Insurance is a broad topic that includes protections of homes, cars or boats, personal health, and life itself. It is designed to protect against financial loss resulting from unforeseen circumstances by sharing or pooling the risk of loss with other policyholders.

Frequently Asked Questions
  • How do insurance companies make money?

    Insurance companies generate revenue from premiums paid on outstanding policies and net profit on the difference between revenue and policy claim expenses.

  • How does an insurance broker make money?

    Insurance brokers typically earn commissions on the sale of policies, either on a flat rate per policy or on a percentage of the insured amount.

  • Why do insurance policies have deductibles?

    Insurance policies often have deductibles, especially with health and auto insurance, in order to partially offset the cost of providing coverage by the company and can keep premiums lower if customers opt for higher deductible amounts.

  • Do men and women pay the same for insurance coverage?

    There is definite gender bias in insurance coverage depending on type of insurance. With auto insurance there can be gender discrimination tied to income and credit scores, while with life insurance women generally pay lower rates due to longer life expectancy.

  • Can bundling insurance policies save money?

    Yes, insurance carriers typically offer significant discounts for those who have multiple types of coverage with their company, such as bundling car and homeowners insurance.

Key Terms
Cheerful Young Family Standing In Front Of House
GEICO vs. Progressive
Person in blue shirt with hands on their face in front of a computer
Why Your Unemployment Check or Direct Deposit Is Late (and What to Do About It)
Cellphone Insurance
Best Cellphone Insurance
Pilot flying tourists in airplane
Best Aircraft Insurance
Woman driving jetski on the open water
Best Jet Ski Insurance
Young man standing by electric bicycle using smartphone
The Best Ebike (Electric Bike) Insurance in 2022
White-haired woman and nurse sit on a couch, going over paperwork
Gender and Insurance Costs
Owner of antique shop talking with customer in his store
Best Collectibles Insurance
Family in the city
Best Casualty Insurance
Young woman taking care of her dog
Figo vs. Trupanion
Young teenage girl sitting on her bed and using laptop computer while studying, doing homework
Best Laptop Insurance
Cute happy dog playing with a stick
Trupanion vs. Healthy Paws
Young woman sitting with her pet dog and using laptop at home
Figo vs. Healthy Paws
Potbellied pig
Insuring Your Parrot, Ferret, Potbellied Pig, or Horse
Buffet line of lunch and dinner. Buffet self-service food
Best Event Insurance Companies
Unemployment benefits application form
Federal Pandemic Unemployment Compensation (FPUC)
Black cars at a funeral
What Is Final Expense Insurance?
Reinsurance Explained: What It Is, How It Works, Types
Reinsurance Definition, Types, and How It Works
Underwriter in Finance: What Do They Do, What Are Different Types?
Underwriting: Definition and How the Various Types Work
Indemnity: What It Means in Insurance and the Law
Insurance Claim
Insurance coverage
Insurance Coverage: Major Types and How They Work
Midsection of Businessman Explaining Insurance Policy to Customer in Office
Insurance Premium Defined, How It's Calculated, and Types
Insurance Underwriter: Definition, What Underwriters Do
Hand putting wooden five star shape on table. The best excellent business services rating customer experience concept
Insurance Score
Rider: Definition, How Riders Work, Types, Cost, and Example
Construction workers silhouetted against the sun
What Is a Waiver of Subrogation? Types and Reasons For Needing
Combined Ratio: Definition, What It Measures, Formula, Examples
You Should Sign Here!
Facultative Reinsurance: Definition, Vs. Treaty Reinsurance
Close up of Life Insurance Policy with pen, calculator.
Reinsurance Ceded: Definition, Types, Vs. Reinsurance Assumed
A couple are in a meeting with a financial advisor.
Statutory Reserves
Peril vs. Hazard: What's the Difference?
A white collar worker in suit and tie tear contract.
Can Your Insurance Company Cancel Your Policy Without Notice?
A businesswoman meets with client.
Bancassurance
An agent pointing finger on insurance policy paper.
Cover Note
Cross-Liability Coverage
What Are Deferred Acquisition Costs (DAC)? Definition
Ex Gratia Payment
Out-of-pocket expenses
Out-of-Pocket Expenses: Definition, How They Work, and Examples
Runoff Insurance
livestock insurance agent for Takaful Insurance
What Is Takaful Insurance and How Does It Work?
A midsection of businesswoman stacking coins on desk in office.
Earned Premium
People walking on an interior glass bridge next to skyscrapers.
Quota Share Treaty
Comprehensive Glass Policy
Top 10 Insurance Companies by the Metrics
Facultative vs. Treaty Reinsurance: What's the Difference?
Corporate Building
Insurance Companies vs. Banks: What's the Difference?
4 Types of Insurance Policies and Coverage You Need
Person Sitting at Office Desk Presenting Ballpen and Contract
Unearned Premium
Financial advisor having a meeting with clients
Excess of Loss Reinsurance Definition and How It Works
Factors That Influence Insurance Premiums
How to Calculate Insurance Premiums
Premium: Definition, Meanings in Finance, and Types
Insurance Policy
How Do Insurance Companies Make Money? Business Model Explained
DuPont Return on Equity Analysis
Credibility Theory
A pair of crashed cars
Compensatory Damages: Definition, Types, and Examples
Claims Reserve: Definition in Insurance, Purpose, and Example
access bank door
Savings Association Insurance Fund (SAIF)
Middle aged couple talking to Financial Advisor -
Is Loan Protection Insurance Right for You?