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.
