One of the most confusing things about adulthood is figuring out what insurance you need. There are dozens of different policy types, each covering a specific range of people and situations. If you're not careful, you can either overprotect yourself and end up wasting money, or you can under protect yourself and be in a rough spot when an accident happens. Rather than taking that chance, here are three types of insurance you need.
The first type of insurance you may want to consider is personal liability coverage. Many people associate liability insurance with businesses, but it can also be incredibly useful for you, especially if you have a family. For instance, if you have children and one of your kids hits a baseball through your neighbor's window, having a personal liability plan will help cover the replacement costs. This insurance extends to you and anyone related to you in your household, keeping your family protected from accidents that happen at home.
Along similar lines, having personal liability insurance can protect you and your family in the event of injury on your property. If you have a contractor coming for some repairs and they get hurt, having an insurance policy in place can keep you from having to potentially pay thousands of dollars in damages. Even if someone just comes onto your property and a crack in your sidewalk makes them trip, having extra coverage to back you up will give you peace of mind.
The second type of insurance you may want to have is a home insurance policy. Homeowners insurance isn't required by law, meaning you don't technically have to have it in order to buy a home. However, if you take out a mortgage or home equity loan, your lender may need you to get some form of coverage to protect their investment. When it comes down to it, you may want to have home insurance anyway.
No one can predict an accident. As much as you can prepare for things and have safety plans in place, there's no way to entirely prevent or anticipate a disaster such as fire, theft, or vandalism. With homeowners insurance, you can get assistance in paying for these damages, as well as a potential payout for any items you lost. For instance, if someone breaks into your home, steals your electronics and damages your electricity, having an insurance policy can help you get back on your feet.
The third type of insurance you want to have is vehicle insurance. Unlike homeowners and personal liability coverage, car insurance is required by law. If you're on the road, you legally have to be insured. However, the minimum legal requirement often isn't enough for most drivers. Each state has different requirements, but the baseline policies often won't protect you in the case of theft, minor accidents, and repairs to your vehicle.
Along those lines, many of the minimum policies available have low monthly payments but high deductibles in the event of an accident. While you're legally covered, you could end up thousands of dollars in debt trying to fix your car. If your vehicle ends up totaled from your accident, many minimum-coverage policies won't cover a rental or replacement costs to help you get back on your feet. Although these cheaper insurance policies are great if you're low on funds and just need to get from point A to point B, you should consider getting a more conclusive auto insurance policy to keep you safe on the road.
To sum things up, insurance can be a confusing and stressful topic when you're trying to decide on a policy. The short answer is that there's no one right policy, but there will be one that fits your situation best. Don't be afraid to shop around between different carriers so that you can find the coverage and cost that work best for you and your family.
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