What Is Insurance?
Insurance is a contract, represented by a policy, in which the insured receives financial protection or reimbursement against losses from an insurance company. The company pools customers’ risks to make payouts more affordable for the insured. Most people have some insurance: for their car, their home, their health care, or their life.Insurance policies protect against financial losses resulting from accidents, injuries, or property damage. Insurance also helps cover costs associated with liability (legal responsibility) for damage or injury caused to a third party.
1KEY TAKEAWAYSInsurance is a contract (policy) in which an insurer indemnifies another person for losses
How Insurance Works?
There are many types of insurance policies available, and almost any person or business can find an insurance company that will insure them for a price. The most common types of personal insurance policies are auto, health, home, and life insurance. Most people in the United States have at least one of these types of insurance, and auto insurance is required by state law.
Businesses obtain insurance policies against risks that are specific to their industry. For example, a fast food restaurant policy might cover employee injuries caused by cooking with a deep fryer. Medical malpractice insurance covers liability claims related to injuries or death resulting from the negligence or malpractice of a health care provider. A business can use a registered insurance broker to help manage its employee policies. State law may require businesses to carry specific insurance coverages
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Home Insurance?
Homeowners insurance (also known as homeowners insurance) protects your home, other property structures, and personal property against natural disasters, unexpected damage, theft, and vandalism. Homeowners insurance does not cover floods or earthquakes, which you will need to protect against separately. Policy providers often offer riders increased coverage for specific properties or events and provisions that can help lower your deductible. These add-ons will have a premium>
Renters insurance is another type of homeowners insurance.Your lender or landlord will likely require you to have homeowners insurance coverage. For homes, if you don’t have coverage or stop paying your insurance bill, your mortgage lender can buy homeowners insurance from you and charge you for it.
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What Is Insurance?
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