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Insurance 101: All You Need To Know About Insurance

Most people nowadays own insurance. Ranging from health to life, to liability insurance; insurance helps people in various ways.  It manages risks and at the same time, it can also help you manage your wealth; this is one reason why it is very important to choose the best insurance plan in order to establish the best financial plan that you possibly can.

What is Insurance?

Insurance CoverageInsurance is a contract where an insurance company gives larger monetary compensation for a specified potential loss or damage in exchange for smaller periodic payments. Basically, insurance is a type of risk-management where people can actually avoid major monetary losses. Insurance serves like savings for the unexpected happenings in the future. No one knows what is going to happen later on, so insurance helps us prepare for what might come.

An example would be when one is paying a certain monthly fee for a life insurance policy. If that person dies and leaves debts behind, his/her family will avoid the hardship of paying for those debts because that person’s insurance will cover it.

Insurance That You Really Need

There are many types of insurance that can cover almost any type of liability, but there are only few that you really need.

1)      Auto Insurance – In most states auto insurance is required before you can register your vehicle, it’s not the car that’s going to get the benefit. If you get into an accident, automobile liability insurance will first of all  cover legal defence expenses as long as related to the car incident, it will also cover any liability you have to the other party.  Collision insurance pays for damages to your car if you cause an accident. Collision insurance is not mandatory insurance unless your car is financed or leased. Comprehensive auto insurance covers a wide variety of damages not covered by liability or collision insurance. For example, it covers damages caused by hitting animals or that are the result of events such as storms, falling trees, etc. See Car Insurance Terminology for Newbies for a complete discription of types of car insurance.

2)      Health Insurance – Many people consider this the most important insurance that one can have. Your health is what’s keeping you working and earning. If you lose it, it would be hard to earn and suffice for yourself. Health insurance will cover visits to the doctor, hospital and emergency room. See: Health Insurance Information and Procedures

3)      Life Insurance – Death is one unpredictable moment in our life. In just a second, you can lose your precious life and if you do, what would happen to your debts and to your family? Life insurance, at the very least, can help your family with funeral expenses and can give them decent support financially when you are gone. The Differences Between Term and Whole-Life Insurance

4)      Property Insurance – Where you live is one of the most important things that need to be insured. Your house is one of the greatest assets you will ever have and it is just proper to get insurance for it. This will ensure you get to protect your home and in case of damages and robbery, you can cover some of it with this insurance. Accorcing to Optiomoney Home owners insurance is also commonly called hazard insurance (often abbreviated in the real estate industry as HOI). It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. It requires that at least one of the named insureds occupies the home.

Though there are many types of insurance , it is very important to evaluate what you really need to avoid additional expenses and  provide the proper coverage to meet your personal, financial and family needs.

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