5 Things You Need to Know About Insurance

Life can be quite unpredictable. You never know when an accident is going to occur that leaves you hurt or your finances at stake. Maybe a spark in a home outlet leads to fire damage that needs to be repaired. A bad rainstorm could back up the local water system, backing up sewage into the house. A vehicle could cut you off and cause an accident. A theft could occur at the business you own, resulting in a loss of revenue. 

There is an entire industry dedicated to protecting people and their assets in the event of unpredictable circumstances. The insurance industry in this country is massive. People crave protections against unfortunate circumstances that can put their health, possessions, businesses, or finances in danger. 

Unfortunately, the realm of insurance can be vastly complicated. From understanding premiums to filing claims to appealing wrong decisions, there is a lot to know about the world of insurance, especially if you want to get what you have paid for. Let’s discuss five things you need to know about insurance.

Types of Insurance

Life itself is complicated, so it makes sense that there are many different areas of insurance that people can pay for. Car insurance can protect your vehicle in the event of damage from a collision. Home insurance typically covers damage to a residential property from unexpected circumstances. Health insurance is all about covering people for ongoing care and health conditions. Business insurance protects the assets of a company from random events like theft, lawsuits, or a fire in the warehouse. You can even pay for travel insurance if you have invested a lot of money in a trip and do not want a flight cancellation to waste all that money. Insurance is available for so many circumstances, so discovering its uses could help you mitigate risks in many aspects of life. 

What is a Claim?

Claims are one of the main tactics by which customers receive their coverage. When you are navigating the healthcare system, you may not need to file claims to receive much of the coverage under your policy. However, other types of insurance, or specific circumstances for healthcare, require you to file a claim to receive the benefits. A claim is essentially an application where you provide evidence of the event that occurred and the resulting losses that it caused. The insurance company will then review your claim and reward compensation or some other form of coverage if it is approved. A claim is essentially a formal request to receive the services you have been paying for with the premiums.

What Are Premiums?

Insurance companies wouldn’t make any money if they simply compensated you for what falls within your coverage policy. That is why they charge insurance premiums to keep the policy open. Insurance is almost like betting. You pay a certain amount of money each month, each quarter, or each year, betting on the fact that, at some point, you will need to receive the benefits of that policy. For example, you pay for car insurance with monthly premiums so that if you get into an accident, the policy coverage is activated, and you may only have to pay a deductible for the repairs or car replacement. Insurance companies make their money on these premiums, also betting that these incidents will not happen often, so they may not need to pay out as much as they make from the premiums. 

What is an Appeal?

Sometimes, when you file a claim to receive insurance benefits, your claim could be denied. It could be denied for several reasons, including lack of evidence of the incident, overestimation of the damages suffered, events that are not covered by the policy, or even billing errors from providers. These denials often result in you not receiving the benefits you want. Sometimes, a denied claim is incorrect. Maybe the insurance carrier made a mistake, or they simply think the incident is not severe enough to cover. If you believe your claim has been unjustly denied, then you could file an appeal. This requires the insurance company to explain why the claim was denied. The appeal process can vary, and a VA disability claim appeal will look different from a homeowner’s insurance appeal. The key is to understand your policy and benefits well so you know if you are receiving what is owed. 

Insurance Required By Law

Some types of insurance are completely voluntary, while others are required by law. It may depend on where you live in the United States as well. Health insurance used to be required at the federal level, but this is no longer the case. In every state, some type of auto insurance is required if you operate a vehicle. Additionally, home insurance is a requirement if you choose to buy a house. Other types of insurance, such as business insurance, travel insurance, flood insurance, life insurance, and more, are completely voluntary. 

Insurance Can Be Incredibly Helpful

Although insurance carriers are out to make money, their services are designed to help people. When you understand how this industry works, you can take advantage to make life a little easier and protect your livelihood.