Insurance is regulated on a state-by-state basis, so you can expect the basic coverages to vary as well. Your exact location is a factor in some types of policies, such as home or car insurance, and other types of insurance use statistics based on regional information. When you understand why the basic coverages change you will be better able to maintain the insurance coverages that best fit your individual needs.
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Location Makes a Difference
Your address affects all types of insurance. Auto insurance looks for statistics based on ZIP codes. Some climate zones are healthier than others, and some cities are safer to live in. Natural disasters occur frequently in some parts of the country but are rare in others. Insurance companies use this kind of information to determine insurance premiums, according to the associated risks.
Basic Car Insurance
Most states require you to have minimum insurance that includes bodily injury liability and property damage liability. These two coverages are typically sold as a package, with the option of raising the payable limits on either one. As of March 2011, sixteen states use a no-fault system of auto insurance where each driver's insurance pays for their passengers and themselves, and then fault is negotiated between insurance companies afterward. No-fault insurance is also known as personal injury protection, or PIP, and includes compensation for lost wages.
Popular Health Insurance: HMO
A health maintenance organization, or HMO, is generally the least expensive type of health insurance, paying for most services in a contracted network of professionals. Your health insurance costs will also be affected by many factors including climate zones and regional conditions. Even such factors as living near industrial zones can affect the health of a general population and must be factored into the equation.
Basic Home Insurance Limitations
A basic homeowners insurance policy covers the home and structures, and includes personal property and liability coverages. Because personal property includes everything in your home, adjust this part of the policy to provide enough coverage for everything you own instead of a small percentage of the policy value. Basic insurance may not cover natural disasters such as hurricanes or earthquakes, and home insurance in areas prone to such catastrophes may only be available through your state's department of insurance.
Minimal Life Insurance
A life insurance policy that covers little more than a person's final expenses is the most basic type of life insurance. Another basic option is to purchase a decreasing payout term policy, sometimes called mortgage insurance because it is often used to guarantee a mortgage regardless of circumstances. A common practice is to purchase a whole life insurance policy for your net worth, and take out individual term life policies for limited coverages.