6 Types of Insurance and Who Needs Them by Tracie Johnson

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Insurance is big business. After all, it’s used to protect you, your family, and your belongings from various dangers. Hence, the reason why there were close to 6,000 insurance agencies in the U.S. at the end of 2019.

There are several forms of insurance that you purchase for personal use or your business. Case in point, here are 6 types of insurance and who needs them.

1. Auto

One of the most common forms of insurance is for your personal or business vehicle. It’s also a policy that is somewhat mandatory across the country. In most states, you’re required to purchase auto insurance to operate a vehicle.

For businesses, a policy is needed if you or your employees drive their personal cars or company-owned vehicles. It not only covers your workers in an accident but also helps pay for damages if another party’s automobile is damaged or they need medical treatment.

2. Home

Homeowners insurance is also a standard purchase to close on a residential property. This form of policy covers theft, fire, and damage due to natural disasters like a tornado or hurricane. Riders are added if protection is required in areas prone to floods or earthquakes.

A subset of this type of policy is renters insurance. It covers many of the same items as homeowners insurance when it comes to personal belongings. However, the premiums are considerably lower since you only pay for damage to your property. The landlord’s homeowner’s insurance covers the rental itself.

3. Health

Health insurance is the type most people are familiar with. Additionally, it’s the category they deal with the most. Even if a policyholder is generally healthy, they still utilize health insurance for bi-annual checkups.

Individuals need this form of protection to minimize payouts to providers. In most cases, full-time employees have the option to purchase this insurance from their workplaces. Others opt for Medicaid or programs under the Affordable Care Act (ACA). The goal is to find a plan with low premiums and high rates of service.

4. Jewelry

Jewelry insurance handles several types of coverage save for military action or nuclear hazards. Among the policy’s offerings is the protection from theft, loss, or disappearance. Your items are also secure from natural disasters and when you travel abroad.

This type of insurance is not for costume pieces. This covers heirlooms passed between generations as well as new and expensive items. Acquiring jewelry insurance is a worthy return on investment as some companies have a $0 deductible for replacement or repair.

5. Travel

Travel insurance tended to be ignored by individuals and families in the years before COVID-19 struck. Today, it’s considered part of a vacation budget.

Travel insurance covers delays, interruptions, or cancellations by the policyholder. Furthermore, disruptions by an airline or hotel should be covered by a policy. Personal property is also handled by travel insurance when luggage is lost or damaged by a third party like an airline.

6. Worker’s Compensation

Worker’s compensation insurance is required for businesses. It doesn’t matter if they have three or 300 employees, a policy is required to protect their company from potential damages due to a worker’s injury or death.

This compensation insurance covers the costs of hospitalization, after-care services, and expenses lost when the employee can’t return to work. Should issues escalate, then the policy handles the legal fees related to an attorney and the courts. On top of this, it pays for worker’s compensation settlements.

Conclusion

The six types of insurance listed are a small number of available policies. For instance, life insurance covers costs related to your burial as well as helps pay off any remaining debt. General liability insurance is needed by small and big businesses to cover standard issues related to injuries or accusations of libel.

Choose wisely when it comes to an insurer. Examine their offerings and premium payments to get a proper idea of their return on investment. If you don’t need a policy at this time, then don’t purchase it. Instead, focus your budget on the insurance you truly need.

Don’t think about these insurance types as another expense. Consider them an investment for the future. Usage of the right policies, such as auto and home, maximizes the value of your items. Furthermore, should you run a business, it provides a sense of security that your customers appreciate.