If It’s Worth Owning, It’s Worth Insuring

You have value, as do your loved ones and the things you’ve worked hard for. Insurance coverage helps protect you and them financially from the unexpected, including damage, theft, loss, and even death. Having the appropriate insurance can save you a lot of money and heartache, because when it comes to financial emergencies you don’t want to be caught without coverage. The following types of insurance can protect your assets from being dissolved by a financial emergency.

1. Homeowners and Renters Insurance

Whether you own a home or rent a property, it is important to have coverage for the place you live, especially if you’re a homeowner, where it may be required. The following are some of the ways homeowners insurance (HO) and renters insurance (RI) differ: 

• HO can cover costs to repair or rebuild your home.
• HO provides coverage for your personal property in the event of theft and/or damage.
• HO does not cover floods or earthquakes (these may be covered at an additional cost).
• RI is less expensive than HO, and is available to people who rent or lease a home, apartment, or mobile home.
• RI covers losses to personal property from events that include hail, explosions, riots, vandalism, and volcanoes. 
• RI provides liability coverage in the event you get sued for an injury or damage incurred at your home by other people.

2. Health Insurance

Health insurance, while costly, is an important coverage expense because it is not a question of how but when you will get sick. If you don’t have health insurance, check with your employer. If you are unable to acquire it through work, check if your state offers health insurance through the marketplace provided by the Affordable Healthcare Act.  

3. Life Insurance 

While most insurance policies are designed to protect you in the event of an emergency, life insurance is a benefit that you leave behind for your beneficiaries (e.g., family, friends, charitable organizations, and so on) in the event of your passing. Since your life insurance premium is determined by your age, health, and gender, it is recommended that you acquire it when you are younger and presumably healthier. As you age, your overall health is likely to decline, which means higher premiums and a greater risk of being denied coverage. Here is a list of life insurance types: 

4. Term life insurance: Term 10, 20, 30 

5. Permanent life insurance

Index universal life

Whole life

Universal life

Variable life 

6. Vehicle Insurance 

Every licensed driver is required to have a minimum amount of car insurance. Having it is one thing; knowing what you have and whether it will leave you optimally protected is another. The average cost of a vehicle accident varies in each state from $5,000 – $60,000, and sometimes your state’s minimums may barely be enough to cover an accident if at all. As long as you’re driving a vehicle, having comprehensive, collision, and uninsured motorist coverage is a smart choice. With the rise in extreme weather events, comprehensive coverage can help protect against unexpected damage, and uninsured motorist coverage ensures your vehicle can be repaired even if the other driver lacks insurance.

Collision insurance pays for: 

Damage to your car in an accident you cause 

Damage to your car if you hit an object such as a fence or pole 

Damage to your car if someone else hits you. Alternatively, you can make a claim against the other driver’s liability insurance.

Comprehensive insurance pays for: 

The actual cash value of your car if it’s stolen and not recovered as well as damage from: 

Natural disasters 

Falling objects 

Theft or vandalism 

Fire 

Crashes with an animal, such as striking a deer 

Civil disturbances 

Minor windshield damage 

Uninsured motorist insurance pays for: 

Medical expenses 

Funeral expenses 

Loss of income 

Pain and suffering expenses 

Emergencies happen every day without warning and can quickly drain your assets. Determining the appropriate amount of insurance coverage is an important part of a protection plan. Consult a financial professional when needed and take the time to understand what your insurance policy will cover and not cover because not all insurance policies or companies are created equal.  

Samuel Molina is an Accredited Financial Counselor® and CEO and Founder of The Academy of Financial Education, a non-profit organization dedicated to narrowing the wealth gap for its community through activities, coaching, education, and instruction. Visit Samuel’s FindAnAFC profile to view his services and connect with him on LinkedIn.