Which Types of Insurance Will I Need?
Insurance is a way of protection against financial loss. It’s a form of risk management, mainly used to offset the risk of an uncertain or potentially unforeseeable future event. The basic idea is that if something bad happened today and you were unprotected, you’d have enough money to replace everything damaged, at least to the extent of your investment in the event of an unforeseeable event. This is the principal reason insurance is usually required by law in most states as a precondition to obtaining a license or insurance card to drive a car or to rent a hotel room.
There are four types of general insurances: property insurance, motor vehicle insurance, commercial insurance, and travel insurance. General insurances cover a wide variety of topics ranging from automobile accidents to medical malpractice. They are very broad in coverage and often provide coverage for many risks that could result in financial damage to an individual or company. The most common forms of general insurances are life, health, dental, and property insurance. These coverages are generally required by law in most states.
Liability insurance policies are designed to pay for injuries to others caused by the negligence of an individual or company. If you have a liability policy, the insurer will take care of the expenses resulting from an injury if you are injured while on the property of another person. If your policy limits the amount of damages you can seek, it could be expensive to file a suit against the other person. For example, if your neighbor has a bar where you frequently go to play pool, and he neglects to warn you that a pool fence falls when you’re playing, a liability insurance policy will protect you if you injure yourself.
Marine insurance is designed to protect against damage or loss to an ocean-going vessel. Some examples of insurable interest in marine policies are boating equipment, fishing gear, watercraft, vessels, rail cars, and marine supplies. If your boat is significantly damaged as a result of a collision with another vessel, fire, or a flood, the insured party will compensate for your losses. Fire insurance is also important in marine perils coverage, as it covers the loss or damage to the equipment used to create fire.
If you drive a car, the automobile insurance protects you in cases where you injure yourself or others in accidents. In the event you are hit by an uninsured driver, the automobile insurer will compensate for any medical expenses you incur and any damage to your vehicle. In the event of a boating accident, the maritime insurer will pay to replace personal belongings and repair costs for you and other people involved in the accident if you are a passenger in an insured car. If you are a boat owner, you may also want to consider having both types of marine perils coverage to protect against liability, as well as loss of profits and loss of use or enjoyment.
Life insurance policy coverage is available that will also cover loss of use or enjoyment, should you die while a covered entity is not operating. Your beneficiary will receive payments to provide for these necessities, depending on the policy limit. In addition, the insurance company of the person who was insured under your policy will also provide for these expenditures if you die within the policy limit. In most cases, the premiums for this type of coverage are less expensive than for health insurance. Life insurance and health insurance are usually the only types of insurance coverage that multiple insurance policies provide together.