7 Must-Have Insurance Policies

Whether you consider it a tool for peace of mind or a necessary evil, insurance is a must for living in the modern world. Lacking insurance for your car can cost you your license if you get in an accident. A home without insurance could be impossible to replace or repair if it’s damaged. And there’s a reason health insurance is an ongoing national debate — medical bills and bankruptcies affect approximately 50% of the nation’s families.

But is there some insurance you can absolutely do without? Possibly. Some of that depends on your financial situation. But there are a few types of insurance that you should definitely consider not doing without.

1. Homeowner’s or Renter’s Insurance

A home is a serious investment all on its own — there’s mortgage, upkeep, and repairs to think about, not to mention all the belongings you keep there. It only makes sense to protect that investment as much as possible. In case of fire, flood, burglary, or some other incident, you want to make sure you’re covered.

When you’re looking around for a good home insurance policy, choose one that covers the replacement of the house’s structure and its contents, as well as the cost of living somewhere else while you wait for rebuilding or repairs to finish. Keep your insurer informed about any changes or improvements you make to the house, as this could affect the value of your home and, subsequently, the payout you’ll get in case the worst does come to pass.

If you rent instead of owning your home, you may think insurance isn’t possible (or necessary). Not true! Rental units are every bit as vulnerable to misfortune, and you and your possessions deserve protection even if someone else owns the property. The good news is, renter’s insurance tends to be cheaper than homeowner’s insurance, especially if you look around and compare rates

2. Auto Insurance

Auto insurance is must-have for one good reason: it’s the law. There are approximately six million car accidents on the road per year, and an accident can not only incur damage to your car, but also injury to yourself or others. This is particularly important when it comes to liability — if you happen to be liable for the accident and injure someone else, you could be responsible for their medical bills — a potentially life-changing financial burden. Not to mention the fines and legal problems you’ll incur if you’re caught driving without insurance.

If you’re worried about expenses, you should know there are varying levels of insurance you can take out for your vehicle: simple liability, collision insurance, personal injury insurance, car theft insurance, and comprehensive coverage (which includes all of the above). Learning more about car insurance can help you find the best rates.

3. Health Insurance

Medical costs are soaring, and with them, the number of medical bankruptcies suffered every year. Even the smallest injury or routine visit to the doctor can be more than some are able to afford; a major surgery or lengthy hospital stay can incur a truly incapacitating amount of debt. The costs for health insurance may not be very appealing, especially as you get older, and insurers ask for more in premiums. But even the hefty cost of health insurance beats the alternative when something finally does go wrong with your health.

4. Life Insurance

Most everyone wants their loved ones to be well taken care of after they die. Life insurance is a common way for individuals to protect their spouses, children, and other loved ones. The death of a loved one is not only a profound emotional shock, but it can also be a financial shock due to the costs of burial, any ceremonies, and other unexpected monetary hurdles. Find a life insurance policy that’s right for you and look into a living will while you’re at it.

5. Travel Insurance

If you’re a frequent traveler, being protected while abroad is likely to be a major priority. If something should happen to you while traveling — illness, getting stranded or robbed, or other unforeseen calamities — travel insurance will help bring you peace of mind. It can even come in handy if you want to cancel a trip.

6. Disability Insurance

The thought of becoming disabled long-term, or even permanently, can be a frightening subject. But as we age, our chances of being fully able-bodied shrink, and it’s good to have some protection. Disability insurance can offer a monetary benefit equal to a certain portion of your working salary, to be paid in the event you’re no longer able to work.

7. Pet Insurance

A lot of people don’t think about insurance for their pets — but pets can be as important a part of your life as other loved ones. If your pet gets sick or injured and need surgery, those medical bills can be every bit as burdensome as those for humans. This becomes truer as your pet gets older and needs more loving care. Although you may need to pay a deductible out of pocket, pet insurance can be a big help when it comes to your peace of mind.

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