Insurance

Q: What is insurance?
A: Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement from an insurance company against various losses resulting from accidents, injury, property damage, health conditions, and legal responsibility (liability) for damage or injury caused to you or that you cause to another person. As with all contracts, it is essential to read your policy and know what your protections are and the sums of money at your disposal in the event of a loss.

Q: What kind of insurance policies exist?
A: Common types of insurance include health, car, homeowner's, rental, and workers' compensation insurance.

Q: What is health Insurance?
A: Health insurance provides for payment or reimbursement for your healthcare costs. Typically, children have health insurance through their parents' policies. You can continue to remain on your parents' policies until your 26th birthday, regardless of your marital status. Once you turn 26, you will need to purchase your own health insurance or get a group health insurance through your employer. In the event of an accident, injury, or sudden illness, you might be putting yourself at risk for future serious financial challenges if you do not have health insurance. More information is available at HealthCare.gov.

Q: What is auto insurance, and what does it cover?
A: Arizona requires you to maintain (or be insured under) basic auto insurance to protect other drivers if you cause a car accident. Auto insurance policy offers several critical protections:

• Insurance against liability (bodily injury and property damage) protects other drivers and their property if you cause an accident.
• Comprehensive insurance protects your vehicle against damage that was caused by something other than accident.
• Collision insurance protects your vehicle against damage caused by a car accident.
• Uninsured and underinsured motorist insurance protects you against injuries that were caused by other driver, who either did not have insurance or had insufficient limits of insurance to compensate you for your injuries. Arizona laws require drivers to have liability insurance. The rest of the insurance coverages are optional at the driver's choice.

Q: What is homeowner's and rental insurance?
A: If you purchase a home, chances are, you will have to obtain homeowner's insurance to provide financial protection against losses and damages to your home. Most homeowner's policies also protect you from legal responsibility for someone else's injury. For example, if you have a dog that bites another person, your homeowner's insurance may step in to protect you if the injured person decides to sue you. Rental insurance is similar to homeowner's insurance. However, it usually does not protect the rental home and, protects your personal belongings and legal responsibility, and provides for additional living expenses in the event of an accident.

Q: What is workers' compensation insurance?
A: Every employer with one or more employees in the state of Arizona must have workers' compensation insurance. Workers' compensation insurance may help pay for healthcare costs and a certain percentage of income if an injury temporarily restricts a person's ability to work.