5 Types of Personal Insurance, Explained
No one wants to think about having to use personal insurance. We’d all like to believe that life is free of error and mishaps, but it is far from that.
Unfortunate events and natural disasters happen all the time. Since we can’t control the unknown, the next best thing is to insure ourselves against it.
It’s important to know your options so you can select good insurance coverage. Here’s an overview of five types of insurance you can use to protect yourself and your family.
What Is Personal Insurance?
Personal insurance covers you and your family. It’s different from work-related insurance or business insurance because it covers single people and families. Personal insurance covers the life, health, and assets of you and your family members.
This matters because the United States sees an estimated $310 billion spent each year on tort lawsuits. In today’s litigious society, being insured is the only way to gain some peace of mind that you won’t lose everything if you are sued.
Types of Personal Insurance
Personal insurance has evolved over the years to protect people from more and more complex types of risk. This list covers several important insurances you should consider and reasons why.
Health Insurance
Over half of all bankruptcies in the U.S., 62.1%, were caused by medical expenses. Even if you do your part to stay fit and healthy by watching what you eat and leading an active lifestyle, you could still get sick or injured.
When this happens to people, they can face astronomical medical expenses that are impossible to pay off. Unfortunately, the life-saving medical treatments that we’ve all come to expect cost a lot. And that cost is passed on to patients and their families in many cases.
If you do not have good medical insurance, it can take years and sometimes decades to pay off your hospital bills. The high cost of care has been fatal to some patients- they skipped checkups or delayed treatment because of the inability to pay.
So don’t neglect getting insured! Even though you might not want another monthly bill, paying this premium will save you from financial ruin if misfortune strikes.
Homeowners Insurance
Homeowners insurance is designed to protect you from fire, natural disasters, break-ins, theft, and mechanical problems. It can also protect you if someone is injured on your property through a slip and fall or a dog bite.
In most cases, you have to show proof of homeowners insurance to qualify for a mortgage. This is because the banks don’t want to be stuck with uninsured property in the event of a disaster.
Check with your mortgage lender to see if homeowners insurance will be included in your monthly payments. If it’s not or you want additional coverage, you should be able to find a plan on your own. Regulations vary by state, so for best results familiarize yourself with what’s expected in your area.
Rental Insurance
Like homeowners insurance, rental insurance protects your personal valuables against theft and loss while you rent a home. Most apartment complexes don’t require it, but it’s a smart choice.
Rental insurance can also protect you from liability if something breaks or goes wrong in your building. You might not expect the dog to pee on the carpet, but life happens. It’s better to be insured than on the hook for rug replacement costs!
A variation on rental insurance applies to roommate situations. Renting a room in someone else’s home is common in some cities where apartment and home rents are ridiculously high. If you have roommates, renter’s insurance will protect your possessions from theft by those roommates or their guests.
Vehicle Insurance
Vehicle insurance is mandatory for most drivers. In most states, you must be insured to drive unless you want to pay steep fines and risk losing your driving privileges.
Liability insurance protects you in the event that someone is severely injured in an accident that you’re involved in, or there’s damaged property. Collision insurance pays for car repairs if your car is damaged.
When selecting your vehicle insurance coverage, it’s important to carefully consider how much coverage you will need. Although it may be tempting to select the minimum amount of coverage, as with other types of insurance, this could prove to be a costly mistake.
Car accidents can cost hundreds of thousands of dollars for medical treatment and property damage. If you are an underinsured driver, you could face bankruptcy if an injured party sues you.
Most drivers never think they’ll be in a serious accident- until one happens to them. At that point, being well-insured will help them recover more quickly and avoid severe amounts of financial stress.
Life Insurance
People who buy life insurance never want to use it. It goes to the holder’s family or other designees, in the event that the holder passes away.
But without it, should the worst happen to you, your family faces paying for funeral costs. Funeral costs can range between $7,000 – $12,000, as of 2020.
Most life insurance plans are affordable, so you shouldn’t have to worry about draining your wallet for a good policy. If you’re thinking about an upcoming vacation and want temporary life insurance coverage, check with your airline or traveler’s policy to see if it’s included.
Personal Insurance Coverage for You
So now you’ve seen several types of personal insurance available to you. Whether you need coverage while you rent, drive, entertain, or vacation, buying personal insurance is a wise choice.
We specialize in quick and efficient service. Over the years we have developed relationships with local contractors, real estate agencies, and mortgage firms so we can resolve your issues promptly.
We would love to meet you and find out how we can be of assistance. To discuss your individual insurance needs, contact us today.