Insurance: protection against the costs you can’t predict
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Key takeaways
Insurance protects against unexpected, significant financial losses in exchange for regular premium payments.
It operates on a pooled-risk model, where many people’s premiums fund payouts for the smaller number who experience a covered loss.
Common types include health, auto, renters or homeowner’s, and life insurance, each covering different risks.
Eligibility for some insurance, particularly certain health coverage, can depend on immigration status; for others, like auto or renters insurance, it generally doesn’t.
A policy purchased in a home country typically doesn’t provide coverage once living, driving, or receiving care in a new country.
If insurance worked very differently, or wasn’t widely used, where someone grew up, the sheer number of insurance types and decisions expected in a new country can feel overwhelming. Here’s a plain-language overview to help get oriented.
What is insurance?
Insurance is a financial product that protects against unexpected, significant financial losses, in exchange for regular premium payments to an insurance company. If a covered event happens, such as an illness, an accident, or property damage, the insurer pays some or all of the resulting cost, according to the terms of the specific policy.
How insurance works
Insurance operates on a pooled-risk model: many people pay premiums into a shared pool, and the insurer uses that pool to pay claims for the smaller number of people who experience a covered loss in a given period. A specific premium is generally based on an individual risk profile, meaning factors like age, health, driving history, or the value of what’s being insured can all affect the cost. Common types include health insurance, covering medical costs, with terms like coinsurance(opens in new window) and copayment(opens in new window) describing how costs are shared; auto insurance, often legally required to drive; renters or homeowner’s insurance(opens in new window), covering a home and belongings; and life insurance, providing money to family after death.
Insurance for immigrants and newcomers
Insurance can present specific challenges for newcomers that go beyond simply understanding the concept. Language barriers can make dense policy documents genuinely difficult to parse, even for someone with strong general English skills, since insurance terminology is its own specialized vocabulary. Eligibility for certain insurance products, particularly health insurance, can also depend on specific immigration status and employment situation, meaning what’s available may differ from what’s available to a citizen or permanent resident, and this varies enough by policy type and program that it’s worth confirming specific eligibility directly rather than assuming.
A practical starting point for many newcomers is prioritizing the insurance types that are either legally required, such as auto insurance for drivers, or that protect against the most catastrophic potential costs, such as health insurance, before considering optional coverage. Community organizations that serve immigrant populations often have experience helping newcomers navigate specific insurance decisions and can be a valuable, judgment-free resource if the process feels overwhelming.
Community context
What feels most confusing about insurance often depends on what existed, or didn’t, in a previous country. Someone from a country with universal health coverage may find the very concept of shopping for a private health plan unfamiliar, while someone from a country with a robust private insurance market may adjust to U.S.-specific terminology and products more easily even if the underlying concept feels familiar. Immigration status, employment type, and which state someone lives in can all affect which specific programs and products are actually available, so nothing here should be read as describing every reader’s exact situation.
How to get the right insurance for your situation
Identify what’s legally required first. In most U.S. states, auto insurance is mandatory for vehicle owners and drivers, and some cities or states have specific health insurance requirements as well.
Check what an employer offers. Many employers provide health insurance as part of a benefits package, often at a lower cost than purchasing an individual policy directly.
Compare policies from more than one provider. Rates and coverage details vary considerably, and getting a few quotes for the same type of coverage helps in finding better value.
Ask a licensed insurance agent or broker for help if the options feel overwhelming. They can walk through specific needs and budgets without charging directly, since they’re typically compensated by the insurer.
How premiums are actually calculated
Understanding how an insurer arrives at a specific premium helps demystify what can otherwise feel like an arbitrary number. Insurers assess risk factors relevant to the type of coverage: for auto insurance, this includes driving history, vehicle type, and sometimes a credit-based insurance score; for health insurance, factors can include age, tobacco use, and the specific plan’s coverage level; for homeowner’s or renters insurance, factors include the location’s risk of natural disasters, the age and condition of the property, and claims history. Because these factors vary so much between individuals, two people with seemingly similar coverage can pay noticeably different premiums, which is why comparing quotes for a specific situation, rather than assuming a friend’s premium reflects the same rate, gives a more accurate sense of actual options.
Understanding your policy declarations page
Every insurance policy includes a declarations page, sometimes called the “dec page,” which summarizes the most important details of coverage in one place: policy number, coverage limits, deductible, premium, and the specific period the policy covers. This single page is often the fastest way to answer a basic question about coverage without wading through the full policy document, and it’s worth locating and keeping accessible, whether as a printed copy or saved digitally, to reference quickly when filing a claim or answering a question about specific coverage.
The claims process, from filing to payout
Understanding the general shape of a claims process before ever needing to use it removes much of the uncertainty when an actual loss occurs. Most claims start with promptly notifying the insurer, often through an app, website, or phone call, providing basic details about what happened. Depending on the type of claim, an adjuster may need to inspect damage in person or review documentation submitted, such as photos, receipts, or a police report for theft. The insurer then determines whether the claim is covered under the specific policy and calculates the payout based on coverage limits, deductible, and the specific type of value the policy uses.
Common questions about insurance
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Does my immigration status affect what insurance I can buy?
For some insurance types, particularly certain health insurance programs, eligibility can depend on immigration status, while for others, like auto or renters insurance, it generally doesn’t. Confirming specific eligibility with a licensed insurance agent or the relevant program directly gives an accurate answer for a particular situation, since this varies enough that general guidance isn’t reliable here.
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Is insurance from my home country valid in the U.S.?
Generally, no. Most insurance policies, particularly health and auto insurance, are tied to a specific country’s regulatory and healthcare systems, meaning a policy purchased abroad typically doesn’t provide coverage once living, receiving care, or driving in a new country. Purchasing a local policy for wherever someone is currently living is usually necessary.
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What happens if I can’t afford insurance right now?
Going without insurance carries real financial risk if something unexpected happens, but if cost is a genuine barrier, some programs offer subsidized coverage based on income, and community health centers sometimes offer care on a sliding scale regardless of insurance status. Researching what’s available in a specific state or city, rather than assuming no options exist, is worth the effort.
In Summary
Insurance exists to protect against costs that would otherwise be financially devastating, and understanding the basics, what’s required, what’s optional, and what depends on specific circumstances, helps in making informed decisions rather than feeling overwhelmed by an unfamiliar system.
This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.