Insurance is a way of protecting yourself from some of life's surprises. People pay a relatively small amount of money each year for insurance. If one of those little surprises pops up, a portion of the responsibility of paying for the surprise is transferred to the insurance company. This protects people from being forced to spend large sums of money to pay for large expenses, such as damage to their auto or damage to their home.
There are many types of insurance available. Some insurance is designed to protect a person's possessions and some is designed to protect a person's wealth.
Two types of insurance designed to protect possessions include: Auto Insurance and Property/Homeowner's Insurance.
An auto insurance policy is a package of six basic types of coverage.
Bodily Injury Liability covers costs when an accident is the fault of the insured and someone else is injured or dies. This is very important coverage to have!
Property Damage Liability covers costs when the driver damages property of someone else. Typically the damage is to the other driver's car, or to buildings, telephone poles or fences.
Medical Payments pays for medical bills of the insured or people riding in the car of the insured.
Uninsured Motorists covers costs when there is an accident and one of the parties involved does not have insurance or in hit-and-run situations when the other involved party is unknown. This is important insurance to have because there will always be people who break the law and drive without insurance.
Collision pays for repair costs to the insured party's vehicle when they are in an accident with another car or object.
Comprehensive Physical Damage covers incidents that may happen to the insured's automobile, including: vandalism, theft, damage from objects falling on it, and flood or storm damage.
A homeowner's policy is an insurance package to protect property. Property includes a home and everything in it, such as: furniture; jewelry; computers; and other possessions. People who rent property should have renter's insurance to cover all the property within the rented space.