Anything that
can be given a
quantified risk
value can
potentially be
insured.
However, not all
valued items are
subject to
exactly the same
types of events.
Nor do all
events result in
the same types
of loss, damage,
or other
circumstances.
To account for
all the
differences,
insurance
companies have
created a wide
variety of types
of insurance.
The majority of
these types of
insurance
includes a
combination of,
or at least
includes one of
these forms of
coverage:
property
coverage,
liability
coverage, and
medical
coverage.
Property
coverage pays
for damage or
theft of the
item. Liability
coverage pays
for the
compensation to
others for
property damage
and bodily
injury. Medical
coverage pays
the cost of
treating
injuries,
rehabilitation,
and in some
instances, lost
wages and burial
expenses.
Here is a list
of the most
commonly used
insurance types,
and what
coverage each
type provides:
-
Accidental death
and
dismemberment
insurance: Is
usually provided
by lenders and
financial
institutions and
is typically a
cross between a
life insurance
and credit
insurance
coverage.
Basically, if
the policy
holder or bank
account holder
is killed due to
any type of
accident, then
the designated
beneficiary
receives a
certain amount
of monetary
compensation,
and any
outstanding loan
is paid off in
full. If the
person loses a
limb due to an
accident, then
he or she is
monetarily
compensated. If
unable to work
due to the
dismemberment,
then any
outstanding loan
is paid off in
full.
-
Auto insurance:
Is usually
issued for six
months to a year
and typically
covers property,
medical and
liability (risk
caused by a car
accident.
-
Credit
insurance: Is
usually issued
for the duration
of a loan in the
form of a
payment
protection plan
and typically
repays all or
some of the
remaining loan
balance if the
borrower becomes
unemployed,
disabled, or
dies.
-
Health
insurance: Is
usually issued
as an employment
benefit, with
the employer and
employee both
paying a part of
the monthly
premiums. It
typically pays
for most medical
treatments,
although some
pre-existing
conditions may
be excluded.
Dental and
vision care are
usually excluded
or added in at
an extra cost.
Various types of
health insurance
are available to
everyone.
-
Home insurance:
Is usually
issued for a
year, and
typically
includes
property
coverage,
liability
coverage, and to
some extent,
medical
coverage.
Usually damage
or destruction
of a home from
natural
disasters such
as wind, flood,
and earthquake
are not covered
in geographical
areas where they
occur
frequently. This
type of coverage
usually has to
be specifically
added on to the
policy, at an
extra cost.
Routine home
maintenance is
also excluded.
The contents of
the home may or
may not be
included in the
coverage, but
can be added on
usually or
purchased
separately for
an extra fee.
For those who
rent their
homes, there is
a renter’s
insurance that
covers the
content of the
home.
-
Life insurance:
Is usually
issued for the
duration of the
insured person’s
life, as long as
the monthly
premiums are
paid. Life
insurance
typically pays a
specific
monetary benefit
to the insured
person’s
designated
beneficiary or
legal heirs.
Typically part
of the funds is
used for funeral
expenses and
other final
expenses. The
rest is used
however the
beneficiary
chooses to use
it. The
beneficiary is
usually given
the option of
being paid a
lump sum cash
payment or
through an
annuity.
Annuities
provide income
over a long
period of time,
and is treated
the same as if
they were life
insurance
policies. Some
types of life
insurance
policies
accumulate cash
values, which
may be borrowed
against or
attained by
surrendering the
policy. In most
cases, the
interest earned
from a life
insurance policy
in non-taxable.
-
Professional
liability
insurance: Is
usually issued
on a yearly
basis and the
name and types
of coverage vary
from one
profession to
another. It is
basically used
to protect a
professional
worker or
business, such
as a doctor or
architect, or
mechanic against
potential
negligence
claims filed by
their clients.
There are
countless other
types of
insurance, as
well. Usually
the easiest way
to find
insurance is to
classify it
within one of
the main
categories
first. The
primary
categories are
home/residential
property,
commercial
property,
business, auto,
and recreational
vehicles.