Insurance: Types of Insurance | How Insurance Work

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Talking about insurance, some people already know what it is. However, other people do not know. Now, shortly described, insurance is a contract that is represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Insurance

Insurance

Insurance policies are used as an edge against the risk of financial losses. Which may result from damage to the insured or her property. Or even from liability for damage or injury caused by a third party. At this point, surely you must be confused. ‘How does insurance work’? This is the question almost anybody would ask. Well, let’s take a look at that.

How does Insurance Work

Insurance works in a very simple way. There are different ways in which insurance exists. Virtually, any individual or business can find an insurance company and apply for one. These companies are the ones that insure but you have to be aware of spammers. Shortly we will be discussing the types of insurance. But before that, you should know that an agreement must be made before any insurance can take place. The policy that will be given to you and the agreement depends on the kind of insurance you want to get.

Types of Insurance

Below are the types of insurance that can be offered. There is so much so what we are going to do here is list a few and talk about them.

  • Health Insurance.
  • Auto Insurance.
  • Life Insurance.
  • Casualty Insurance.
  • Property Insurance and so on.

Now that we have listed a few of the types of insurance, let us get to know and understand them.

Health Insurance

This kind of insurance is the kind that makes sure you stay healthy. How is this, one might ask. Well, it is very simple. Whenever you have any health problems, your insurer will take care of them. Let’s say for instance you need a heart transplant, your insurer will be the one to cover this cost.

Auto Insurance

This kind protects the holder against all financial losses whenever an incident occurs that involves a vehicle they own. This is very simple. Let’s say for instance you own a car and you are involved in a car accident out of your fault, your insurer will get the car repaired or buy you a new one.

Life Insurance

This kind of insurance provides monetary benefits to the descendant’s family or a chosen beneficiary. This may specifically provide income to the descendant’s family. Also, burial, or even other financial expenses. It depends on the kind of deal made.

Property Insurance

This is the kind of insurance that covers a property loss. If your building gets burned down, your insurance company will cover the cost.

Insurance Terms You Should Know

Now that you understand how insurance works and know about the types, It is high time you learn some terms associated with it.

  • Insurance Policy. Now, this is a contract between an insurer and the insured. This determines the claims which the insurer is required to pay by law.
  • Insurance Broker. An insurance broker is an individual who is a risk management specialist that provides advice in the interest of their clients.
  • Insurance Underwriter. An insurance underwriter is usually an individual who evaluates and analyses risks involved in insuring people and assets.
  • Insurance Premium. This is the amount of money an individual or entity pays for an insurance policy.

Above are a few of the terms you should be familiar with. There are still other ones. And one of them includes Insurance Agent. An agent is an individual or organization who solicits and negotiates contracts on behalf of the insurer.

Some Insurance Companies

There are several insurance companies and offices scattered all over the world. Below are some of the insurance companies.

  • Geico.
  • Allstate.
  • Progressive.
  • Auto-Owners Insurance.
  • Esurance.
  • Liberty Mutual Insurance.
  • Nationwide Insurance.
  • Safeco.
  • MetLife.
  • Guinea Insurance Plc.
  • Wapic Insurance Plc.
  • USAA Group.
  • NJM Insurance Group.
  • Amica Mutual Group.
  • Automobile Club of Southern California.
  • California Casualty Group.
  • Chubb INA Group and so on.

There are several other insurance companies and above are listed some of them. You should know that the company you decide to apply with. Would determine the kind of insurance you get. This is because not all companies offer all the types of insurance. Some only offer three to four types.

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