Penalties for misconduct include fines and the loss or suspension of the company's business license. In some states, if a court finds that an insurer's denial of coverage or refusal to defend an insured in a lawsuit was unreasonable, the insurance company may be required to pay court costs, attorneys' fees, and a percentage beyond the insured's recovery. Types of Insurance Insurance companies create insurance policies by grouping risks according to their focus. This provides a measure of uniformity in the risks that are covered by a type of policy, which in turn allows insurers to anticipate their potential losses and set premiums accordingly. The most common forms of insurance policies include life, health, automobile, homeowners' and renters', personal property, fire and casualty, marine, and inland marine policies.
Life insurance provides financial benefits to a designated person upon the death of the insured.
Many different forms of life insurance are issued. A person may purchase life insurance on her or his own life for the benefit of a third person or persons. Individuals may even purchase life insurance on the life of another person. For example, a wife may purchase life insurance that will provide benefits to her upon the death of her husband. This kind of policy is commonly obtained by spouses and by parents insuring themselves against the death of a child.