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Understanding Insurance: A Simple Guide

Insurance can be confusing, but it doesn't have to be. Here’s a quick guide to help you understand what insurance is, how it works, and why it matters.

What is Insurance?

Insurance is a way to protect yourself financially from unexpected events. You pay a company (the insurer) a fee (called a premium), and in return, they help cover certain costs if something bad happens — like an accident, damage, or loss.

It’s about sharing the risk so you’re not left facing big expenses on your own.

How Does Insurance Work?

  1. You buy a policy for a specific type of protection (auto, home, health, life, etc.).

  2. You pay a monthly, quarterly, or annual premium.

  3. If something happens that’s covered by your policy, you file a claim.

  4. The insurance company reviews the claim and pays for the damages or losses (up to your coverage limits).

Why Do You Need Insurance?

  • Protect your assets (car, home, belongings)

  • Cover medical bills from accidents or injuries

  • Safeguard against lawsuits (liability coverage)

  • Provide financial support for loved ones (life insurance)

  • Comply with legal requirements (auto insurance is mandatory)

Common Types of Insurance

  • Auto Insurance: Covers your vehicle, accidents, and liability.

  • Homeowners Insurance: Protects your home and personal belongings.

  • Renters Insurance: Covers your belongings in a rental property.

  • Health Insurance: Helps with medical expenses.

  • Life Insurance: Provides financial support to your family if you pass away.

  • Business Insurance: Protects your business from losses.

Important Terms to Know

  • Premium: The amount you pay for your insurance policy.

  • Deductible: What you pay out-of-pocket before insurance covers the rest.

  • Coverage Limit: The maximum amount the insurer will pay.

  • Claim: A request for payment after a covered event happens.

  • Exclusions: What your policy does not cover.

We’re Here to Help!

Insurance is about peace of mind. If you’re unsure about your coverage, need help choosing the right policy, or have questions, our team is ready to assist.

📞 507 424 1044
📧info@rmbia.com

Disclaimer: Educational Purposes Only

 

The information provided on this website, including articles, guides, and resources under "Understanding Insurance & Coverage," is intended for general informational and educational purposes only. RMB Insurance Agency (RMBIA) does not provide legal, tax, or financial advice through this website.

No part of this website constitutes an offer or solicitation for insurance products, nor does it create a client-agent relationship.

Insurance coverage, terms, and conditions vary by provider, jurisdiction, and individual circumstances. We strongly recommend consulting directly with a licensed insurance professional or advisor who can provide advice tailored to your specific needs and situation.

While we strive to keep the information current and accurate, RMBIA makes no warranties or representations as to the accuracy, completeness, or suitability of the information presented. Any reliance you place on such information is strictly at your own risk.

RMBIA disclaims all liability for any loss or damage arising directly or indirectly from the use of, or reliance on, information provided on this website.

For personalized advice or assistance, please contact a licensed insurance agent.

P: (507) 424-1044

F: (507)320-6040

1418 1st Ave NE SUITE C, Rochester, MN 55906, USA

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The states we serve are Minnesota, Wisconsin & Iowa. Our main office is located in Rochester, MN. MN cities include Minneapolis, South St. Paul, West St Paul, Inver Grove Heights, Roseville, Rosemount, Oronoco MN, Owatonna MN, Cottage Grove MN, Cannon Falls MN, Maplewood MN, Woodbury MN, Eagan MN, Burnsville MN, Apple Valley MN, Pine Island MN, Rochester MN, St Charles MN, St. Paul MN, Spring Valley MN, Stewartville MN, Zumbro Falls MN, Zumbrota MN, Austin MN, Albert Lea MN, Brainerd MN, Byron MN, Chatfield MN, Dodge Center MN, Dover MN, Duluth MN, Eyota MN, Hayfield MN, Kasson MN, Lanesboro MN, Lewiston MN, Mantorville MN, and many more.

We can service everywhere in Minnesota, Wisconsin & Iowa! 

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