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Understanding Insurance

Explore our understanding insurance articles to learn everything you need to know.

Insurance BasicsUnderstanding Insurance+3

What is Insurance? A Beginner's Guide to Understanding Coverage

What is Insurance? A Beginner's Guide to Understanding Coverage

Confused about insurance? This beginner's guide breaks down the core concepts of insurance, including premiums, deductibles, and how coverage truly works, to help you understand this essential financial protection.

IE
Insurance Expert
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Insurance TermsInsurance Glossary+3

Top 10 Common Insurance Terms Explained (Glossary for Beginners)

Top 10 Common Insurance Terms Explained (Glossary for Beginners)

Demystify insurance jargon! This essential glossary explains the top 10 common insurance terms in plain language, empowering beginners to understand their policies better.

IE
Insurance Expert
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Insurance PolicyUnderstanding Insurance+3

A Beginner's Guide to Reading and Understanding Your Insurance Policy

A Beginner's Guide to Reading and Understanding Your Insurance Policy

Demystify your insurance policy! This beginner's guide breaks down complex jargon, helping you read and understand your coverage, terms, and exclusions with confidence.

IE
Insurance Expert
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Universal Life InsuranceCash Value Life Insurance+3

Universal Life Insurance Explained: Flexibility and Cash Value

Universal Life Insurance Explained: Flexibility and Cash Value

Demystify Universal Life (UL) insurance, understanding its unique flexible premiums and tax-deferred cash value growth to determine if this policy suits your needs.

IE
Insurance Expert
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Insurance ExplainedInsurance Coverage+3

What is Insurance? A Beginner's Guide to Understanding Coverage

What is Insurance? A Beginner's Guide to Understanding Coverage

Demystify insurance! This beginner's guide explains core insurance concepts, breaking down how coverage protects your finances and offers peace of mind. Understand the essentials.

IE
Insurance Expert
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Insurance BasicsInsurance CoverageFinancial PlanningBeginner GuideAuto InsuranceCar InsuranceLiability CoverageComprehensive CoverageCollision CoverageOpen Enrollment Period

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Frequently Asked Questions About Understanding Insurance

Insurance is a contract between you and an insurance company that provides financial protection against specific losses or risks. You pay a premium, and in return, the insurer agrees to cover certain costs if a qualifying event occurs. You need insurance to protect yourself from potentially devastating financial losses that could result from unexpected events like accidents, illnesses, natural disasters, or liability claims.
A deductible is the amount you pay out-of-pocket before your insurance coverage begins. For example, if you have a $500 deductible and experience a $3,000 loss, you'll pay the first $500, and your insurance will cover the remaining $2,500. Generally, choosing a higher deductible results in lower premium payments, while a lower deductible means higher premiums but less out-of-pocket expense when you file a claim.
Insurance premiums are calculated based on several factors, including: your risk profile (age, health, driving record, etc.), coverage amount and type, deductible level, location (different regions have different risk levels), claims history, credit score (in many states), and industry data on similar risks. Insurance companies use statistical models to determine the likelihood you'll file a claim and price your policy accordingly.
An insurance agent represents one or more specific insurance companies and sells policies on their behalf. They work for the insurer and are typically paid through commissions. An insurance broker, on the other hand, works for you (the client) and shops around different insurance companies to find you the best coverage and rates. Brokers typically have access to more options but may charge fees or still earn commissions from insurers.
To file an insurance claim: 1) Report the incident immediately to your insurance company through their website, mobile app, or by calling their claims department. 2) Document everything related to the incident (photos, videos, police reports, medical reports). 3) Fill out the claim forms provided by your insurer with accurate information. 4) Submit all required documentation. 5) Work with the assigned claims adjuster who will evaluate your claim. 6) Follow up regularly until your claim is resolved.