What Are the 3 Main Types of Insurance?

Everybody needs a backup plan for one of those unexpected turns that life might throw your way. Maybe your teenage daughter rammed your car into a tree, and now it needs $1,500 to replace a headlight and get the bumper repainted. This surprise expense can ruin your budget, and things can get even worse if your kid sustained severe injuries. So, if you haven’t insured your family and valuable assets already, check out MIS Insurance Services, LLC.

Health Insurance

According to the American Journal of Public health, most people are one severe illness away from bankruptcy. This report indicates that medical bills and lost income due to illness are the leading cause of personal bankruptcy in the US. And these numbers can only go up.

With that in mind, you should be highly motivated to get health insurance or possibly upgrade to better coverage. But as taxes and other copayments continue to weigh heavily on most Americans, health insurance is becoming a luxury that many people can’t afford.

Still, healthcare costs are more damaging than spending a small portion of your income on health insurance. The national average price of one day in the hospital is over $2,000, and the cost of insuring a family for a month is $1,152. This cost can go even lower if you participate in an employer-sponsored health care program. Or if you join a trade association with group health care packages.

Homeowner Insurance

Buying a home is probably the most significant investment most people make in a lifetime, and getting home insurance makes the most sense. This policy covers interior damage, loss or damage of belongings, exterior damage, and injuries within the property. 

Take this as an example:

Your home has suffered water damage after a series of storms. The claims adjuster estimates the repair at a whopping $10,000 because you need a new roof. After approval, you will have to pay a deductible, say $4,000 out-of-pocket. Then your insurance will add the remainder, in this case, $6,000. However, it is worth noting that your monthly premium depends on how much deductible you’re willing to take.

Homeowner insurance comes with certain limitations. For example, the liability limit dictates the ceiling value of your claim. Most insurers slap a $100,000 limit on standard policies, but this can go higher depending on the situation. However, acts of war and natural disasters are excluded from standard homeowner insurance. That’s because damage from these incidents is often extensive, and that could drive insurers out of business. So, you’ll need a special type of cover if you live in an area prone to earthquakes or floods.

Also, you might want to know that homeowners insurance is not the same as a home warranty. A home warranty is a contract that provides repairs for home systems and appliances such as water heaters, washer/dryer, and pools. They usually last 12 months and are a nice addition to homeowner insurance if you want true peace of mind.

Auto Insurance

Many things could go wrong if you own or drive a car, and that’s why insurance is a requirement for all vehicles in the country. You can think of it as a contract between you and an insurance company that protects you from the financial implications of vehicle damage in exchange for a premium.

Like most things in life, insurance covers come in different shapes and sizes. The exact details of the policy depend on how much annual or monthly premium you pay and your state’s minimum requirements. That means you might not get full compensation after damage or bodily injury, depending on the type of cover you choose.

Usually, auto insurance premiums depend on age, gender, years of driving experience, and other factors. For example, people below age 24 will always pay more compared to other drivers. And, this premium can go even higher if the driver has been in previous accidents that ended in an insurance claim. Mature women tend to get the best rates, but that depends on their driving record.

Still, people with higher premiums get a chance to reduce their monthly or annual contributions by accepting a bigger deductible. That is the amount you’ll have to pay insurance before they can release the claim. However, going overboard with the deductible can result in a big problem. For example, if you can’t raise the amount in good time, your insurance settlement will take longer to mature.

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