Insurance is a safeguard which provides a monetary sum to an individual or business which has suffered a financial or physical loss of property or damage to another individual. There are many types of insurance which cover health, automobiles, houses and electronics. Purchasing insurance on a policy usually means the policy holder pays the insurer monthly or yearly amounts of money with the expected protection should something financially damaging should occur. It is essentially an arrangement with a company or government which provides a guarantee of compensation should damage, illness, death or loss occur. In the United States, there are many types of insurance which are required for individuals and companies to possess. These guidelines may vary by state and situation.
Most insurance is tailored to an individual or a family, to protect them against unforeseen financial complications that may arise. One of the most common types of coverage is car insurance. All but one state (New Hampshire) requires drives to have insurance when operating a motor vehicle. Failure to do so may result in tickets, impounding the vehicle or revocation of a driver’s license. Vehicle insurance is paid to a company which provides liability coverage. If you are found at fault of an accident where property was damaged or someone was hurt, you and your insurance are responsible for paying to rectify those. Many policy holders pay a deductible out of pocket, which is usually a set amount agreed to when selecting a coverage. A higher deductible usually means a cheaper monthly rate, whereas paying more each month may mean a lower deductible when it comes time to pay the bill. Most drivers at fault face higher premiums and payments after an accident, due to the insurance company raising the rate to recoup their costs. Too many accidents can result in a cancellation of coverage, as it may be determined that a driver is simply too reckless, and too high-risk for an insurer to cover.
Another type of insurance which is common for many households, is life insurance. This type of coverage provides financial compensation to the beneficiaries of an individual who has passed away. The money provided to families is meant to cover funeral arrangements as well as help to aid in the recovery after what is often a traumatic event for the family. Life insurance may also provide financial support in covering medical bills as well as any on-going expenses that the deceased may have incurred. Rates for policies often depend on sex, age, medical history and the amount due upon the person’s death.
Homeowners have several types of insurance available to them in order to protect one of the largest assess most commonly held: a house. While a house is considered a ‘home’ more often than just a piece of property, it’s important to protect this long-term investment, or risk losing it due to natural disaster or financial delinquencies. Homeowners and Renters Insurance covers many types of damage and property loss. Depending on the policy, it may be necessary to add things such as fire, flood, and tornado coverage in addition to an existing damage term. These types of insurance provide compensation should something happen inside, or to your home. This may include burglary, someone being injured on your property, structural damage or other unforeseen issues. Insurance may be required in certain cities, or communities, and are often enforced by a homeowner’s association. Rates and policies vary based on the value of the property, as well as its location, as this can have an effect on what it’s most commonly exposed to, and what disasters are more likely to occur nearby. For example, if you’re living in Southern California it may make more sense to have fire coverage than it does a policy which includes tornado protection. Insurance is meant as protection against accidents and unexpected events that would otherwise cause irreparable harm to someone’s finances and ultimately lead to bankruptcy. Purchasing insurance to safeguard your assets and your family is a smart financial decision which gives the policy owner peace of mind.
This article was contributed by Richard Craft, an MBA student who hopes to help you with your finances. He writes this on behalf of Rockland Insurance, your number one choice when trying to find affordable coverage with Tomball Home Insurance. Check out their website today and see how they can help you!