There are many insurance plans available to provide coverage for various types of damage or accidents. All families must have at least one of these three.
Types of Homeowners Policies
Homeowners insurance falls into one of six categories. HO-1 and HO-2, as they are more commonly known, cover only property against specifically listed damage. These policies vary in what damages are covered and none protect belongings located on the property. HO-2 forms offer more coverage than an HO-1.
HO-3 protects against all kinds of damage, not just the ones specifically listed. It also protects a select list of belongings located within the structure from specific damage.
HO-4 and HO-6 cover belongings only. Renters use these policies because the owner or management company has coverage for the home. Like HO-1 and HO-2, HO-6 offers more protection than HO-4 and is more expensive.
HO-5 is similar to HO-3 in that it covers both property and personal belongings. The difference is that HO-5 covers all belongings, not just a few. It’s also more expensive than some of the others, but well worth it.
Types of Medical Options
Health insurance is another common form of insurance, and just like with homeowners, there are different types for you or your employer to choose from.
Health Maintenance Organization, or HMO, is one of the most widely used types. This plan allows you to choose from a network of providers and also includes preventive care. However, you must be referred by your primary care physician to see a specialist. There is also a small copay that you must pay at each appointment.
The Preferred Provider Organization, or PPO, also has a network of doctors available. Unlike an HMO, you don’t have to choose a primary care provider. You can see any doctor, or even a specialist, as long as they are in the network. Also, you do not need to have a referral to change your doctor. As with other plans, each visit requires a copay.
The Exclusive Provider Organization, or EPO, works much like HMOs and PPOs. These cost less and have a network of providers available. However, unlike a PPO, where an out-of-network doctor’s 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 a PPO. POS requires assignment of a primary care provider, 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 the terms of your loan and state requirements, some options may not be available to you.
Liability plans cover damages and medical bills in case the accident is considered your fault. It only covers damage to the other person’s property, as well as any of his medical bills. Most states require this as a minimum coverage. It is also the cheapest 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 doesn’t have a bond. In the event your vehicle is totaled, your plan covers the value of your car. This policy is required for those with lien holders.
Comprehensive coverage covers anything that is not related to an accident, such as having your vehicle stolen or hitting a deer. For most link holders, this is a requirement.
The uninsured motorist is something everyone should consider. While most states require at least liability coverage, some drivers don’t keep plans long after they get their license or plates. This policy protects you in case someone else causes damage and you don’t have a plan in place to pay for the repairs.
