8 Different Types of Insurance and Why You Need Them
Unexpected expenses? That is covered by insurance.
There’s no denying that life will give you a curve ball. It’s a another story whether you’ll be covered when it happens.
Insurance protects you against unexpected costs such as medical bills. While most people understand the importance of insurance, not everyone is aware of the various forms of insurance available or how they may benefit.
Among the most prevalent types of insurance are:
Health-care coverage
Insurance for automobiles
Life insurance
Home insurance
Others, however, exist. Here are eight different forms of insurance and eight different reasons why you might require them.
- Health-care coverage
Why do you require it? Expected and unexpected health-care costs, such as routine appointments, medications, emergency stays, and major surgeries, can quickly build up and lead to a lot of debt for those who can’t afford them.
Everyone is in need of it.
What it is: Health insurance is a contract between a health insurer and a policyholder that mandates the health insurer to cover all or a portion of the policyholder’s medical expenses.
- Automobile insurance
Why do you require it? Driving without insurance is illegal and risky because the driver and their car are not protected in the event of an accident, collision, or theft or vandalism.
Drivers are the ones who require it.
What it entails: Auto insurance protects drivers of automobiles, motorcycles, trucks, and other vehicles from physical damage or bodily injury caused by driving, whether the incidence is reckless or an accident.
Drivers are the ones who require it.
What it entails: Auto insurance protects drivers of automobiles, motorcycles, trucks, and other vehicles from physical damage or bodily injury caused by driving, whether the incidence is reckless or an accident.
- Life insurance
Why you need it: Death is expensive — from settling an estate to preparing a funeral, the associated expenditures may really add up — but a life insurance policy can help a surviving spouse and dependents with the financial load (i.e. children).
Those who require it are those who have dependents.
What it is: A life insurance policy pays a beneficiary an agreed-upon amount of money in the case of death to meet the deceased’s expenditures. A beneficiary is the person or entity who receives benefits from a policy, such as a spouse.
- Home insurance
Why do you need it? To maintain your home’s value and to be covered in the event of major damage, such as a house fire.
Why do you need it? To maintain your home’s value and to be covered in the event of major damage, such as a house fire.
Homeowners and landlords are the ones who require it.
What it is: Homeowners insurance protects your home as well as any attached structures like a porch, garage, or balcony.
- Having an umbrella policy
Why do you need it? If you think you might need additional coverage in addition to another type of insurance policy, such as one for your home or car, umbrella insurance can help protect you from being sued for damages.
Who requires it: Anyone who is currently covered by insurance
What it is: Liability insurance is sometimes known as umbrella insurance since it covers expenses not covered by other policies.
6. Rental insurance
Why do you require it? Things happen, as every tenant knows, and they take precautions to safeguard themselves and their belongings while renting. Many landlords, in fact, demand it.
Tenants are the ones who require it.
What it is: Tenants purchase renters insurance to protect personal property in the event of loss or theft that is not the landlord’s fault.
- Purchase travel insurance
Why do you require it? Are you planning a trip to a new location? Then double-check that your flight is covered in the event of a medical emergency or other unforeseen circumstances that force you to cancel your trip.
Travelers are the ones who require it.
What it covers: Trip cancellations, lost or misplaced luggage, travel mishaps, and even medical bills while on vacation are all covered by travel insurance.
8. Pet insurance
Why do you require it? If your pet requires emergency medical treatment, such as an emergency room visit, paying into pet insurance may be more cost-effective than paying a lump sum to your veterinarian.
Pet owners are the ones who require it.
What it entails: When a pet is injured or sick, pet insurance (primarily for dogs and cats) pays for all or part of the veterinary treatment. A wellness plan, which covers routine visits and immunizations, and a health insurance plan, which covers genetic disorders and major procedures, are the two forms of pet insurance available.
