Insurance policies can be complex, so this section offers high level overviews of some of the most frequently purchased coverage types.
Homeowners insurance provides financial security against unexpected damage to your home, property structures and personal belongings. Most policies include liability coverage. Some policies even include replacement cost coverage which pays to repair or replace items without depreciation being deducted from coverage costs.
Homeowners Insurance
Homeowners insurance provides protection for both the structure of your home and personal possessions from damage or theft, and liability in case someone is injured on your property. Mortgage lenders usually require mortgage borrowers to carry this type of policy.
There are various forms of homeowners policies available, such as an HO-1 policy which offers limited protection, or the more popular and comprehensive HO-3 option which offers more extensive protection. There’s even the HO-5 which offers comprehensive protection.
Your home and other structures on the property are covered by homeowners insurance for either replacement cost or actual cash value, which takes into account depreciation with age. You have a range of deductible options when selecting your policy which impacts its annual premium; furthermore, additional endorsements such as increased replacement cost coverage or covering removal debris after claims can also be added in to meet compliance regulations that weren’t in place when your house was built.
Auto Insurance
Car insurance is typically required by most states for legally operating a vehicle, with minimum limits established by each state for liability coverage and multiple other forms of protection available in most policies. While liability covers expenses that result from accidents such as medical payments for those in your car and property damage. Comprehensive policies also help cover losses from non-collision events like fire, theft and vandalism losses while uninsured/underinsured motorist coverage helps cover damages in cases when involved with drivers who don’t carry enough coverage or lack enough.
Full coverage refers to auto policies with all available coverages, each having a separate deductible that must be met before claims payments begin from insurers; for instance, with collision deductibles starting at $500 this means paying first $500 of repairs needed after an accident before receiving payments from them.
Life Insurance
There are various kinds of life insurance policies available, but most fall into two main categories: term and permanent life (also referred to as whole life). A term policy usually lasts 10-20-30 years before paying out on death within that timeframe; permanent life policies offer savings components which build cash value over time, so their premiums tend to be higher than term policies of similar coverage.
Final expense life insurance (commonly referred to as burial or funeral insurance) is a type of whole life policy designed to provide a smaller and more affordable death benefit that helps cover end-of-life expenses. Some insurers provide simplified issue policies which allow policy holders to skip medical exams by answering some health-related questions instead, while others require more in-depth underwriting processes with full medical examinations before becoming insured.
Health Insurance
Health insurance covers your medical and hospital expenses when you’re sick or injured, as well as preventive visits to your physician and any prescription medicines you need.
Deductible–This annual expense must be met before your health plan can start providing services; most plans offer this feature.
Co-insurance refers to a percentage (e.g. 20%) of health care services costs that you share with your health insurance provider. Most policies contain co-insurance provisions.
Managed care–A type of health insurance which restricts your choice to doctors and hospitals that belong to the managed care network. Managed care plans often require referral from your primary care physician in order to see specialists.
Limited benefit plans–These types of health insurance typically provide limited benefits. Advertised on television, these plans combine high deductibles with health savings accounts where you or your employer can put tax-free money in order to help pay the deductibles.
