There are so many different types of insurance and insurance policies today that sometimes it’s hard to keep up with what you need and what you can do without. In reality, while coverage is important in all of these types of insurance, it is possible to have too much coverage and end up paying premiums you don’t need to pay.
So, how do you know which insurance types are necessary and which will just be throwing away your money? The five basic types of insurance are listed below with a little bit about each one to help you make an informed decision.
Car insurance is something no one can do without. If you have a car and drive it on the road, it’s illegal not to have at least standard coverage on the vehicle. In fact, in some states you don’t even have to have a car, if you have a driver’s license, you need insurance. The good news is that there are several different types of auto insurance to choose from, so you can find a policy that fits your budget.
- Personal injury protection
- Uninsured or underinsured motorist
The answer to whether you need car insurance or not is a resounding yes. It is illegal to drive in any state without it.
Life insurance covers your loved ones after you’re gone. The debate over whether you need to think about life insurance early on in life is one that has been going on for ages. While people would prefer to not think about the possibility of dying, if you have a family it’s your responsibility to make sure they are taken care of, even after you’re gone. If you’re single, you might not need a life insurance policy to support others, but it’s important.
There are different types of life insurance to choose from, and it’s best to do your research and use a life insurance calculator to determine the cost before signing on the dotted line of any policy you choose.
Homeowner and Renter Insurance
Homeowner’s insurance covers your property should something happen, while renter’s insurance covers the contents you own in a rented home. As with all of the other policies, it’s best to do your homework to get the best price for you. Homeowner insurance is essential, as for most people their property is their biggest investment.
Renters insurance is debatable, but if you have stuff in your home you don’t want to lose, you should look into it.
Health insurance covers your medical costs from doctor’s appointments to emergency room visits and surgeries, according to the policy you choose, of course. Health insurance is the most needed insurance out there. Over 60% of the bankruptcies in America today are filed because of health-related bills and costs. Everyone needs health insurance as an adult, as children are usually covered under one of their parent’s plans.
Some Insurance that is not Necessary for All
There are some types of insurance that are more optional than others. The ones that might not be for you are listed below.
- Flight insurance
- Life insurance for kids
- Accidental death insurance
- Disease insurance
- Mortgage life insurance
This is not to say that you might need these types of insurance. You just need to do your research to determine if they are indeed worth the price you’ll pay for them.
These are just a few of the types of insurance policies out there for the taking. Some, such as car insurance you have to have, others are optional but needed in most cases.