An insurance policy is a contract made between a company, backed by an underwriter, and an individual to provide coverage when certain conditions occur. The insured person named in the policy pays premiums to the company for the protection. Most policies have a deductible, a limited amount that the insured must pay prior to insurance company payments. The deductible influences the amount of the premiums.
Health Insurance
The Centers for Disease Control and Prevention reported that approximately 65 percent of Americans had private insurance in 2008. Types of health insurance coverage, according to a 2009 report by the U.S. Census Bureau, include employee-based, direct purchase (privately purchased policies) and the government-run plans of Medicare, Medicaid and military health care.
Automobile Insurance
Automobile insurance is available to cover bodily injury of the driver and passengers, payments of medical bills of the driver and passengers (also known as personal injury protection coverage), property damage liability and collision with other cars or damage due to roadways. Comprehensive coverage from theft or damage created by weather, natural disaster, animals or vandalism, as well as uninsured and underinsured motorists, are also options for coverage. Policy rates take into consideration the number of accidents and tickets on the driver's record, geographic region, number of miles driven, age of the drivers on the policy and type of car driven. State Farm and All State Insurance Groups write the majority of automobile insurance policies in the United States.
Homeowner's & Renter's Insurance
Homeowner's insurance protects houses, boat, mobile homes and condominiums. It offers coverage for the structure (including detached garages and sheds), contents inside the home (such as clothing, furniture and personal items) and injuries to people on the property. Insurance riders allow individuals to increase coverage on specific items, such as art work, jewelry or collections.
Renter's insurance covers the individual's property located inside a rented house, apartment, boat or condominium.
Life Insurance
The basic types of life insurance include whole and universal life. Whole life insurance offers a guaranteed policy value for the life of the individual, as long as the premiums continue to be paid. Whole life policies may pay dividends. Whole life premiums are less for younger policy holders.
Universal life is a policy that incorporates elements of flexibility, including the amount of the coverage. This type of life insurance is used primarily to provide for others in the event of the death of the policy holder.
Long-Term Care Insurance
As the Baby Boomer generation ages, the types of long-term care insurance policies and the number of people purchasing this type of insurance have increased. The U.S. Department of Human Services states that "long-term care" may involve services in assisted living homes, nursing facilities, at home or in the community. Custodial care, the most common type of long-term care, is not covered under Medicare, according to the USDHS. Private policies must be purchased for this type of care.
Disaster Insurance
The Insurance Information Institute lists earthquake, flooding and hurricane as special categories for optional coverage for individual insurance policies for homes, personal goods and automobiles. Most auto and homeowner plans exclude coverage during these natural disasters. The U.S. government funds flood insurance through local insurance agents under the National Flood Insurance Program, and most homeowner's insurance companies sell additional policies to cover earthquake and hurricane damage. A moratorium on writing these policies is in effect immediately after such a disaster. The state of California, under the California Earthquake Authority (CEA), offers a "publicly managed, largely privately funded entity," but only 12 percent of state homeowners have earthquake insurance.
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