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Common questions or answers

What is insurance?

Insurance is a contract between an individual or business (the policyholder) and an insurance company, where the insurer provides financial protection or reimbursement against losses in exchange for regular premium payments. Insurance is designed to protect against risks such as accidents, theft, natural disasters, illness, or liability.

Why do I need insurance?

Insurance helps mitigate financial losses from unforeseen events, such as accidents, property damage, theft, natural disasters, or lawsuits. It provides peace of mind, protects assets, and ensures compliance with legal requirements (such as auto insurance).

What are the different types of insurance?

There are many types of insurance, including:

Auto Insurance: Covers vehicles against accidents, theft, or damage.
Home Insurance: Protects homeowners against damage to property or liability for accidents.
Health Insurance: Covers medical expenses for illnesses or injuries.
Life Insurance: Provides financial support to beneficiaries in case of the policyholder’s death.
Business Insurance: Protects businesses against various risks, including property damage, liability, employee injuries, and cyberattacks.

What is a premium?

A premium is the amount paid by the policyholder to the insurance company, usually on a regular basis (monthly, quarterly, or annually), to maintain the insurance coverage.

What is a deductible?

A deductible is the amount the policyholder must pay out of pocket before the insurance company covers the remaining costs of a claim. Higher deductibles typically result in lower premium costs.

What does “coverage limit” mean?

The coverage limit is the maximum amount an insurance company will pay for a covered loss. Different types of coverage within a policy may have different limits.

What is an insurance claim?

An insurance claim is a formal request made by the policyholder to the insurance company for payment or reimbursement for a loss covered by the insurance policy. The insurer reviews the claim, and if approved, pays the policyholder or a third party on behalf of the policyholder.