Master the basics of how insurance works

Learning how insurance works takes effort, but it's important to know the basic concepts of coverage in order to get what you need. Knowing what is available and how it works can have a big impact on the price you have to pay to get protection. With this knowledge, you will be able to choose the right policy to protect your lifestyle, assets, and property.

At its core, the concept of insurance is very basic. When you have something that can be lost, and you can not afford the loss yourself, you pay for insurance. By paying money each month, you get the peace of mind that if something goes wrong, the insurance company will pay you the things you need to make life as it was before your loss.

Main Points

When you buy insurance, you make a payment to the insurance company. These payments are called " premiums."

In return for your premium payment, you get protection from certain risks. The insurance company agrees to pay you for losses if they occur.

You can purchase many types of insurance, including auto, home, life, health, and Disability Insurance.

What Is Personal Insurance?

Personal insurance is a type of policy that is not of a commercial nature. You buy it to protect yourself from financial losses that you will not be able to afford on your own. This relates to the risks you may face as a result of an accident, illness, death, or damage to property you own.

How Does Insurance Work?

When you buy insurance, you make a payment to the company. These payments are called " premiums."In return, you are protected from certain risks. The company agrees to pay you for any losses if they occur. Insurance is based on the idea that spreading the risk of loss, such as fire or theft, among many people makes that risk lower for everyone.

Insurance companies have many clients. They all pay a premium. Not all clients will experience losses at the same time. When a loss occurs, they may get insurance money to pay for the loss.

Not everyone should buy it, but it's a good idea to buy insurance when you have a lot of financial risk or a threatened investment. However, when a third party has a financial interest in the property, as is the case when a bank holds a mortgage, usually having insurance is a requirement for loan approval.

Notes

Some insurances are supplemental, while other insurances, such as car insurance, may have minimum requirements set by law.

Why do banks require you to be secured?

Some insurance is not required by law. Lenders, banks, and mortgage companies will require it if you borrow money from them to make a high-value purchase, such as a house or car.

To buy a car or house on a loan, you must have insurance for it. You will need car insurance if you have a car loan and home insurance if you have a home loan. It is often necessary to qualify for a loan for a major purchase such as a home. Lenders want to make sure that you are protected from risks that could cause the value of your car or home to decline if you incur a loss before paying it off.1

Getting a good insurance price

The premium is the amount of money that will be charged by the insurance company in return for the Financial Protection provided by your policy. You can pay it monthly, every six months, or once a year.

To lower your premiums, look for several companies or use a broker who can do the searching for you. Find out which companies can provide the best rates by getting at least three offers. Based on how claims are handled and the insurance company's risk assessment, rates will vary.

Notes

If you let your car or home insurance expire, the lender will add their own insurance and charge you a fee on top. This is not a good idea. Lender's insurance is more expensive than a policy you would buy yourself.

Some companies may have discounts aimed at attracting certain types of clients. How well your profile matches the profile of the insurance company will affect how good your rates will be

When Should You Buy Insurance?

There are three main reasons why we should buy it:

This insurance is required by law, as is legal liability insurance for our cars.

This insurance is required by lenders, such as when buying a home and getting a home insurance policy.

Financial losses can exceed our ability to pay or recover easily. For example, if we have expensive computer equipment in our apartment, we will want to buy renters insurance.

5 Basic Types Of Personal Insurance

When most people think about personal insurance, they probably think of one of these five main types, which include:

Housing insurance, such as home, condo, or rental insurance.

Car insurance and protection for other vehicles such as motorcycles.

Boat insurance, which can be covered by home insurance in some situations, and self-contained boat insurance for boats of a certain speed or length that are not covered by home insurance.

Health insurance as well as life and Disability Insurance.

Legal liability insurance, which can be included in any of the above groups. This insurance protects us from a lawsuit if someone else suffers a loss caused by our fault.

Although we may be able to get several policies from one company, it is not guaranteed. Insurance requires a permit and is divided into certain groups. This means that before someone is legally allowed to sell it or give advice to us, they must have permission from the state to sell and give advice on the type of insurance we buy.

For example, your broker or home insurance agent may say that they do not offer life or disability insurance. They may be able to refer us to an agent in their neighborhood who has the proper permits to sell US policies.

Notes

If we can buy more than one type of policy from the same person, we may be able to "bundle" our insurance and get a discount on it.

What does the housing policy cover?

Homeowners insurance covers buildings on our property. It includes our main residence along with other structures in the area. It also includes the contents of our residence, movable property stored in our home, living expenses if we need to leave the house after a loss, and liability protection.

Renters insurance covers our property stored in our rental unit as well as living expenses if we have to leave the house due to a loss. It also includes personal responsibility at home and around the world.

Condo or co-op Insurance is similar to renters insurance. In addition to our personal property, cost of living, and liability, this insurance also covers some very specific things to owning a unit or share in a building.

Note: it is always important to check the small details in your insurance policy, as not all policies are created equal.

Car, Boat and other vehicle insurance

Car, boat and other vehicle insurance offers many protection options. The most basic is liability insurance. This protects our liability for the ownership or operation of a vehicle or vessel. There are also additional protections that we can buy, such as protection for damage to the vehicle or ship itself, and its parts. Options for medical payments to others, and death benefits from accidents or injuries resulting from the operation of a vehicle, may also be included as additional or mandatory, depending on the state's financial liability law or minimum car insurance requirements.

In a formal Indonesian translation and is often used in formal or office situations:

When Should You Buy Insurance?

There are three main reasons why we need to buy it:

Insurance is required by law, as is liability insurance for our cars.

Insurance is required by lenders, such as when buying a home and getting a home insurance policy.

Financial losses can exceed our ability to pay or recover easily. For example, if we have expensive computer equipment in our apartment, we will want to buy renters insurance.

5 Basic Types Of Personal Insurance

When most people think about personal insurance, they probably think of one of these five main types, among others:

Housing insurance, such as home, condo, or rental insurance.

Car insurance and protection for other vehicles such as motorcycles.

Boat insurance, which can be covered by home insurance in some situations, and self-contained boat insurance for boats of a certain speed or length that are not covered by home insurance.

Health insurance as well as life and Disability Insurance.

Liability insurance, which can belong to any of the above groups. This insurance protects us from a lawsuit if someone else suffers a loss caused by our fault.

Although we may be able to get several policies from one company, it is not guaranteed. Insurance requires a permit and is divided

Lokasi:

Berbagi :