In this blog, you’ll be learning about the basics of insurance and some of the different types. Insurance is something you will most likely pay one day for your house, car, life, etc. So, let’s learn what it is.
What is insurance?
Insurance is a bill that you pay monthly in order to protect your belongings. For example, If you were to get into a car crash, your insurance would pay based on your policy. It is not necessarily the amount that you have given in insurance but could be more or less. It is your “financial safety net”.
For example, my car insurance was about $300 per month and I was paying for a year on my car on my own insurance. After a year, I sadly got into a hit-and-run accident, my first accident and it totaled my car, however, insurance covered my hospital bill and car note even though the accident was not my fault. The amount I paid over the accumulation of that year was thousands of dollars less than what insurance paid. I was always annoyed by the insurance bill because I drove for 5 years without any accidents, yet, who knew I would need it due to someone else’s reckless driving.
Overall, insurance has you covered in a time of crisis. Sadly, not fully covered always but it does help in some way. Before we dive into the different types of insurance, I want you to know about a policy.
What is an insurance policy?
An insurance policy is an agreement made between you and the insurance company. It goes over what is covered. When I got into my car accident, even though I had medical insurance, my car policy also paid for my hospital bill, paid for my car daily at the towing lot, and paid my car note. This is because that was included in my policy. IT IS IMPORTANT TO READ YOUR POLICY. If you do not understand something, do not be afraid to ask for help because it will be money coming from your pocket. It’s okay not to understand it all.
Types of Insurance
Car insurance
Insurance that helps protect you and your car in case of accidents. It can also help if your car gets stolen or damaged by a natural disaster. When you have car insurance, you pay a certain amount of money (called a premium) to the insurance company regularly, and if something bad happens to your car, they can help cover the costs of fixing it or getting you a new one. As far as I know, you HAVE to have car insurance to get a car.
Home Insurance
Insurance that helps protect your house and the things inside it. It can help if your house gets damaged by things like fire, or storms, or if someone breaks in and steals your belongings. Home insurance also usually covers things like liability, which means if someone gets hurt on your property, the insurance can help cover the costs. Just like with car insurance, you pay a certain amount of money (called a premium) regularly to the insurance company, and if something bad happens to your home, they can help with the costs of repairs or replacements. This is a part of property insurance.
Life Insurance
Insurance that helps take care of your loved ones financially after you pass away. If something happens to you and you die, the insurance company gives a sum of money, called a death benefit, to the people you choose, like your family or anyone else you choose. This money can help them cover expenses like funeral costs, debts, or living expenses, so they’re not burdened financially during a difficult time.
Health insurance
A type of coverage (insurance) that helps pay for medical expenses. It provides financial protection against high medical costs resulting from illness, injury, or other healthcare needs. Health insurance typically covers a range of medical services, including doctor visits, hospital stays, prescription medications, preventive care, and sometimes dental and vision care.
Now, you have an overview of insurance and most of the common types to help you in an emergency. You are already a step ahead by understanding these things. Here are more types of insurance: pet insurance, liability insurance, travel insurance, disability insurance, and more.
PLEASE stay safe so that you can avoid insurance having to pay for things. Either way, things happen out of our control, and you should have an easier time being covered with insurance.
