Today, it seems like you can’t go 15 minutes without finding an advertisement for insurance. But do we really understand what insurance is about, and what it’s for? Honestly, before doing research, I honestly had no clue. I didn’t know what to look for in insurance, what kind of insurance I needed, or even why I needed insurance. But I probably could’ve recited the jingles and slogans of most of the major insurance providers today.
Turns out, insurance is pretty important
Life is pretty unpredictable, and can change in an instant — and not always in a good way. Insurance is protection against something potentially going wrong. You make payments (called “premiums”) in exchange for a policy that pays out money when it’s needed. It’s a way for you to plan ahead to protect yourself and your family. So let’s take a look at some of the more common types of insurance coverage you might need.
Have car, need insurance
If you drive a car, you need auto insurance. Period. Seriously. Almost all states require drivers to have at least minimum levels of auto insurance coverage. But insurers offer a lot of other types of coverage that you also should consider.
- Liability insurance provides coverage if you’re in an accident that’s your fault. It covers the cost of repairing any property damaged by the accident, and medical bills from related injuries.
- Collision coverage pays for repairs to your car (if the accident is covered under your policy). If your car is totaled, it will pay the value of your vehicle.
- Comprehensive coverage pays when something happens to your vehicle that’s unrelated to an accident, like if you hit a large animal on the road, your car is damaged in bad weather, or your truck is stolen.
- Accidents often result in injuries for you and your passengers, and medical bills aren’t cheap. Personal injury protection covers those medical bills — for you and your passengers — regardless of who is at fault for an accident. (This coverage isn’t available in all states, though.)
Even though states require it, that doesn’t guarantee that all drivers on the road are properly insured. You might find yourself in an accident and the person responsible doesn’t have insurance (or has the bare minimum) and won’t be able to cover all accident-related expenses. Uninsured/underinsured motorist protection helps covers the cost of any damages that exceed the other driver’s coverage amount.
Is renter’s insurance actually a thing?
Yes it is. And it’s something you should think about, even if you don’t think you own anything valuable. Why? Because you can’t control your neighbors or predict what might happen.
Think about it: You’re relaxing in your apartment one evening, thinking about heading to bed, when all of the sudden the fire alarms go off. Turns out, your neighbor fell asleep on their balcony with a lit cigarette in their hand. Now, the entire building is on fire and your apartment is quickly filling up with black smoke.
Your landlord’s insurance might cover damages to the building, but it won’t cover your damaged belongings. If you have renter’s insurance, though, you’re protected — and will have the means to repair or replace your stuff.
Buy a home, definitely get insurance
Your home is one the most important — and most expensive — purchase you’ll likely make in your life, and it’s important to make sure it and your possessions inside it are covered.
Homeowners insurance offers a wide range of coverage options, to protect more than what you might expect. Not only does it cover the physical structure of your house, but typical homeowners insurance policies also help cover damage to and theft of your personal possessions and other structures on your property. They also offer liability protection in case someone gets hurt on your property and you end up legally responsible for damages. Long story short, homeowners insurance is crucial in times when misfortune occurs.
Do I seriously need to think about life insurance?
I know life insurance isn’t the most exciting thing to think about, but yes. You should give it serious thought. Why? Because you can’t predict the future, but you can help protect your family in the event of an untimely death. Life insurance covers things like funeral expenses, everyday bills, childcare, income for your spouse, and more. If you’re self-employed, life insurance can also help keep your business up and running if you die.
And life insurance isn’t as expensive as you might think. In fact, if you purchase a life insurance policy when you’re fairly young, you’ll likely have pretty low premium payments!
The bottom line
You have a lot going on in life, and it’s worth protecting. Whether you’re looking for auto, renters, homeowners, life or any other type of insurance, look for policies that suit your financial situation and provide adequate coverage for a variety of potential scenarios.
Nahshon Lora from Goshen, Indiana, interned at Everence during the summer of 2016 and is a member of the Goshen College Class of 2019.