Five Types of Insurance You Should Have

Making a big purchase like a home or car is exciting and one of the most significant purchases you'll make in your life. Lending companies require investments like these to be insured in case something catastrophic happens. However, other catastrophes not covered by home or auto insurance could be devastating financially if you're not covered. Several types of insurance can help, and below is a list of the five most important types of insurance to have. 

1. Auto

Auto insurance is one of the most common types of coverage people get. If you're on the road, this type of insurance is required. If you're currently not covered, take a look at insurance quotes, so you don't have to worry about the high cost of being in an accident while uninsured. Car insurance mandates vary by state, so you'll want to double-check. Still, the main components of most auto insurance policies include liability, un- and underinsured, comprehensive, collision, medical, and personal injury protection. Talk with your agent to find a plan that fits your specific needs. 

2. Life

Nobody likes to think about the end of their life, but a little planning in this area can save your loved ones a lot of headaches when you're gone. You don't want them to have to worry about coming up with the money to pay for your funeral along with other daily expenses. Life insurance will give you peace of mind knowing that your family will be taken care of when you're gone. 

3. Homeowners or Renters

Most people purchasing a home need to take out a loan. The bank will typically require homeowners insurance to protect their investment if your home is destroyed in a fire or other natural disaster. You will not be accountable to a mortgage for a house you can no longer inhabit because homeowners insurance will foot the bill. Renters insurance is similar in that the insurance company will pay for damages beyond the renter's control. If your house or apartment gets broken into, this type of coverage will be able to repay you for the loss. This type of insurance is relatively inexpensive and helpful for unexpected occurrences like a break-in or fire.

4. Health

You may be thinking, "I'm young and healthy. No need for medical coverage!" Think again. Studies show the average price of a visit to the emergency room went up 176% over the past decade. This averages to around $1,389 for a bare minimum stay. If you happen to need any specialty care while receiving emergency services, you can expect that cost to be more than quadruple. Say you break your ankle playing basketball or suffer sudden onset stabbing abdominal pain. Do you have a minimum of $1,300 to spare on a trip to the hospital? Most Americans don't. Start by looking into coverage offered by your employer, and if that's not an option, private health insurance may be another avenue to try. 

5. Long-Term Disability

People injured on the job can collect worker's compensation. However, studies show that 95% of injuries leading to disability do not happen while at work. If you become disabled and can no longer perform your job, long-term disability will help cover at least some of your expenses. A plan that replaces your entire income is optimal, but most plans only cover 50 to 60%. It's hard to imagine being unable to work due to disability, but it has been shown that one in four workers have to exit the workforce due to injury. 

It's impossible to predict what types of curveballs life will throw you, but prudent to assume that one will come your way someday. Rather than gambling with fate and trying to predict which unfortunate event will occur, put your and your family's mind at ease and get coverage. Even if what you can afford is a minimal amount, some coverage is better than none.