10 Types of Insurance You Should Strongly Consider
Although you can’t stop the unexpected from happening, sometimes you can get protection. An insurance policy is designed to protect you financially, should certain events occur.
However, there are many insurance options, and finding the right one can be hard. Below we have listed 10 different types of insurance that it is wise to have to protect yourself and your family.
If you own a vehicle, it’s important to have this insurance. Most states in the USA require licensed drivers to possess auto insurance. An auto insurance policy will help you deal with automobile accidents, vandalism, theft or a natural disaster like a hurricane.
If you have auto insurance and get in an accident while driving, your insurance will cover all your expenses and even guard you against any litigation that may arise from the accident.
The auto insurance you purchase will depend on various factors like location, age, driving history, and type of car. Though liabilities coverage might differ based on your policy and extent of the accident, having auto insurance coverage can save you lots of money if you get involved in an accident or lawsuit.
According to some financial experts, life insurance is incorrectly named. It’s not insurance on your life, but on your income. If you’re the primary breadwinner of your family, life insurance is vital.
Life insurance guarantees your family a certain amount of income for some stated period if you pass away. It helps your family cope financially, and with it, you can ensure that your family will move on even when you’re gone.
Two main forms of life insurance include:
- Term Life Insurance: Customers pay a set premium for a specific amount of cash benefit paid out in case of certain events.
- Whole Life Insurance: Converts life insurance into a saving and investment vehicle. However, it has failed most times.
Property Insurance (Homeowners or Renters Insurance)
Homeowner’s insurance covers your home against theft, vandalism and damage. Another benefit is that it covers the costs if someone gets injured on your property.
This insurance can also cover your home’s roof, foundation, walls, and personal property. But you might require extra insurance that covers your home against natural disasters, such as earthquakes, wildfires, and flooding.
Renter insurance covers your belongings in an apartment against theft and damage. It can also cover the cost if someone gets injured in your apartment or if their personal belongings get stolen or damaged. However, it can’t protect you against natural disasters and damage from pests.
Overall, homeowners and renters insurances protect you against harm done to your home by others.
Obviously, where you live influences the urgency of these types of policies. If you live in a high crime location, you’ll need an insurance policy for your home.
Fire risk is not part of property insurance. Most insurance policies treat fire as a separate and distinct risk all on its own. While you can live without fire insurance, you might end up regretting if a fire occurs and ruins your home with all your belongings.
If you’re living in a dry area or hot regions of the southwest, fire insurance is essential. It also comes in handy if you’re living in remote areas where firefighters might have more difficulty dispatching.
Flood insurance is important for people who have homes in flood plains. But even houses that don’t sit in flood plains might require flood insurance. For instance, a house sitting on a hillside can flood if rainfall reaches critical mass.
Natural weather disasters like hurricanes can also cause places that rarely flood to flood. And when this happens, people could suffer serious property damage.
Just like fire, property insurance policies don’t include flood coverage. However, review your homeowner insurance policy to check it offers coverage against floods. If it’s not, then you might have to consider buying flood insurance.
Financial advisors consider disability insurance more important to millennials than life insurance. Why? About a quarter of millennials today may become disabled in life, especially before they retire. And if this happens, then they might not work and their healthcare cost will most likely rise.
You require disability insurance if you’re working in a challenging environment like construction sites. The insurance will provide you with lost income in case you get into an accident and become disabled.
However, this doesn’t mean people who work in offices can’t benefit from disability insurance. Although they perform less physically challenging jobs, they can get exposed to a variety of injuries such as carpal tunnel syndrome.
A disability insurance policy can financially protect you and your family from becoming broke if you suffer an injury when doing your job.
Unless you live in a cave somewhere, you know that health insurance is important. This not the time to be uninsured because medical expenses are so high and hard to pay out of pocket. Even if you receive employment benefits, it’s still important to get health insurance.
A health insurance policy will cover your doctor’s visits, prescription medication, and treatment when you fall critically ill. The best and affordable way of getting health insurance is to participate in your employer’s insurance program. But if your employer doesn’t offer healthcare insurance, use the options listed below.
- Purchase an individual policy
- Buy insurance as part of a group
- Use a health savings account to buy a high-deductible policy
- Sign up for a state plan for people who have financial difficulties
- Look into the Affordable Care Act
A health insurance policy becomes even more important when you get older.
Liability insurance is vital for anyone practicing or operating a business that exposes their clients to risk.
For instance, freelancers can get professional liability insurance to protect them if anyone sues them based on something they created (blog, advertising campaign, graphic content). Doctors must get malpractice insurance to cover them against lawsuits resulting from mistakes or malpractice in their work.
Overall, if your business entails others becoming harmed, the law requires you to buy some type of liability insurance. Sadly, liability insurance is very expensive.
When you purchase a home, the mortgage lender often requires you to purchase title insurance. Unlike the other insurance that covers you, the title insurance covers the lenders.
This insurance guarantees that the title given to you is valid. If you don’t get title insurance, you may find yourself one day answering a door to a stranger claiming the ownership of the house. Your next move will involve heading to court and have expensive legal battles about who truly owns the property.
Thankfully, a title insurance policy is affordable. For a one-time payment, buyers or investors can protect themselves against any claims of legal ownership of their property.
Lastly, we have earthquake insurance. Earthquakes can be very devastating, and most people are aware of this.
Earthquake insurance can sometimes be included in your homeowner insurance policy. But if your homeowner’s insurance policy can’t cover your home from an earthquake, you might have to purchase the insurance policy.
If your home sits in an area prone to earthquakes like California, you must purchase earthquake insurance to protect your home.
An earthquake can also occur in places that don’t normally experience earthquakes. So access where you live and see if it’s wise to purchase earthquake insurance. This insurance could mean the difference between hopelessly losing everything and starting fresh.