Types of Insurance

• Common types of insurance include health insurance, home insurance, auto insurance and life insurance. Health insurance covers expenses related to health care such as routine doctor's visits, preventative care, surgery and treatments for diseases. Auto insurance covers expenses related to driving a vehicle such as damage you cause to other cars, damage caused to your own car while driving and damage that your cur incurs from other events such as theft and storms. Life insurance pays money to the beneficiaries of the covered individual if he happens to die, while home insurance protects against damage to a dwelling.
  
  

Deductibles

• A deductible is an upfront or out-of-pocket cost that you must pay before your insurance company will cover a loss or expense. Deductibles are a way insurance companies reduce the cost of insuring people, since they often allow the insurance company to avoid paying for small losses. For instance, if your auto insurance plan has a $1000 deductible and you get into a minor accident that causes $800 worth of damage, your insurance company is not liable for any of the damages. If your car had suffered $1,500 worth of damage, the insurance company would only pay you $500 after you paid the deductible. Choose to take on higher deductibles if you want to accept more risk and pay less on your monthly premiums.
  
  

Insurance Limits

• Insurance limits describe the maximum amount of money you can get from an insurance plan. For instance, your auto insurance plan might have a property liability limit of $50,000. If you crash into another driver who is driving a very expensive car that is worth far more than your limit, your insurance policy might not cover the full amount of the damages. Always consider insurance limits when buying an insurance plan.
  
  

Claims

• If a loss occurs that is covered by an insurance plan you hold, you must make a claim to your insurance company if you want to be paid by the plan. A claim is a formal request for payment for a loss covered by an insurance plan. Make claims as soon as possible after losses occur to ensure that you receive your benefits.