A recent article in USA Today caught my attention. Homeowners affected by Hurricane Katrina were contesting the language of their insurance policies in regards to storm surge or ground flooding. A judge upheld a ruling that the policy language is clear about not covering the damages. None of the people that filed the lawsuit had flood insurance. Now the victims will experience the true fallout of the Katrina damages when foreclosures and bankruptcies skyrocket in New Orleans.
I am a property claims adjuster, so this article was very interesting to me. It started me thinking about what types of insurance all adults should have, no matter what phase of their lives they are in. Here are the top four types of insurance that I believe everyone should consider buying in order to protect their assets and maintain financial stability.
1. Auto Insurance
This is an obvious one—it is illegal to drive in the United States without some form of auto insurance. Do your research, and shop for the best. Go to an independent insurance agent whom can shop different companies to find the best rate and policy that suits your needs. Save money on the premium by opting for a higher deductible or cutting out collision coverage if your car is more than 7 years old. Do not, I repeat, do not go cheap on the liability portion of auto coverage. If you cause an auto accident and someone becomes paralyzed by your negligence, an attorney will take you to the cleaners without possessing proper liability insurance.
2. Health Insurance
There are plenty of people between the ages of 18 and 30 who lack health insurance. In college I was one of them. I had major accident insurance, but I did not have a standard health policy. Luckily, the worst ailment I ever had in college was influenza. Health insurance can be expensive, but it is important—one semi-major accident or illness and you will be paying medical bills for the next 10 years. There are plenty of universities that offer plans catering to students, and the premium is reasonable. If your employer offers a health plan in their benefits package, sign up for it. Usually they will foot the bill for most of your monthly premium.
3. Property Insurance
This coverage applies to renters and homeowners. If you own a home, condominium or townhouse, then you need to have a homeowner’s policy. The standard homeowner’s policy is the most bang for your buck in terms of what it covers as an insurance policy. Many people think that homeowner’s insurance is lousy (especially if you live in Florida), but it offers a lot of coverage.
Firstly, it covers your home for everything. Secondly, it covers your personal property anywhere in the world, and the policy will list out all that is considered “personal property.” The policy will also cover you to stay in a hotel during home repairs if your home is deemed unlivable. Lastly, it extends liability coverage if a third party sues the policyholder for being injured on the policyholder’s property. Your home is your biggest asset, and you need to protect it. If you rent, get a renter’s policy. It covers your personal property for perils such as theft, water damage, fire and lightning. It also has a bit of liability coverage built into it. A renter’s policy is literally $10 – 15 per month. Cut out two pizzas per month, and you can afford it.
4. Long-term Disability Insurance
Many people forget about this insurance and seldom purchase it. Young people especially like to think they’re invincible. The fact is that accidents happen all the time, and it’s wise to protect yourself if something tragic happens that hinders you from returning to work. Long-term disability insurance kicks in when a severe injury occurs that renders an individual to be disabled for longer than six months. It supplements the income that one would have earned if he or she were not disabled. This insurance is rated largely by type of occupation. Someone in a desk job would have a much lower premium than a construction worker in a high-risk environment.
These are four types of insurance that are indispensable to everyone to care for themselves, their belongings and their families, no matter their phase of life. It’s wise to prepare for the future and protect what God has given you, and it’s wise to consider what insurance you may need to do so.