Risks that are certain, like death, have high premiums. Risks that are not likely, like title insurance, have relatively low premiums. The list of risks that an insurer is agreeing to pay you for is called coverage , and you are usually covered only for what is specifically agreed to in the policy. Most policies include exclusions , or risks for which they will not pay. Most homeowner's and renter's policies, for example, exclude damage from floods.
Most policies have conditions of coverage .
Under most policies, for example, you have an obligation to report claims immediately. You also have an obligation to cooperate with the insurer in investigating or defending your claims. You may also have to help the insurer assert its subrogation rights . Subrogation means that if an insurer pays you if someone destroys your house, it obtains any legal rights you may have had against the person who did it. There are many kinds of insurance policies, and your agent can explain them to you.