insurance, not only will the policyholder have death benefits but also you can have
savings.

To make it simple, let’s say you need to pay 20,000 a year – a portion will be on your premium let’s say
15000 and the rest are invested; you will be paying for 30 years and until your death, the savings plus
interest will cover you. So you won’t have to pay anymore like the whole life insurance but still get
benefited.
5. Variable Life Insurance
Variable life insurance is a bit similar to universal, however, you could control where to invest. While
the interest in Universal is stagnant, in the variable you could go higher but it’s a bit risky since you
may get losses too.

6. Health Insurance
Most people have PhilHealth, insurance under the Philippine government. However, it is sometimes not
enough especially if you are many in the family or if you have a weak immune system.

7. Educational Insurance
Tuition fees are increasing and we are not sure if we could afford to let our kids go to prestigious
schools or universities, so we might as well invest in their future. Educational Insurance lets you save
money in advance and you can cash-outs for tuition payments or school allowance and education
benefits.

8. Vehicle and Accident Insurance

If you have a car or a motorcycle, then you need to have this insurance. In case your car gets damaged
or you or your family members riding the vehicle gets in an accident. The cost will depend on your
car’s cost and how many persons are in the vehicle. There might be deductibles too.

As an example: Person G has paid Php 500.00 for his CTPL, then he accidentally hit Pedestrian L.
Pedestrian L had Php 20,000 hospital bills, bought Php 5,000 worth of medicines and wasn’t able to
work for 5 days losing Php 2,500. He can ask reimbursement from Person G. Person G can submit the
documents to the broker so that he could be reimbursed of what he has given to Pedestrian L. With
CTPL Person G saved Php 27,000 (27,500 total expense – 500 CTPL.)

9. Property Insurance
The most common insurance for homeowners is property insurance in case of accidents like fire, theft,
earthquake, floods and many more. If your area is prone to fire or flood, then it is better if you own
this so that if such happens, you don’t start from scratch. It covers the house and what is inside. You’ll
have money to repair your house and buy new equipment. 

10. Travel Insurance

Off to travel? Ride a plane or a boat or go to another country? Well, you need to have travel insurance
that covers you in case you will lose your baggage, you’ll have delays or you get into an accident. I
recently encountered a car accident in Pakistan, and I was glad that I have Safetywing Insurance by my
side that covered all my medical expenses.

Property Damage and Coverage

injury to real or personal property through another's negligence, willful destruction or by some act of
nature.

In lawsuits for damages caused by negligence or a willful act, property damage is distinguished from
personal injury. Property damage may include harm to an automobile, a fence, a tree, a home or any
other possession.

The amount of recovery for property damage may be established by evidence of replacement value,
cost of repairs, loss of use until repaired or replaced or, in the case of heirlooms or very personal items
(e.g. wedding pictures), by subjective testimony as to sentimental value.
Insuring Your Home

What Is Homeowners Insurance?

Homeowners insurance is a form of property insurance that covers losses and damages to an individual's
residence, along with furnishings and other assets in the home. Homeowners insurance also provides
liability coverage against accidents in the home or on the property.

 Homeowners insurance is a form of property insurance that covers losses and damages to an
individual's house and assets in the home.
 The policy usually covers interior damage, exterior damage, loss or damage of personal assets,
and injury that arises while on the property.
 Every homeowners insurance policy has a liability limit, which determines the amount of
coverage the insured has should an unfortunate incident occur.
 Homeowners insurance should not be confused with a home warranty or with mortgage
insurance.
 Mortgage - legal agreement by which a bank or other creditor lends money at interest
in exchange for taking title of the debtor's property, with the condition that the
conveyance of title becomes void upon the payment of the debt.

What Is Property Insurance?

The basic goal behind buying any insurance is to make you financially whole following a loss. You agree
to pay a small certain fee to an insurance company today in exchange for a guarantee from the
company that it will bear the burden of a large but uncertain loss in the future.

 Carrying property insurance is advisable for anyone who owns an expensive property, such as a
house or a car.
 It is often purchased in tandem with liability insurance.
 Property insurance doesn’t cover all property equally; for some things, such as jewelry, you
may need additional floater coverage.

Sources/References:

https://www.investopedia.com/
https://www.wallstreetmojo.com/
https://twomonkeystravelgroup.com/
https://dictionary.law.com/

Prepared by:

Lesley Allen D. Kabigting, MBA

College of Business Administration
Guagua National Colleges