How Many Types of Insurance are There?
An exhaustive list of the kinds of insurance is difficult to consolidate. That’s because there are perhaps as many types as there are risks to protect oneself from. Insurance companies are also constantly creating new types to meet changing consumer needs. The different types of insurance policies can, however, be divided into three main categories according to what they cover.
You get various types of policies to cover assets from physical perils. Other kinds of insurance exists to cover liabilities. Finally, long-term insurance policies cover death and associated risks.
Categorising Types of Insurance
1. Assets
Insurance policies that protect assets include car, home, household contents, portable possessions, watercraft, hull insurance, and other physical assets. Insurance products that cover a particular asset, protect it from a variety of perils, but the overall aim is to cover total loss or accidental damage. Such perils include explosions, natural disaster, collision, and theft. Generally only high-value items are insured, because the owner has more to lose when high cost assets get damaged.
2. Liabilities
Insurance products for liability may be included in insurance products for assets. Liability insurance policies protect the insured from the repercussions of an action or negligence. Should an insured be legally responsible for causing damage to property or personal injury or death to individuals, then a liability insurance policy will compensate that individual or his or her family members. Liability insurance is often included in other kinds of insurance products, such as car and home insurance.
3. Long-Term
There are various types of long-term insurance, but, as the title indicates, what separates long-term insurance from short-term insurance is that the cover extends beyond the average life of an asset or project. This type of insurance often does not expire, and accumulates in value over that time. Life insurance, dread disease cover and disability cover form part of long-term insurance protecting the insured from perils that may affect him or her for the long-term.
Disability and dread disease cover, for example, often force the insured to make expensive changes in his or her life, such as making alterations on a home for wheelchair access.
Read more about different types of insurance, or get insurance quotes by filling in the form below.
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