Insurance – A Detailed Guide to the Most Widely Used Types of Insurance

Learning the most important things about different types of insurance will help you immensely both as a buyer and as a policy holder. In general, the different types vary considerably in terms of the types of coverage they offer and the way in which they work. Knowing about insurance can only bring you benefits. You will be able to buy the most affordable and beneficial policy available in the market.

Auto or Car Insurance

In most countries around the world, including the US, drivers and vehicle owners are legally required to purchase certain types of auto insurance coverage. These include personal injury liability coverage and property damage liability coverage. With these types of coverage, the insurer agrees to pay out any medical and car repair bills, in case you are responsible for injuring other people and damaging their cars. You can also buy collision coverage and personal injury protection coverage as well as property coverage.

Home Insurance

With this type of insurance you can cover the building you live in and your personal belongings inside against different kinds of perils. Some of the most common perils you can insure your home against include fire, theft, windstorm and hale and civil riots. Most, if not all, policies do not cover your property and belongings against floods and earthquakes. You need to purchase such types of coverage as separate riders.

Landlords can also insure the property they rent to others with landlord insurance. If you rent a house or an apartment, you can cover your belongings with renter insurance.

Health Insurance

This is perhaps the most complex type of all. You need to buy such coverage so that you can have your medical bills covered in case you get sick or injured. You can buy individual coverage or a family coverage. You can have part of your insurance paid by your employer. You can choose from a variety of plans including private coverage, health maintenance organization coverage and point of service coverage. You can buy such coverage from a privately owned company or to participate in a state insurance program.

Life Insurance

This type of coverage is designed to provide financial benefits to the family of a deceased. It offers financial protection in case the main breadwinner in a family passes away. With the development of these products, some types of life insurance policies have become investment instruments that start paying a fraction of the benefit at certain point in time during the life of the insured.

Credit Insurance

With this type of coverage, you are financially protected in case you default on a loan. Usually, mortgage buyers are required to have such type of coverage. Many credit cards have such type of coverage automatically included.

Unemployment, Sickness and Accident Insurance

This type of coverage is designed to pay out financial benefits, in case the policy holder stops earning income due to the factors mentioned above. Such coverage can be extremely beneficial not only to individuals working in high-risk industries, such as mining, but to all given that the economy is still shaky.