The 4 main types of insurance coverage are life, health, auto, and home insurance. You will need auto insurance to finance or lease a car, home insurance to take out a mortgage, health insurance to avoid a fee in some states, and life insurance to protect your family if you pass away.
4 Main Types of Insurance
Life Insurance
This type of coverage is meant to provide for your family and cover funeral expenses after you’ve passed away. Life insurance can replace lost income, pay debts, and help pay for other costs your loved ones may incur. Generally, the younger and healthier you are, the cheaper this coverage is.
Health Insurance
This insurance covers your healthcare costs including medical and surgical expenses if you are sick or injured. Health insurance is usually included in employer contracts but can be purchased independently.
There is a monthly premium for health insurance along with a deductible, which is the amount you must pay out of pocket when making a claim. Some health insurance companies also charge co-pays for certain services.
Auto Insurance
This insurance generally covers liability claims filed against you. You can also add collision coverage to repair or replace your car in the event of a collision or comprehensive coverage to protect your car from non-collision damage. Auto insurance costs vary widely by location, age, and driving history.
Home Insurance
This coverage will protect your home, which is the most valuable asset for most families. Home insurance covers damage to your property as well as liability claims filed against you for injuries occurring on your property. Most lenders require a home insurance policy to take out a mortgage, but even if they don’t, it is a good idea to have a policy regardless.
To learn more about your options, check out WalletHub’s insurance comparison tool.
This answer was first published on 02/11/22. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
The Basics of an Insurance Contract
Declaration Page. Insuring Agreement. Exclusions. Conditions.
What are the 4 parts of an insurance policy? ›
The Basics of an Insurance Contract
Declaration Page. Insuring Agreement. Exclusions. Conditions.
What are the 4 types of insurance everyone should have and explain each of them? ›
Life insurance will help provide financially for your survivors. Health insurance protects you from catastrophic bills in case of a serious accident or illness. Long-term disability protects you from an unexpected loss of income. Auto insurance prevents you from bearing the financial burden of an expensive accident.
What are the four major categories of coverage in homeowners insurance? ›
Coverage A — Dwelling. Coverage B — Other Structures. Coverage C — Personal Property. Coverage D — Loss of Use.
What is the coverage type in insurance? ›
Insurance coverage refers to the amount of risk or liability that is covered for an individual or entity by way of insurance services. The most common types of insurance coverage include auto insurance, life insurance and homeowners insurance.
What are the 4 Ps of insurance? ›
Marketing has the 4 Ps which are product, price, placement and promotion. In the insurance industry, the products are the policy documents, the wordings of which are fixed and cannot be changed by any insurance company.
What are the 4 elements of an insurance contract? ›
Lesson 2 Review. There are four necessary elements to comprise a legally binding contract: (1) Offer and acceptance, (2) consideration, (3) legal purpose, and (4) competent parties. The effective date of a policy is the date the insurer accepts an offer by the applicant "as written."
What are the four general insurance? ›
Different types of general insurance include motor insurance, health insurance, travel insurance, and home insurance.
What are the five main insurance? ›
Home or property insurance, life insurance, disability insurance, health insurance, and automobile insurance are five types that everyone should have.
How many categories of insurance are there? ›
The most important types of insurance are auto, home, renters, umbrella, health, long-term care, disability and life. Assessing your personal insurance needs and budget constraints with an insurance agent can help you determine which policies to buy and how much coverage you need.
Plans in the Marketplace are presented in 4 health plan categories: Bronze, Silver, Gold, and Platinum. (“Catastrophic” plans are also available to some people.) Health plan categories are based on how you and your plan split the costs of your health care.
What are the four basic insurance coverage categories in an automobile policy? ›
auto liability coverage. uninsured and underinsured motorist coverage. comprehensive coverage. collision coverage.
What is the most common basic homeowners insurance policy? ›
HO-3. The most common type of homeowners insurance is the HO-3 policy, which covers your home, your personal property, liability, additional living expenses and medical payments.
What are the four kinds of insurance coverage list and explain in general terms? ›
The 4 main types of insurance coverage are life, health, auto, and home insurance. You will need auto insurance to finance or lease a car, home insurance to take out a mortgage, health insurance to avoid a fee in some states, and life insurance to protect your family if you pass away.
How do I know if my insurance is HMO or PPO? ›
However, if you've already got a health plan and don't know which plan type you have, you can check your insurance card or contact your insurance provider directly. If you have an online account through your provider that allows you to access plan details, you can also start there.
Why do doctors prefer PPO? ›
Doctors often prefer PPOs because they offer greater reimbursem*nt rates compared to HMOs and have less administrative paperwork. Is a PPO a good thing? For many, a PPO's flexibility and coverage make it a favorable choice, but it comes with higher premiums.
What is the four corner rule of insurance policy? ›
As a general matter, to determine an insurer's duty to defend, courts follow the “four corners rule,” which provides that an insurer's duty to defend must be determined by comparing the allegations in the complaint with the policy's provisions, without regard to extrinsic evidence or facts.
What are the primary components of an insurance policy? ›
Three components of any insurance type are the premium, policy limit, and deductible.
What are the 5 C's of insurance? ›
In this article, I outline a 5C framework to help executives formulate their transformation plan. The 5Cs of transformation in insurance are – communication, customization, connection, cognition and consensus.
