Do have a job?
Food in the refrigerator regularly?
Congratulations! You are officially adulting. You probably also have some sort of insurance.
The question is, what kind? Health insurance is basic, but what about life, auto, disability, and about a dozen other options?
More than 41 million American adults are underinsured for health, meaning they have some insurance, but their deductible or premium is more than 5-10% of their total income.
In addition to healthcare, many adults are uncovered when it comes to injury or illness that lasts more than a few weeks or for accidents and damage to their home.
Read on to explore different types of insurance.
It’s All About the Exclusions
When you have insurance, you feel like everything is covered. But is it? What’s insured and what’s not?
If you rent a home, for example, is the painting of your great-great-great uncle covered if it gets damaged by a mudslide? How about your car if your favorite NFL team loses and there are rioters in the streets?
Will your landlord’s insurance pay for the loss of the painting? If your car is set on fire and your loan still has 13 payments left, will insurance cover what you owe?
There are insurance policies for every exclusion. Here are five types of insurance that you didn’t know you needed.
1. Renter’s Insurance
If you rent the home you live in, why do you need insurance for it? The owner has property insurance, after all.
But did you know that your belongings aren’t covered?
That’s right: if your place burns down one night, your belongings aren’t covered. Your landlord is protected against loss, but you aren’t. Renter’s insurance protects your possessions.
It also protects you from liability claims. This can be very important. Even though you aren’t the owner of the building, you can be sued for any loss or damage you cause in the building.
For example, let’s say you fall asleep one night with your heater on and set your curtains on fire. You burned the building down and made three other families homeless.
You could end up paying for not only your own losses. but all of theirs too. Insurance will protect you from this type of situation. Renter’s insurance is very affordable, especially if you also include extra coverage for things like jewelry, art, personal electronics or antiques.
2. Earthquake and Flood Insurance
U.S. natural disasters like fire and floods cost $306 billion in 2017. This was the most expensive year in history. 2018 was also an expensive year, racking up $105 billion in damages.
When disasters hit, most homeowners are shocked they aren’t fully covered. Damages to your home caused by earthquake or flood are rarely covered by regular homeowners insurance. For example, residents of 42 states are at risk of damage from earthquakes. Hawaii, Alaska, California, and Washington lead the list, but Mississippi and Montana have certain risks too.
Less than 10% of homeowners carry earthquake coverage. Flooding is more common than earthquakes. Roughly 13% of the people in the U.S. are at risk of flood damage. Unfortunately, only 4% of homeowners are covered.
3. Supplemental Types of Insurance
Supplemental health insurance plans cover costs above and beyond essentials covered by your basic medical plan. Supplemental health plans provide added medical coverage, co-insurance, co-pays, and deductibles. This includes:
- Long term disability
- Out of plan coverage while traveling
- Long term care insurance
- Temporary health insurance coverage
- Dental insurance
- Critical illness insurance
- Vision insurance plans
- Short term disability
- Medicare or Medicaid supplemental plans
Most basic health insurance covers pregnancy, for instance. However, if you have a high-risk pregnancy and must stop work several weeks early, your health insurance won’t cover those costs. For that, a supplemental plan is needed.
4. Umbrella and Gap Insurance
Most homeowner and auto insurance policies have a certain amount of liability coverage. What happens when the loss is bigger than your insurance policy limit? You get sued!
Not only do you pay for your own excess losses directly, you now owe all the other people who have losses. An umbrella policy provides extra liability protection. Added on top of your existing homeowners or auto policy, it is very reasonable.
If your car is damaged or stolen, your comprehensive insurance pays. But what about if you still owe money on the car? If you don’t have supplementary gap insurance, you are responsible for paying off the loan. This regardless of whether or not the insurance company totals the car.
5. Pet Insurance
Pets are members of your family, right? Your responsibility doesn’t end with a liability rider on your homeowner’s policy. What happens when Fido or Fluffy are sick?
Medical care for pets can cost hundreds or thousands per treatment. Americans are spending more on pets every year. $70 billion was spent on pet care in 2018 alone. The vast majority of that is collars, cat litter, and food, but medical care costs are rising.
The average family can spend $6000 to $13000 on health care for their pet over its lifetime, and many more times that on a single procedure, if necessary. To protect your pet, you want an insurance policy similar to the basic care you purchase for yourself and your family.
Pet insurance is like human health insurance. It is least expensive if your pet is young and healthy. Lock in your rates and discounts before your dog needs a hip replacement or your cat has kidney failure.
If your pet already has a condition, don’t be afraid to look at pet insurance for pre existing conditions. This can help you save money in the future.
As a full-fledged adult, you have certain responsibilities. This doesn’t mean that you need to worry about all of them at once. Let insurance take some of the burden and risk from your shoulders.
Investigate different types of insurance with a trusted professional and supplement your basic policies as needed. Want to learn more? Keep reading this blog for more great tips.