The Three Basic Personal Insurance Policies Everyone Needs
Dan Levenson January 25, 2018
Because devastating events like health problems, auto accidents, and natural disasters can quickly change your life, it’s critical that you have the right personal insurance in place at all times.
Although you may not be able to have insurance to cover every single little thing that could possibly go wrong in life, you still need to have the three most basic types of personal insurance:
- Property Insurance
- Auto Insurance
- Health and life Insurance
Let’s explore these types of policies, along with why it’s important to work with a professional insurance agent to get the best plan.
Property Insurance: Homeowners/Renters
Property insurance is required for most people, whether you own a home or rent.
A homeowner’s insurance policy should include extended dwelling coverage, which gives you additional protection. When you have extended dwelling coverage, your home can be rebuilt or even replaced in the event of a disaster, even if the price is more than what’s covered in your insurance policy. Consider that there’s a limit to the amount the company will cover, and that the more your home is worth, the more you’ll need to pay for extended dwelling insurance.
Ask your insurance agent about what’s covered in your homeowner’s policy, as well as what isn’t covered. For example, usually flood insurance isn’t covered and is not the same as water backup protection, so check with your agent regarding all the details. If you live in an area prone to earthquakes, your policy may include earthquake coverage. Again, check with your agent.
Even renters need a renter’s insurance policy so their belongings can be replaced if damaged from weather events, fires, theft, or other problems. If you don’t have renter’s insurance, you’re responsible for the cost of replacing your belongings.
Driving around without auto insurance is not only risky—it’s also against the law and can result in a hefty fine and suspension of your license. All drivers in the United States must buy auto insurance if they own a vehicle and have a driver’s license. Auto insurance covers your vehicle, motorcycle, or other type of personal transportation.
Besides helping with personal medical costs in the event of an accident, it also covers repair costs of your vehicle and any expenses you may have from liability that involves the other driver and/or the damaged vehicle. There can be variations in additional coverage, though the basic ones are generally the same. You can select from several options.
- Auto liability coverage: This only covers damages or injuries to third parties, including their property, but does not cover the driver and his or her property. In most states, drivers are required to carry a minimum amount of liability insurance.
- Collision covers the expenses for repairing or replacing your own vehicle.
- Comprehensive includes coverage for your losses that are not the result of an auto wreck, such as fire, hail, flood, and vandalism.
Health and Life Insurance
Health insurance is perhaps the most important type of insurance you can get, and it’s the most common one, as everyone needs some form of health insurance for paying for costly medical care. Basic doctor visits and treatments are covered in most policies, but treatments that are specialized can depend on the insurer and the policy.
Often, employer-sponsored health insurance involves deducting a certain amount from an employee’s paycheck each month. You can also purchase your own type of health insurance.
You may also need life insurance if you have a family and want to ensure your family members will continue to receive an income after you die. Life insurance also helps in paying for burial costs, which can be pretty exorbitant. To determine the amount and type of life insurance you need, consult with an insurance agent.
How to Get Personal Insurance & The Benefits of Using an Insurance Agent
You can find insurance through group plans at your job, by shopping around, or by working with a trusted insurance agent. There are several advantages for using an insurance agent when deciding on a policy:
- A professional insurance agent can help in getting the best premiums.
- A highly trained and experienced agent will take time to explain how plans vary and what a policy means. These insurance pros can help you find the plan that best fits your specific needs. They can answer your questions and will listen to your concerns.
- A reputable insurance agent will give you good customer support, making it easy to get in touch with him or her whenever you have questions or need to make changes in your policy.
- An insurance agent has the proper certification and is licensed. What’s more, these professionals must continue to take additional training in order to maintain their license.
Other Considerations and Warnings
- Long-term disability insurance covers people who are injured and cannot work temporarily or may never be able to go back to work.
- Don’t be tempted to buy only the liability portion of your auto insurance. Consider how a clever lawyer can wipe out your bank account if you are responsible for an accident resulting in someone becoming paralyzed.
Not sure where to start with any of the policies described above? We can help! Visit insureyourhome.com to get a free quote for your personal insurance needs.