cove insurance

What are the different types of insurance?

As we discussed in our what is insurance article, there are many risks in life and many ways in which you may come to financial grief. Fortunately insurance can cover a wide variety of these risks and make sure you’re financially able to bounce back should the worst happen.

There are five key areas of insurance:

  1. Cover for the things you own and the things other people own
  2. Cover for your medical expenses
  3. Cover for your income
  4. Cover for when you die
  5. Cover For travelling

Let’s explore each of these in more detail.

Cover for the things you own

Let’s face it, most of us own a lot of things, probably more than we need if we’re to be honest about it. But no matter how much or how little we own, it all, at some point, cost us money to buy. From the knifes and forks in the kitchen to the house itself, if anything were to happen to these things we’d need to dip into our pockets to replace them.

Personal insurance policies can cover all of these items. If you can physically kick it, there is bound to be a policy that will cover it.

The most common policies are noted below.

Gadget Insurance – Own a cellphone or laptop but not much else? Gadget insurance typically covers individual electronic items at a much cheaper premium than a full contents insurance policy. If you drop it, spill water on it, or it’s stolen you can usually replace it under a gadget insurance policy.

Contents Insurance – So you’ve finally got your own place and are stocking it up with all sorts of furniture and prized possessions. A contents insurance policy will give you a blanket cover over these items both when they’re at home or out and about with you. If you’d take it with you when moving house, and it’s not a car, then generally it’s covered by a contents policy. Think of it as the policy for your stuff. Not only your stuff though, most New Zealand insurance policies also cover other people’s stuff if you’re responsible for damaging it.

House Insurance – For most New Zealanders owning a house is one of life’s big milestones and is likely to be the most expensive thing we ever buy. A house insurance policy will make sure that if there’s a flood, fire, or one of the kids paints the window a lovely shade of pink, the house will be repaired to the same condition it was in before…and keep the bank off your back when the house is gone but the mortgage is still there.

Car Insurance – If you’re driving it is critical you have car insurance, even if you’re not worried about your old dunger, imagine what would happen if you accidentally hit that brand new Porsche outside the neighbours place… reckon you could afford to pay for that? There are several different levels of insurance available for you if you own a car, from a third party only cover that pays for damage to other people’s property only, to a full bells and whistles comprehensive policy, you’d be mad not to have a policy as soon as you hit the road in your new wheels

Commercial insurance – If you’re in business it’s perhaps even more important to protect yourself with insurance. From the stock in the store to the delivery trucks, and everything in between, commercial insurance policies will make sure that your business doesn’t fall over when that dodgy rack in the corner does.

Cover for your medical expenses

Ever busted your knee and had to be put on a waiting list for surgery? What about being told you can’t access a particular service without having to pay for it? Health insurance can help you get the treatment you need, when you need it, without the worry of huge bills to pay.

But isn’t it all free in New Zealand? Sure, we’re incredibly lucky to have a great public healthcare system here, and through our public no-fault accident insurance scheme (ACC) that covers accidental injuries, we’ve got a lot of bases covered.

But if you need to see a specialist, need an MRI, or non urgent surgery, you’ll find yourself on a waiting list. And it can take a long time to get to the front of the queue. Health insurance can help by giving you faster access to treatment, reduce your cost for private treatment, and provide you with choices about when you can receive treatment for covered medical conditions.

Cover for your income

How long could you survive if all of a sudden you couldn’t work anymore? If you’re like me, you’d probably last a week. Maybe. And what about the future? What if you were out of work for a long time? What would your lifestyle be like ten years from now?

Income protection insurance makes sure that if you can’t work due to illness or injury you’ll still receive an income while you get back to full health.
There are four key types of income insurance available (sorted.org)

  1. Trauma or critical illness insurance: Provides a lump sum payment if you suffer from certain illnesses or injuries such as cancer, heart disease or paralysis
  2. Income protection insurance: Pays a percentage of your income on an ongoing basis if you suffer from named illnesses
  3. Disability insurance: Pays out a lump sum for permanent disablement through sickness or accident
  4. Mortgage protection insurance: Specifically covers your mortgage if you can’t work

Cover for when you die

It’s a subject many of us don’t like to think about, let alone plan for. But, let’s think beyond the moment of death to how your loved ones are coping without your income anymore. Can they stay in the family home or have they had to leave because the mortgage is too much for one income. What about the kids? Are they still in the schools you wanted them to go to? Are they still able to take those piano lessons and play soccer on the weekends?

Life insurance is a policy taken out to financially help your family when you no longer can. It can ease the burden of bills in a time of incredible sadness. Not only can it provide cover for immediate expenses like funerals, but it can help make sure your family remain financially secure, and in the same lifestyle they’re used to, well into the future.

Cover for when you travel

Kiwis love to travel. We get all over the place, and sometimes this means getting caught up in some pretty sticky situations. Travel insurance will make sure you and your things are protected all over the world.

If you’re the victim of crime, your flight’s been cancelled, or you get sick or injured overseas, travel insurance will help cover the bills which are often astronomically higher than here at home. There’s no such thing as public healthcare in many countries – you’ll need to pay all your bills from the minute you enter the hospital if you want treatment. There’s no way many of us could afford this without travel insurance.

If you can’t afford travel insurance you can’t afford to travel. That’s the saying anyway, and at really affordable premiums you’d be crazy not to pack a travel insurance policy when leaving home.

The content presented on this page is provided for informational purposes only. Cove Limited makes no representations or warranties as to the accuracy, completeness or timeliness of the information. Each person should consult a qualified advisor for advice specific to their circumstances. Cove Limited assumes no liability for actions taken in reliance upon the information contained herein.

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