The Different Types of Insurance

Insurance is one of the ways you can protect yourself against certain types of risks. Life is full of unfortunate, unexpected events that can potentially cost a lot of money. If you don’t have the money to recover from certain disasters, you could end up in financial bankruptcy. Even if you are among the wealthy who can afford to pay the expense of a disaster, it’s not a good use of money. It’s smarter to cover yourself with insurance. That way, you pay a small premium for an extraordinary benefit.

There are several different types of insurance available. In fact, there’s an insurance to cover nearly any type of product you can imagine. Of course, not everyone needs every type of insurance. Here’s an overview of some of the most common types of insurance to give you an understanding of what’s available.

Health Insurance

As the name implies, health insurance covers your health. There are different levels of health insurance, but at the most basic level, it covers doctor visits and some prescriptions. Some types of health insurance require you to select a single doctor that you visit for all your health needs. Others allow you to choose among several different doctors. There are health insurances that pay only for prescriptions. Some health insurances require you to pay a certain amount of money out of pocket before they begin to cover your medical expenses.

Auto Insurance

Having your car insured keeps you from having to pay the cost of damages caused by an accident. Most states require you to have liability auto insurance which pays for damages you cause to another vehicle. You might choose to have uninsured motorist coverage which covers you in case the other motorist is at fault and doesn’t have insurance. Some types of auto insurance also cover car theft. You can typically add multiple drivers and cars to a single auto insurance policy.

Life Insurance

Having a life insurance policy allows you to leave a monetary benefit to your loved ones upon your death. Your family can use the life insurance benefit to cover burial and funeral costs. If you have outstanding debts, like a mortgage or student loan, life insurance can relieve that burden from your family. Finally, if your loved ones depend on your income, the life insurance benefit can help cover their ordinary expenses.

Homeowners Insurance

If there is any damage to your property, homeowners insurance helps provide financial protection. Homeowners insurance covers both your property and the items inside it. Not only does the insurance provide protection for your property, it often includes liability insurance for injuries that are caused by your or your pets. Though there is some protection against natural events like earthquakes and hurricanes, you often have to purchase a separate policy to cover damages caused by those types of events.

Renters Insurance

For tenants renting property, rental insurance provides coverage for personal property you have inside your apartment, condo, townhouse, or even a house. Even though your landlord has an insurance policy covering the actual structure, that insurance won’t cover your personal belongings if there is a fire or theft.

March 12, 2009, Posted by Rainy Day Mitch