Understanding the Different Types of Personal Insurance Coverage

insurance coverage

There are literally hundreds of specialty insurance products to protect your home, autos, rental property, and other valuable personal assets. This category of insurance, called personal insurance, usually contains several subcategories like auto insurance, disability insurance, homeowners insurance, life insurance, long-term care insurance, and wedding insurance. In general, personal injury protection coverage – also known as PIP – not only covers reasonable and necessary medical and hospital expenses when an insured is involved in a covered loss, but also can help you with other expenses while you’re healing. What follows is a summary of the major subcategories of personal insurance.

Auto Insurance

Auto insurance protects you against financial loss if you have an automobile accident. It is a contract between the owner of a vehicle and the insurance company ensuring it. In the event of an accident, the owner pays the premium and the insurance company agrees to pay their losses as defined in their policy. Auto insurance provides property, liability and medical coverage: property coverage pays for damage to or theft of your car; liability coverage pays for your legal responsibility to others for bodily injury or property damage; medical coverage pays for the cost of treating injuries rehabilitation and sometimes lost wages and funeral expenses.

Disability Insurance

If someone were to become injured and unable to perform his or her job, disability insurance protects him and his family’s economic well-being. Disability insurance is a form of insurance that insures the beneficiary’s earned income against the risk that disability will make working impossible. It includes paid sick leave, short term disability benefits, and long-term disability benefits.

Home Insurance

Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, additional coverage is required for types of disasters, such as flood and earthquake.

Health Insurance

Health insurance is a policy that will pay specified sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage but they take the form of a contract between an insurance company and an individual or his employer. The contract can be renewable annually or monthly. The type and amount of health care costs that will be covered by the health insurance company are specified in advance.

Life Insurance

Life insurance provides a monetary benefit to a descendant’s family or other designated beneficiary, and may specifically provide for income to an insured person’s family as well as money to pay for the funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum of cash payment or annuity.

Long-Term Care Insurance

Long-term care provides for the cost of care beyond a predetermined period. Long term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid. Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living such as dressing, bathing, eating, toileting, continence, transferring and walking.

Wedding Insurance

Wedding insurance protects a couple’s investment from circumstances beyond their control. It ranges from wardrobe defects to natural disasters, among many of the other things that can go wrong, and then reimburses expenses incurred.

Ernie Belmonte is Vice President of Agency Operations and writes for Joseph M. Wiedemann and Sons (, leading providers of business and personal insurance in the Chicago metropolitan area for more than 85 years.  Joseph M. Wiedemann & Sons is dedicated to providing insurance protection to meet the exact budget and needs of individuals, businesses and families. Visit to learn more.

5 Responses to “Understanding the Different Types of Personal Insurance Coverage”

  1. Kylie Dotts

    It makes sense that both home and auto insurance covers any damage done to your property. While it probably wouldn’t be used that much there would be a huge peace of mind factor knowing that you’re protected if something ever were to happen to your things. Then you could at least replace those things that were damaged.

  2. Jeremy Thompson

    It’s great to know that insurance can help me if any issues or accidents happened at work. I’ll keep this in mind when the time comes that I’ll need this. Thanks for the great advice!

  3. Ashley Maxwell

    Thanks for your comment about how personal insurance coverage can come in many different types from auto to home, and health, etc. I like how you said that it can cover medical expenses if needed. My sister is considering getting insurance coverage for those emergencies and unplanned hospital visits for her and her family.

  4. Lilia Robberts

    Being independent really puts into perspective all the things that my parents did for me. One of those things that I was clueless about was insurance. I have no idea where to start with insurance. Thank you for sharing that auto insure covers for theft for my car. I live in an area that doesn’t have the best honesty.

  5. Sherry Gajos

    I really like what you said about auto insurance protecting you against financial loss in the case of an automobile accident. I’m trying to teach my teenager about the responsibilities inherent in owning a car, which I know includes insurance, though I am not sure about how to explain it. Thank you for the information about how it’s a contract between the vehicle owner and the insurance company.

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