Insurance polices protect people from risk and spread the financial burden of those risks over a large group. Consider the following four main types of insurance and explore our website for a free quote.
Automobile Coverage
Auto insurance is meant to protect drivers from financial loss if they are in a vehicle accident. It covers the cost of vehicle and property damage, as well as medical costs for any injured persons. Coverage options vary by state. The most common forms of coverage include:
- Liability covers the medical costs and property damage of the other person and vehicle, not the driver at fault.
- Collision pays for damages to the driver's vehicle regardless of who is at fault.
- Personal Injury Protection (PIP) covers medical costs and lost wages for the driver and any other injured persons regardless of who is at fault.
- Comprehensive coverage protects the insured from many different events, including theft, fire, flooding or vandalism.
Life Insurance
Life insurance policies pay an agreed upon sum of money to a designated beneficiary upon the death of the insured. They can relieve the financial burden in the event a person dies, especially if the death is premature. Many policies also include living benefits, an amount of money that can be collected in case of an accident or the diagnosis of a terminal illness. The main types of life insurance are:
- Individual Whole Life
- Term Life
- Universal Life
- Fixed, Indexed and Variable Annuities
Homeowner's Protection
Homeowner's insurance protects homeowners from various risks associated with their residence. It covers the total or partial loss of a home and the owner's personal belongings within the home. In addition, homeowner's policies include liability insurance, which protects the homeowner from being responsible in the event of an accident on their property. Homeowner's insurance will also pay for living expenses if the insured person's home is unlivable for a certain amount of time. Special policies exist for renters and condominium owners. Typical coverage includes the following:
- The main dwelling is usually insured at 80 percent of actual value.
- Other structures on the property can be insured, but usually not for more than 10 to 20 percent of the main dwelling coverage. Structures used for business must be insured separately.
- Personal property coverage is usually 50 to 70 percent of the main dwelling coverage amount.
Health Insurance
Health insurance protects individuals from having to absorb the financial burden of medical expenses. Policies can vary significantly based on a person's health risk, whether or not they belong to an insured group or the jurisdiction in which they live. Below are three main health insurance policy formats. Keep in mind, however, that many plans combine two or more formats.
- Deductible plans designate a set amount the insured person is responsible for paying before the insurer will start paying their share.
- Co-payment policies include a fixed rate the insured pays for medical services. The insurance company pays the medical costs beyond the fixed co-payment.
- Co-insurance is an arrangement in which the insured is responsible for a percentage of a medical procedure, with the insurance company paying the remaining percentage.