Which Insurances Should You Include in a Personal Insurance Package?

For many, insurance is a topic that raises a lot more questions than answers. 

There is a type of insurance to cover just about every aspect of your life - including life itself! - and there’s enough information out there to make your head spin. With the plethora of policies available, costs can definitely add up, so it’s important to have the right insurance package for you and your family. 

Let’s talk about some of the most common and valuable types of insurance policies:

1.Auto Insurance

Most people are familiar with auto insurance, as it is required by law. For most families, having a reliable and well-protected vehicle is essential, and having the right insurance policy makes that possible. The major things to know about auto insurance are the basics of auto coverage and having a manageable deductible. Auto insurance policies can be broken down into the basics of liability, collision, and comprehensive coverage. 

Liability coverage is what covers the costs of injuries and property damage that you are responsible for in an accident. No matter your driving skills, mistakes happen and liability coverage ensures that you do not have to pay for those mistakes out of pocket.

Collision coverage deals with the costs of repairs or the replacement of your own vehicle in the case of an accident. While basic liability policies cover other drivers and their vehicles, collision coverage protects your car, no matter who is at fault.

Comprehensive coverage deals with any losses outside of an accident. Damage caused by things like vandalism, weather, burglary, or falling objects falls under this category.

The level of protection that you have within these parameters depends entirely on your vehicle and your needs.

2. Homeowners or Renters Insurance

Whether you own your home or rent the residence, there is no doubt that having insurance on your dwelling is incredibly important. Homeowners and renters insurance coverage can be broken down into two main areas: Property and liability coverage.

Property coverage manages your home and the things inside of it. In the case of a fire, flood, burglary, or any other instance of property damage or loss, your policy can cover huge chunks of the cost of replacing your items. There are limitations to the dollar amount your policy provides for certain assets, so you may also need added protection to cover especially valuable items, like an expensive piece of jewelry, in the form of a rider.

Liability coverage deals with the costs of any injuries that occur in your home. If someone falls or is otherwise seriously hurt in your home, your policy can help cover medical bills or legal fees surrounding the incident. 

By protecting your living space and the safety of those within, homeowners and renters insurance policies save you from stressing the monetary value of such personal losses.

3. Boat, Motorcycle, and Recreational Vehicle Insurance

It’s important to protect the fun parts of your life, as well!

While auto insurance policies cover your essential vehicles, you should have a package in place that makes sure your “toys” are also covered in case of accidents. Whether you really need these types of insurance is pretty simple: If you own a boat, motorcycle, RV, trailer, or anything of the sort, you should have the corresponding policy. 

These larger assets are valuable, so protecting them accordingly can keep your outdoor fun going, no matter what happens.

4. Life Insurance

If you have any loved ones that would struggle financially in your absence, you should have a life insurance policy. 

Life insurance policies cover your assets, funeral costs, and outstanding debts that would otherwise become an issue for your loved ones. The cost of your life insurance policy varies greatly depending on different factors including your age, health status, and lifestyle. 

Term life insurance policies remain intact for a certain period of time. These policies are often a good choice for parents as they provide a safety net for their spouse and children while they are young. By the time the term expires, children are often old enough to support themselves and other savings can provide for partners.

Whole life insurance policies stay active for the entire course of your life. While the amount invested in this type of policy is higher, the benefit of having coverage at all times is necessary for some. Parents of children with disabilities or those that simply do not want to risk going without coverage may find this route best.

No matter the life insurance policy you choose, it’s important to have one in place no matter your age!

5. Umbrella Policy

When all else fails, your umbrella policy likely will not. 

Umbrella policies are added protection for other insurance policies that you already have in place. In case of property damages, medical costs, or other fees exceeding the limits of your insurance policies, an umbrella policy will kick in and likely save you a lot of heartache. These policies also act as coverage for multiple insurance policies at once, making them the safety net that can save the day in a variety of cases.

If you’re interested in learning more about umbrella policies, check out our blog post on the topic! 

6. Health Insurance

Health insurance can require uncomfortable monthly premiums, but the overall savings in medical fees over a lifetime is astronomical. Health insurance plans vary in degrees of coverage but looking closely at your deductibles and premiums can help you make the right choice for yourself and your family. 

Many employers offer health insurance plans, and those are often low-deductible plans which often come at the cost of a much higher monthly premium. 

High-deductible plans have lower premiums and often come with the option to start a Health Savings Account (HSA) which, combined with the tax benefits they provide, may save you money in the long run.

It’s important to make sure the health insurance plan you have in place for your family provides protection in the areas you need most while still allowing savings where you can.

7. Disability Insurance

Disability insurance protects you in the event that you are unable to earn a living due to sickness or injury. This type of insurance would pay a percentage of your typical earned income in case you are unable to work. 

What would happen to you and your loved ones if you are sick or ill and can no longer work, either temporarily or permanently? If you own a business, disability insurance can also provide additional protections. 

The government has two well-known disability insurance programs (Social Security and worker’s compensation) but because these have restrictive terms, we do not recommend relying on these as your primary source of income if you become disabled and unable to work. 

By creating the right insurance package, you can ensure that no matter what life throws at you, you’re covered and able to focus on the things and people that matter most. 

While the options for insurance out there may seem overwhelming, finding the right insurance plan for our clients is exactly what we do at Gretchen Rehm Financial! We work with you to make sure you have the insurance plan that fits your lifestyle and coverage needs. 

Book an appointment with our team to discuss your personal insurance package!