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Insurance Basics

Just about anything can be insured. It may seem like the types of coverage offered by insurance companies have no end. Most of us are familiar with the common types of insurance. Insurance plans can protect assets through liability insurance coverage and bring peace of mind in various scenarios.

This section addresses frequently asked questions about insurance products offered by insurance providers. Regardless of which type of insurance interests you, this section should provide helpful guidance or address issues you may have with policies already purchased.

FindLaw's Insurance Basics section provides an overview of how insurance coverage operates. It explains the insurance products available to consumers and what to do if you need help with insurance issues.

Insurance 101

Insurance is a way to protect against losses, pay for preventive care to keep you healthy, bring peace of mind, or even provide for loved ones after your death. From a legal standpoint, insurance is a contract.

The parties to the contract are the insurer and the insured party. Insureds agree to pay premiums and the insurer agrees to cover your losses and shield you from personal liability within policy limits.

As with any other contract, the insurer's responsibilities are defined. Sometimes, coverage or exclusion is obvious. At other times, you may need help interpreting policy language. It's critical to understand what is covered and what is not. You want to make sure you have the insurance coverage that you intend.

In addition to premiums, you may also be subject to a deductible. A deductible is the amount you must pay out-of-pocket before receiving insurance benefits.

What Can Be Insured?

Most items in which you have an insurable interest may be insured. An insurable interest is something or someone that benefits you and would negatively impact your interests if it were lost, damaged, or otherwise diminished. 

For example, you cannot take out an insurance policy on your neighbor's house since you don't have a direct stake in that house. You don't have an insurable interest in their house.

Common types of insurance include:

Each type of insurance has its own general rules, coverages, limitations, and ways the claims process works.

Regulations and Insurance Law

Insurance regulations are in place to provide protection. They require certain disclosures to allow for consumer transparency. Other regulations seek to keep insurers honest while also encouraging a competitive marketplace. 

Each state has an insurance department to oversee the insurance industry. Consumers can also file complaints with these entities.

An insurance agent is the common first contact for insurance information. They can advise you about specific terms and insurance costs for the type of policy that you or a family may need.

The contractual obligations of the insurance policy legally bind your insurer. When a policyholder files a claim, the terms and the claim's legitimacy are sometimes subject to disagreement. These disputes can sometimes lead to legal action. An insurance bad faith claim is a common cause of action stemming from a conflict over insurance coverage.

Insurance coverage issues lead to disputes involving some of the most sophisticated law firms in the world. It should surprise no one that insurance coverage matters are often too complicated for the average policyholder to handle without help.

You Don't Have To Solve This on Your Own – Get a Lawyer's Help

Meeting with a lawyer can help you understand the best insurance options for you and your family members. They can explain how to protect your rights best. Visit our attorney directory to find a local insurance lawyer near you who can help.

Learn more about how insurance works, the various types of insurance available, government regulations, legal requirements, and related topics by clicking the link below.

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You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

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