Insurance: Its Positive Impact on the Consumers
In the United States, one car accident happens every 18 seconds. Auto insurance protects you against a financial loss if you’re involved in an accident. The extent of coverage depends on the agreement between the company and the policyholder. You agree to pay a premium and the company will pay for the damages as outlined in your auto insurance policy. Auto policies contain several different types of coverage, which are priced differently. Your policy may cover bodily injury liability, property damage liability, collision, comprehensive and uninsured/underinsured motorist coverage.
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Owning a home is expensive, and given all of the expenditures it may be hard to see whether or not homeowners insurance is worth the extra cost. If a home is damaged or someone is injured on the property, homeowners insurance will help cover the financial consequences. Though it is not required by law to have, homeowners insurance is usually required by mortgage lenders in order to borrow money from them. You may also be required by your tentants’ association to have home insurance if you live in a co-op or condo.
For those who live in a rental, coop or condo, renters insurance provides most of the benefits of homeowners insurance. Usually a landlord is responsible for insuring the property against fire and other disasters, however that does not mean personal property is also covered. Especially in a home, it’s what inside that means the most.
Flood insurance is important because it covers what a homeowners insurance policy will not, damage caused by water entering ones home. Whether you reside in an area that is high flood risk or not, a flood can devastate any home. Last year, 25% of homes affected by floods were not in high risk zones. The last thing you want is to lose valuables to a flood because a home insurance policy will not cover damage caused. The Federal Emergency Management Agency’s (FEMA) maps are an invaluable resource for homeowners who live anywhere near water, because if they show that your home sits in a 100-year flood plain, you’ll require federal flood insurance in order to obtain a mortgage. If you live outside a high-risk zone, or if you no longer finance your home, flood insurance is optional, but going without it is a tremendous risk that must be considered.
A life insurance policy protects those who depend on your income. It is a contract between the insured and the insurer, where the insurer is promised to pay a sum of money in exchange for a premium upon the death of the insured. Life insurance can prove to be a valuable tool in situations where financial expenses must be paid, such as paying for a funeral, burial costs and medical expenses not covered by health insurance.