Insurance is a way to protect yourself against unforeseen negative life events, such as theft, car accident, fire, death, or flood. An insurance policy is a legal contract between you and your provider that says when you experience a loss that is covered by your policy terms and you file a claim, the insurance company will pay you or your listed beneficiary as agreed by the policy terms.
While the insurance company can’t undo disasters, they do have the ability to help you financially recover and keep your life moving forward. You pay into a larger fund with other policy holders. The premiums (or payments) made by policy holders is invested and providers agree to pay policyholders if a claim is made, and the insurance company determines how much money they are willing to pay to you to make the needed repairs.
Common types of insurance are car insurance, home insurance, renter’s insurance, life insurance, heath insurance, dental insurance and vision insurance, just to name a few.