Insurance:
Transfers your risk of a financial loss that you couldn't otherwise afford.
Do not take insurance on something you could afford to pay for.
Premium:
Cost to be covered.
Deductible:
Amount you have to pay to cover loss before insurance kicks in.
If you have a higher deductible, your premiums will be lower.
Types of Insurance
Home
- Guaranteed Replacement vs. Extended Replacement
Renters
- Covers contents of your apartment or house you're renting
Auto
Collision
- covers damage caused by you colliding into something
Liability
- covers damage you cause to others
Comprehensive
- covers damage to car not caused by a collision
Health
Disability
- replaces part of your income if you are unable to work beacause of accident or illiness
Long-term Care
- pays for costs if required to reside in a long-term care facility like a nursing home
ID Theft
- "LifeLock" insures you against identity theft
Life
- provides payments to your beneficiaries after you die to help them financially
Umbrella
- liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies. When an insured is liable to someone, the insured's primary insurance policies pay up to their limits, and any additional amount is paid by the umbrella policy (up to the limit of the umbrella policy).
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