Getting An Insurance Policy – Understanding The Basics

The concept of insurance is not a recent one. It actually is as old as the human society itself, only the form of reimbursement keeps changing. In early stages of human society evolution, barter system was in practice. As such, agreements of mutual aid used to be the modes of reimbursement. Nowadays everything is monetary in nature. Insurance of a particular asset will bring back financial aid in case of mishaps.

Home Insurance

Speaking of home insurance, it is a type of arrangement where one is required to pay a fixed monthly premium. This premium accumulates as time passes; should your house face inadvertent damages, this accumulated premium will be returned to you to cover the costs. This is a generalized way of looking at insurance.

Home insurance policies may be named-peril or open-peril based, according to one aspect of categorisation. Named-peril policies only cover damages occurring due to perils named in the policy. Open-peril policies cover damages due to all perils, with the exception of those specifically mentioned in the policy. The latter can be obtained by paying a little extra amount in premiums. One might consider checking the difference between premiums of both types of policies. If the difference is affordable, an open-peril policy certainly is the better choice.

There is also a special form policy, which is a combination of named-peril and open-peril policies. As an example, home insurance in Maryland under special policy has this feature:
Coverage is provided for a building for nearly all perils, excluding these – floods, earthquakes, nuclear accident, war, neglect, ordinance enforcement, damage due to freezing/thawing of components, etc.

At a closer look, all these factors are actually quite extreme and less likely to occur.

Auto Insurance

In the same way, your automobile also needs insurance. Getting car insurance requires a basic knowledge of the kind of coverage provided by policies. Just like other insurances, this one also requires a monthly/annual premium to be paid to the insurance company. There is usually an upper limit to accumulated amount depending on the type of coverage chosen.

According to the type of damages coverage required by a client, auto insurance policies have the following options:

Bodily injury policy covers expenses in case of harm to persons when an accident is the client’s fault.
Property damage policy over’s expenses when there is damage to someone else’s property at the fault of the client.


Uninsured motorist policy covers medical bills when the other driver is uninsured and at fault.
Medical payments policy covers medical/funeral expenses when the client and his family are in an accident.

There are many types of automobile policies differing from company to company. This is because of the diverse nature of motorist and road accidents. It is advised to carefully examine your driving habits, lifestyle and frequent destinations before choosing the type of cover you require for your automobile.

For assistance, there are many reputed insurance firms in every city on the globe. One can look for insurance agents with good field experience and have a detailed discussion. A word of caution here would be to avoid engaging any random insurance company that offers cheap policies. One should make sure that the company is registered with concerned authorities, and has dedicated and credible insurance agents engaged on duty.

For more information on car or home insurance in Maryland, visit Farmerssmart.com

About The Author

Rena Wingate is an expert in the insurance industry in Maryland. She recommends Farmerssmart.com for the best insurance plans at lower rates in order to protect your homes, auto, cars and business in Maryland.