Home insurance, car insurance, and medical insurance are the most popular insured risks. You can purchase insurance for almost any imaginable risk from an insurer, the company that sells the insurance. Consider buying: Home insurance -- to protect against risks of flood, fire, theft, or occupier injury. Car insurance -- to hedge against risk of accidents, theft, or personal injury. Medical insurance -- to help safeguard the health of you and your family in times of medical crisis.



Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the transfer of the financial risk of a potential loss, from one party (the insured) to another (the insurer), in exchange for a premium.

Other forms of more exotic insurance include insuring your pet's health, insurance to monetize particular parts of the body like a dancer's legs, or insuring a priceless work of art. You may also consider business insurance, and insure the many and substantial risks associated with owning your own business.

Insurance companies make money by selling large volumes of policies or plans, and spreading the risk of loss across a large segment of the insured group. In theory, the insurance company must sell enough insurance at a price that allows the amount coming in, invested over time, to cover the losses incurred by the insured group. This is important to you because the amount of your insurance premium contributes to the total pool, whether or not you ever need the insurance. However, in my respectful opinion you always need the insurance, you may never use it, but you always need it.

In the event of, for example, a home fire, the monthly insurance premium paid for home insurance (and in particular fire insurance) becomes insignificant to the cost of buying a new home. It does not take much imagination to picture the devastation to your finances, family, and mental health if you were to experience a catastrophic home fire and not have adequate insurance. You can completely mitigate against this devastating loss for the price of a relatively small monthly premium. In my opinion, not having sufficient home insurance is literally playing with fire. If you never use the insurance consider it good fortune; because, it means your house didn't burn down and you were able to help finance through premiums the pool of financial resources that assisted a family who's house maybe did burn down.

Medical insurance is, for most people, equally or more important. A popular and important related type of insurance is disability insurance. In the event of medical problems, having proper insurance to cover hospital expenses, drug costs, and other related medical fees is a must. In the absence of good health insurance you are at unnecessary risk. If, as a result of the same illness, you are unable to work for any significant period of time, disability insurance plays a critical role in providing for the financial needs of you and your family.

Please consider insurance when setting your financial priorities, and relax knowing that you are part of a community of like minded individuals that protect against unexpected loss.