The Three Most Common Types of Insurance
There are many insurance plans available to offer coverage for various sorts of damage or accidents. All families should have at least one of these three.
Types of Homeowners Policies
Homeowner’s insurance falls under one of six categories. HO-1 and HO-2, as they are more commonly known, cover only the property against specifically listed damage. These policies vary as to what damage is covered, and neither protects belongings located on the property. HO-2 forms offer more coverage than an HO-1.
HO-3 protects against all types of damage, not just specifically listed damage. It also protects a select list of belongings located within the structure from specific damage.
HO-4 and HO-6 cover only belongings. Renters use these policies as the landlord or management company holds coverage on the dwelling. As with HO-1 and HO-2, HO-6 offers greater protection than HO-4 and is more expensive.
HO-5 is similar to HO-3 in that it covers the property as well as personal belongings. The difference is that HO-5 covers all belongings, not just a set few. It is also more costly than some of the others, but it is worth it.
Types of Medical Options
Medical is another common form of insurance, and as with homeowners, there are different kinds for you or your employer to choose.
Health Maintenance Organization, or HMO, is one of the most used types. This plan allows you to choose from a network of providers, and it also includes preventative care. However, you must be referred by your primary care physician in order to see a specialist. There is also a small copay you must pay at each appointment.
The Preferred Provider Organization, or PPO, also has a network of doctors available. Unlike an HMO, you do not have to choose a primary care provider. You can see any physician, or even a specialist, as long as he is in network. Also, you do not have to have a referral to change doctors. As with other plans, each visit requires a copay.
Exclusive Provider Organization, or EPO, works very similar to HMOs and PPOs. These cost less and have a network of providers available. However, unlike a PPO, where an out of network doctor visit is covered up to a point, there is no out of network coverage for these plans.
The Point of Service Plan, or POS, is a hybrid between an HMO and PPO. POS requires a primary care provider assignment, but you can see out-of-network doctors if you are willing to pay a higher copay.
Different Auto Coverage
Auto insurance is also widely used. Depending on your loan terms and state requirements, some options may be unavailable to you.
Liability plans cover damage and medical bills in the event the accident was deemed your fault. It only covers the damage done to the other person’s property as well as any of their medical bills. Most states require this as minimal coverage. It is also the most inexpensive option available.
Collision coverage will pay for repairs to your vehicle in the event of an accident. This type of insurance is worth having, in addition to liability coverage, even if you have an older vehicle that has no lien. In the event that your vehicle is totaled, your plan covers the value of your car. This policy is required for those with lienholders.
Comprehensive coverage covers anything unrelated to an accident like if your vehicle is stolen or you hit a deer. For most lienholders, this is a requirement.
Uninsured motorist is something that everyone should consider. While most states require at least liability coverage, some drivers don’t keep the plans much past getting their license or tags. This policy protects you in case someone else causes damage and doesn’t have a plan in place to pay for repairs.