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What kinds of insurance providers are there?

There are three basic types of insurance: private insurance, social insurance, and public guarantee insurance.

Private insurance includes:

  • Capital stock insurance companies (owned by stockholders)
  • Mutual insurance companies (owned by the insured policyholders)
  • Reciprocals (an unincorporated association of individuals or entities that exchange contracts of insurance through an attorney-in-fact may provide a tax advantage to groups of non-profit entities)
  • Lloyd's associations (organization of individuals who underwrite insurance cooperatively, where individuals are personally liable for losses of other members)
  • Health expense associations (e.g. Blue Cross/Blue Shield)

Social insurance includes:

  • Federal Social Security (OASDHI - Old Age, Survivors, Disability and Health Insurance)
  • Workers Compensation (provides monthly benefits to a worker who cannot work because of an injury or illness sustained while on the job - operates through the state, with premiums paid by the employer)
  • Flood Insurance (a Federal program for property owners who live in areas that are likely to flood - such damage is not covered in standard homeowners insurance policies)

Public guarantee insurance includes:

  • FDIC (Federal Deposit Insurance Corporation, which insures against depositor losses in the event of bank failure)
  • NCUA (National Credit Union Administration, which insures against depositor losses in the event of credit union failure)
  • SIPC (Securities Investors Protection Corporation, which provides that customers of a failed brokerage firm receive all non-negotiable securities already registered in their names or in the process of being registered)



Brenda Procter, M.S.,  Consumer and Family Economics, College of Human Environmental Sciences, University of Missouri-Columbia







If you'd like to learn more about this and other personal finance topics, the University of Missouri offers 'Personal & Family Finance,' a correspondence course, through the Center for Distance and Independent Study (800-609-3727). Information about this course is available at





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Last update: Sunday, July 20, 2008




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