I feel like people are one of two ways with insurance. 1) They recognize it’s vital to their financial situation and get adequate insurance in every applicable area or 2) think insurance is a big waste of money.
The truth is insurance is important. However, if you’re getting more insurance than you need than it can become a big waste of money.
Here are the common insurances and reasons you would need each.
This is definitely the most common form of insurance. Everyone in the U.S. who owns a car is required to have at least state minimum liability insurance. If you have a loan on your car then the bank will require you to carry full coverage.
You should have enough liability insurance coverage to protect your assets in the case of an accident. For instance if you have liability limits of only $30,000 per incident and end up totaling more than two other cars it’s going to take much more than $30,000 to cover the expense. Your insurance will max out at $30,000 and you’ll be required to pay the rest of the bill.
Health insurance is another insurance that everyone needs. Even if you’re young and healthy – you simply can’t predict the future. You don’t know if something catastrophic is going to happen.
The good news is that if you are young and healthy you can purchase a catastrophic insurance plan at a decent rate.
Life insurance is an insurance that not everyone needs but those who do often skip it.
If you have a spouse, kids, or a cosigner on a loan then you absolutely need life insurance. Life insurance rates can vary widely and are dependent on a number of factors. You can use a site like Insurechance.com to check the prices of life insurance.
Other Types of Insurance
There are also a couple other types of insurance you might need some point in life. For instance, if you’re a business owner you may be required to purchase liability insurance in some situations. In others you’ll want to insure any substantial business property.
If you take on a mortgage without putting down a full twenty percent then you’ll be required to pay PMI or private mortgage insurance. This insures the bank in the event that you would default on your loan.
It’s important to assess your financial situation and determine what insurances you need to protect yourself and your family.