This is Insurancein Plain English.

Let’ssay you’re on a boat when a wave comes out of nowhere and knocks you into shark-infestedwaters. Events like this are difficult to predict, so the best thing you can dois have a way to recover quickly. Now falling off of a boat is just an example.In real life, events like your home burning down can be devastating. Recoveringfrom these events requires a lot of money. Money that most people don’t have.Thankfully, we have a way to recover from these big expenses. It’s calledinsurance.

Let’ssay your car gets caught in a storm. Suddenly you don’t have a car or the moneyto fix it. Without insurance, you might have to borrow a bike to get to work.But with insurance, you’ll have a way to get your car fixed or replaced. Itsounds too good to be true, right? Well, insurance comes with costs. To beprotected, you buy it from an insurance company. When bad things happen, thecompany will help you recover by paying some of the expenses.

Here’show it works.

To getinsurance, you talk with an insurance company about the things that areimportant to you. These are usually things like your health, your car, yourhome and your family. You’ll set up a plan or policy with the company thatoutlines how the insurance will help when something bad happens. For instance,a policy might outline when and how much the insurance company will pay whenyour car is wrecked, your home is flooded, or you can’t work for a period oftime. There are even policies that outline how your family will be protected ifsomething happens to you.

Insurancepolicies are very specific. It’s important to understand exactly what a policycovers. To have this kind of protection, you’ll pay the insurance company over time. Even if you’re healthy andyour property is safe, you’ll still pay on a regular basis. These payments arehow insurance companies can afford to cover people like you.

Here’swhat I mean.

You areone of thousands who are paying the insurance company on a regular basis. Thecompany takes this money and pools it together. When bad things happen topolicy holders, the company has enough money to help them recover as outlinedin the policy. Of course, this means you may pay for insurance your whole lifeand never use it. Before you question the value, remember that insurance coversthe big expenses caused by things that are out of your control. Withoutinsurance, these things can come along and take away your hard-earned money.

Insuranceis an important part of being responsible with your money and property. Talkwith a company you trust about what’s important to you. Take the time to askquestions, read the fine print and compare policies. Insurance won't keep youfrom falling in, but it will help you recover more easily when bad thingshappen.