Insurance is essential but with so many options it's hard to know what you need. In this post we explore the 4 main types of insurance and why you need them.
The only predictable thing about life is that it’s always unpredictable – in both welcome and less-than-welcome ways. Fortunately, there are resources to help you prepare for the negative effects of life’s unexpected curveballs. As the old saying goes, luck favors the prepared. So, how can you be ready for an unexpected expense? This is where insurance comes into play. Let’s take a closer look at insurance: what it is, the most common types of insurance, and why it’s worth considering.
Insurance is essentially a safety net that protects the insured from financial loss in various facets of life. In simple terms, as defined by Invest, insurance is a “contract that transfers the risk of financial loss from an individual or business to an insurance company.” Insurance companies collect small amounts of money from those that they are insuring to create larger sums that they use to pay out to those individuals or businesses that may otherwise experience a financial loss. Since most insurance policies cover catastrophes or negative events, it’s natural to hope that you’ll never actually need to use the insurance you pay for. However, it’s reassuring to know the safety net is there if you ever need it.
While there are a plethora of insurance options that cover everything from pets and concert tickets to travel arrangements and rental agreements, some types of insurance are more common than others. Below is a list of four types of insurance that you are likely to come across, what they help with, and why you should consider them.
If you own a car, truck, motorcycle, or another vehicle, auto insurance is extremely important. First and foremost, you’re legally required to have it. So, if you’re going to operate a motor vehicle, it’s in your best interest to acquire car insurance. This type of insurance helps to cover costs in case of car accidents, theft, vandalism, or damage caused by natural disasters such as flooding or hurricanes. Whether the damage is your fault, the fault of someone else, or the result of an outside force, car insurance can help you avoid costly expenses.
The cost of car insurance ultimately comes down to individual circumstances and the level of policy you select. The type of car, age of the insured, and past driving record are all factors that contribute to the cost of car insurance. It’s also worth noting that rates can vary from one insurance company to another, so be sure to shop around to find the best deal.
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GST taxpayers can't claim any pending input tax credit if this return is not filed by November 30, 2024 for FY 2023-24
