What is an insurance policy?

An insurance policy is a contract between a person or business and an insurance company. It is a legally binding agreement in which the insurance company agrees to provide coverage for a person or business in exchange for a premium, which is an ongoing payment made to the insurance company for the duration of the policy. In New Jersey, insurance policies provide protection for financial losses that can occur due to unexpected events such as accidents, fires, and illnesses. Generally, the policy will limit coverage to certain events specified in the policy. In addition, insurance policies typically include provisions for deductibles and coinsurance. Deductibles are the initial amount a person or business must pay out of pocket before the insurer will pay for a claim. Coinsurance is a form of shared responsibility between the policyholder and the insurer in which the policyholder pays a percentage of the claim and the insurer pays the rest. Insurance policies also typically include liability coverage. Liability coverage protects a policyholder from legal claims brought against them due to their fault. It covers the cost of legal fees, court costs, and damages awarded to the plaintiffs as a result of a successful lawsuit. Overall, insurance policies provide a great deal of protection from many unexpected financial losses. They allow policyholders to typically receive coverage for financial losses that otherwise may not have been adequately protected.

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What is an insurance policy?

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