Everyone needs to insure their car, their home, and their health. People also need life insurance to ensure that those they leave behind will be taken care of in the event of an early death. But what about other types of insurance?
Here are some common types you may have heard about but not know what exactly they cover:
Table of Contents
Business Insurance
Business insurance is a broad term that covers many different types of coverage. It’s important to understand what business insurance covers and how to get the right coverage for your needs.
Business insurance can help protect your company from accidents, injuries, and lawsuits. Some common business insurance claims include:
- Property Damage – This type of claim occurs when someone damages or destroys property that belongs to you or your company, such as damage caused by fire or storm damage at a location where you store inventory or equipment.
- Equipment Breakdown – Equipment breakdown occurs when something breaks down permanently due to normal wear-and-tear or an accident that was not covered under warranty (such as dropping it).
- Employment Practices Liability (EPLI) – This type of claim protects employers against lawsuits based on wrongful termination, sexual harassment/assault/battery, etc.
Media Liability Insurance
Media liability insurance is a type of insurance coverage that protects individuals and businesses in the media industry against lawsuits related to their professional services. This type of insurance is designed to cover claims of defamation, invasion of privacy, copyright infringement, or other types of legal disputes that can arise from the creation or distribution of media content.
Media liability insurance can be especially important for media professionals who work in high-risk areas, such as news reporting, advertising, or entertainment. By obtaining media liability insurance, these professionals can mitigate their legal and financial risks and protect their reputation and assets in the event of a lawsuit.
Home Insurance
Home insurance is a type of insurance that protects your home and its contents against damage or loss. It also covers costs associated with injuries to people who live in your home, as well as liability claims that may arise from incidents on the property.
According to a Bankrate report, data from 2020 shows a significant majority of homeowners, around 93%, possess an active policy for homeowners insurance. Although homeowners insurance is not mandatory as auto insurance, it is often mandatory for mortgage borrowers to obtain coverage.
The price of homeowners insurance varies, depending on various individual factors such as the state of residence, the cost of rebuilding the home, and prior claim records. However, obtaining multiple rate quotes can assist in finding the most affordable policy for your specific circumstances.
Homeowner’s insurance policies are available through many different carriers, but they all share common features, such as:
- They’re issued by private companies.
- They cover losses caused by fire, windstorms, theft, or other causes (including earthquakes).
- They specify what’s not covered.
- They set out how much money you’ll receive if something happens to one of your possessions.
Auto Insurance
Auto insurance protects you and your vehicle against physical damage, theft, and other losses related to a car accident. The most common types of auto insurance coverage include liability, collision, and comprehensive coverage.
Liability insurance pays for damages caused by the insured person’s negligence or fault when they are at fault in an accident. Collision coverage pays for repairs after an accident involving your vehicle only (not other people’s vehicles). Comprehensive coverage covers other types of losses, such as fire damage or vandalism, that aren’t related to accidents with other cars on the road.
According to car insurance statistics by The Zebra, the average premium for car insurance in the United States is $1,548. Since 2011, there has been a 29.6% national increase in rates. However, the percentage of increase varies by state and city. In some American cities, the average annual rates have surpassed $6,200, which is over four times the national average.
Life Insurance
Life insurance is a financial product designed to pay out a sum of money in the event of the death of the insured person. The amount you receive depends on how much coverage you choose, how long you want it to last, and whether or not there are any exclusions or riders attached to your policy (which can add more costs).
According to Forbes, around 75% of American adults possess some type of life insurance. Women (22%) are twice as likely as men (11%) to be without life insurance. And most Americans consider life insurance as a way to safeguard their families against unpaid debt.
Life insurance can be used for other purposes than just paying out upon death. You should purchase life insurance if someone depends on your income. For example, if they’re still in school or have medical bills left over from an accident.
In this case, buying enough coverage so that the deceased’s dependents would not need money from any other source could make sense for everyone involved.
Disability Insurance
Disability insurance is a type of insurance that replaces your income if you’re unable to work due to injury or illness. The goal is to help protect against loss of wages and other financial expenses in the event of an injury or illness that makes it impossible for you to work.
It’s important to note that disability insurance isn’t designed to pay out just because someone gets hurt. It only kicks in when there’s evidence that their impairment prevents them from working at all (or even part-time).
Disability benefits can also be paid out if an employee dies while employed, though these payments are typically made through life insurance rather than disability coverage.
Conclusion
Now that you know the different types of insurance, it’s time to start thinking about what type is right for you. You may not need all of them or even any at all.
But if something bad happens and you don’t have any coverage, that could be a big problem. Insurance helps protect against losses, so they don’t become bigger problems down the road.
