Insurance coverage is the protection you get from an insurance policy. It helps pay for costs if something unexpected happens, like a car accident, damage to your property, or a sudden death. Different types of coverage include auto insurance, life insurance, and third-party liability. These policies are provided by insurance companies to help reduce the financial impact of such events.
Insurance coverage helps protect you from financial losses caused by unexpected events, such as natural disasters, car theft, or loss of income. In exchange for this protection, you pay a fee called an insurance premium to the insurance company. The amount of coverage and the cost of your premium depend on several factors.
Insurance companies often charge different premiums based on risk profiles. For example, young male drivers may pay more because statistics show they’re more likely to be involved in accidents. In contrast, someone with a long, safe driving history may pay less.
Ultimately, your insurance premium will be calculated based on your profile, which may include factors like age, lifestyle, location, and claim history.
What are the different types of insurance coverage?
1. Car insurance coverage
Auto insurance coverage, or car insurance coverage, is a type of protection that keeps you covered in the event of an accident or car collision on the road. Drivers are required to have the minimum amount of liability auto insurance coverage at the very least. This includes bodily injury liability coverage and property damage liability coverage.
Bodily injury liability, or third-party liability, refers to the medical expenses of any other involved parties who may have been injured because of you.
Property damage liability covers any damages to someone else’s property when you were at fault.
Depending on where you live, you may also be required to have further insurance, such as:
- Comprehensive coverage
- Car collision coverage
- Medical coverage
- Personal accident coverage
Auto insurance coverage premiums generally depend on your (the driver’s) driving record. If you have a record free of any accidents, you will typically be able to secure a lower insurance premium.
If, however, you have a history of accidents, you will likely have to pay a much higher insurance premium to cover the increased risk of bodily injury or third party liability.
Similarly, mature drivers tend to have fewer accidents than new drivers and as such, drivers below the age of 25 tend to be charged more.
Drivers who take their car to work or regularly drive long distances will also pay more for auto insurance coverage due to the increased mileage and an increased likelihood of a car collision. Those who do not drive very much invariably pay less.
Another consideration is higher rates of property damage or vandalism in urban areas. Drivers who live in cities tend to pay higher premiums than people living in smaller towns and rural areas.
2. Home insurance
Home insurance or property insurance refers to a type of protection that covers financial losses associated with any incidents involving your home and property. As an example, the typical home insurance coverage will cover the following property damage:
- Arson (fire)
- Theft
- Vandalism
- Lightning damage
- Hail
- Heavy winds
With a homeowner’s policy in place, you can pay for repairs to your home, or in the most extreme circumstances, rebuild it.
Home insurance coverage can also be used to pay to replace lost or damaged belongings, as well as to replace or repair any structures associated with your property (e.g., your garage).
Homeowner’s insurance premiums can vary depending on the total value of your home and where your home is located. As an example, you may be required to pay higher premiums in areas that are more likely to be hit by a natural disaster such as flooding.
3. Life insurance coverage
Life insurance coverage refers to the type of protection that can provide financial security for your loved ones and dependents should you pass away prematurely. With such a policy you are tasked with naming a beneficiary (someone who will be responsible for your assets and estate), or multiple beneficiaries to receive a death benefit in the event that you should pass away.
Term life insurance is a type of coverage that provides protection for a set period of time. For example, you can choose a 20 or 25-year term policy.
Permanent life insurance covers you for as long as you are paying your monthly premiums (e.g., lifetime coverage). Another benefit of permanent life insurance coverage is that you can often build a cash value over time that you could borrow against in the event you encounter financial troubles.
Permanent life insurance coverage types include:
- Whole life
- Universal life
- Variable life
- Variable universal life
With each of these life insurance types (both term or permanent), you can choose the total death benefit that you would like your beneficiaries to receive (e.g., ฿1,000,000 and beyond).
Term life coverage tends to offer lower insurance premiums as you will only be covered for a set period of time.
Premiums for life insurance coverage can vary depending on the age and gender of the insured party. As younger people are less likely to die, they will typically pay a lower insurance premium, while women also typically pay lower insurance premiums because they tend to live longer than men.
Engaging in risky behaviors, such as a dangerous hobby or using drugs and alcohol, can result in a higher insurance premium as well.
The health of the insured party is also a key factor in calculating the premium costs. Those who are in good health will pay less. As an example, those with a 30-year policy have a greater risk of death than those with a 10-year policy.
If you have a history of chronic illness or any other pre-existing conditions, such as hereditary heart disease or cancer, it may also result in a higher insurance premium.
Smokers, drinkers, and people suffering from obesity will also be much more likely to pay a higher premium. When applying for life insurance coverage the applicant will go through a thorough medical examination in order to determine any signs of high blood pressure or other signs of risk that may result in an increased likelihood of premature death.
In addition to life insurance, it is worth considering other types of insurance to ensure you are covered in the case of an unforeseen event, including health insurance coverage, cancer insurance coverage, fire insurance coverage, and medical insurance coverage.
Frequently asked questions
Where to compare insurance rates?
You can compare insurance coverage and premiums by getting a quote on our website or through comparison sites such as MrKumka. After answering a few quick questions, you'll receive recommended coverage options, premium estimates, and available add-ons tailored to your needs.
Why is insurance coverage important?
Having insurance coverage gives you confidence in every situation. Choose a trustworthy insurance company, and in case of accident, please contact your agent to receive assistance.
What is considered full insurance coverage?
In case of car insurance, full coverage might consist of third party liability, comprehensive coverage and collisions. Home insurance coverage might include coverage against fire, theft, vandalism, lightning damage, hail, heavy winds, floods.
Which insurance coverage is required by law?
The compulsory motor insurance in Thailand or “Por Ror Bor” is required by law. The coverage of compulsory car insurance is very limited, so it is suggested to purchase additional voluntary motor insurance. Home insurance isn’t required by law, however, natural disasters like flooding are common in Thailand. Regarding life insurance coverage, in Thailand it is not required, however, strongly suggested to have life insurance coverage.
Can insurance cover plastic surgery, dental services, and LASIK?
General plastic surgeries, dentist services, and LASIK are not covered by insurance. However, if it is needed after an accident, it might be covered by your insurance provider.
Definitions
| Urban areas | Densely populated regions with a high concentration of people, buildings, and other infrastructure. |
| Rural areas | Sparsely populated regions with fewer people, businesses, and infrastructure. |
| Hereditary disease | A medical condition passed from parents to children through genetic inheritance. |
| Hail | A form of precipitation made up of solid ice balls. |
| Premature death | Death that occurs before reaching the average life expectancy. |