You may think you are covered under an insurance policy until an accident happens and you realize you forgot to purchase it, or that you thought you wouldn’t need it. So, how are you supposed to know what insurance do you need to make sure you are covered, but also aren’t stuck with a pricey bill? Here are the four most common that almost everyone needs:
- Health and disability insurance
- Homeowner’s and renter’s insurance
- Auto insurance
- Life insurance
Types of Insurance Almost Everyone Needs
There are all types of insurances on the market, and it’s all about finding what you actually need. Here are the different types of insurance almost everyone needs – and should have!
Health and Disability Insurance
Health and disability insurance is typically offered through an employer, spouse’s employer, labor organization, or individually from the federal or state level. Having health insurance is important if you plan on seeing a doctor when:
- You are sick
- Need a routine checkup
- Need to purchase prescription medication
- When seeking medical care due to illness or accident
Disability insurance is given by an employer or labor organization in case of injury that leaves you unable to work and offering supplemental income in its place. Health insurance makes sure you can preserve your health, especially when it’s needed in an emergency.
Homeowner’s or Renter’s Insurance
Whether you own a home or are renting, it’s important to have property insurance to protect your belongings in the event of a fire, burglary, weather event, or other man-made disaster.
In most cases, your auto insurance company will bundle you renter’s insurance, usually for no extra charge. While landlords typically have insurance to cover the building in case of an emergency, they do not usually cover your personal belongings.
For homeowner’s insurance, your mortgage company might require you to have insurance coverage to ensure that your home will be rebuilt in case of a catastrophe since the collateral for your lender is your home.
Keep in mind that renter’s insurance and homeowner’s insurance may not include water or flood damage, and you might need to get a separate policy if you live near an area that floods often.
If you don’t drive or own a vehicle, this coverage won’t apply to you. Most states require you to have a minimum coverage on your car. If you purchase from a dealership or auto shop, they also may require you to have proof of insurance before they allow you to purchase the vehicle.
If you’re worried about auto insurance, find out the minimum your state coverage requires, what exactly it covers, and then compare it to your current insurance coverage.
Just as important as the other insurances, life insurance is often overlooked. Usually, it will be offered through an employer and is used to make the lives of spouses, children, or parents a little easier in case of death. Ideally, it will help cover the cost of a funeral or will supply a short stream of revenue for loved ones until they can get back on their feet.
Even if you are young, you should have at least some sort of life insurance policy. The older you get, the more important a policy will be for you.
Other Types of Insurance to Consider
While the insurance policies listed above are the most common insurances to have and ones almost everyone should get, there are some insurance policies out there that you might want to consider. You may not need them, but they are the next common people choose to get.
- Pet Insurance
Pet insurance is simply health insurance for your beloved companion. Depending on the pet and any pre-existing conditions, medications, surgeries, and trips to the vet can add up. Pet insurance keeps the cost down, the medications affordable, and helps find and pay for life-saving treatments.
- GAP Insurance
Guaranteed Auto Protection insurance covers the monetary gap between the amount the vehicle is worth and the amount you owe. This type of insurance is best if you plan on buying new cars or leasing, especially since the value of your car decreases the second you drive it off the lot. You can get GAP insurance with your auto insurance provider.
- Whole Life Insurance
The Whole Life Insurance policy covers – and can pay back out to you – over the course of your life. Upon your death, it will also pay out to your loved one, or it can be used later to cover medical expenses or borrowed against. The only downfall with Whole Life insurance is that the premiums tend to be high, the benefits low, and the coverage can be difficult to understand.
- Travel Insurance
If you travel a lot for work or leisure, travel insurance may come in handy for you. Those who do use travel insurance have hailed it as a positive resource in case of: lost or stolen luggage, medical expenses abroad, re-book plans if flight is cancelled, etc.
The only downside that comes with travel insurance is that it typically duplicates existing coverage. Check with your health insurance because you could have medical coverage for traveling abroad. Your homeowner’s or renter’s policy might also protect your property while you are traveling, too. If you used a credit card or booking agency to book your flight, ask them about cancellation refunds if the airline cancels the flight.
- Supplemental Insurance
Supplemental insurance can be used as a bridge for shortfalls from any of your traditional insurance plans. You can use it to pay bills, rent, mortgage expenses, and even groceries while you wait for your other insurance policy to pay out. Check with your insurance agency before committing because you may not need it. It can be a waste of your money if you pay for supplemental insurance policies when you could be saving money in an account in case of emergency situations where you would need extra cash.