The Basics of Insurance.

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurer. The purpose of insurance is to protect the insured from bearing the brunt of an unexpected loss. Insurance policies are designed to cover specific risks. Some policies cover only one risk, while others cover multiple risks. The most common types of insurance policies are:

• Health insurance
• Life insurance
• Disability insurance
• Homeowners insurance
• Renters insurance
• Auto insurance

Most insurance policies have certain features in common, such as premiums, deductibles, and limits. Premiums are the amount of money that policyholders must pay to maintain their coverage. Deductibles are the amount of money that policyholders must pay out-of-pocket before their coverage kicks in. Limits are the maximum amount that an insurer will pay under a policy. In order to receive coverage, policyholders must usually meet certain conditions, such as being up-to-date on their premium payments and not having any pre-existing conditions. When policyholders file a claim, they must submit documentation, such as bills and police reports, to their insurer. The insurer will then determine whether the policyholder is eligible for coverage and, if so, how much they will receive. Insurance can be a complex and confusing topic, but understanding the basics can help make it more manageable. By knowing what to look for in a policy and what to expect when filing a claim, policyholders can be better prepared to navigate the world of #insurance.