Last week, I started us on a journey down the path to learn what types of insurance are out there and whether or not they are something you should consider. Of course there are plenty of opinions out there and so I hope my post, plus the comments that got added, helped you if you were trying to figure all the insurance mess out for yourself. Today, I’m continuing with some additional insurance types and we’ll see where we land at the end. Let’s dive in.
Homeowner’s / Renter’s Insurance
What happens if while you’re on vacation, the water line to your ice maker bursts and floods your kitchen and entire basement? We had some friends that had this happen. What happens if you decide to grill those burgers a little too close to the house and catch the place on fire? What happens when a thunderstorm blows the big tree in your front yard into your bedroom via the newly-created hole in your roof? What happens when a burglar decides your stuff is now his stuff? You get my point. Whether you own or rent – have insurance. If you own, get replacement cost insurance. If you rent, be sure your renter’s insurance covers all the stuff you would miss if it were to disappear.
Disability / Long-Term Care Insurance
People get hurt all the time. AFLAC makes millions with their little duck telling people they need money if they can’t work and he’s right – if you can’t work, how do the bills get paid? Many companies offer short-term disability as an employee benefit, but after that, then what? Your emergency fund (you have one of those, right?) will cover you for a while, but if you don’t have long-term disability insurance, you are risking a lot. Some employers offer both short- and long-term disability to employees. If not to you, check into this. It usually isn’t too expensive and will help you sleep at night. Once you reach about age 60, you also NEED long-term care insurance. If you make it to 60, chances are you will live to be old enough to need some assistance. Whether it be a full-blown nursing home or a simple assistant to periodically check in on you, long-term care is EXPENSIVE and it will drain your bank account fast if you don’t have this type of coverage. Until you reach 60, this isn’t a big deal. But once you’ve celebrated the big 6-0, get this.
Hate me if you will, but I think pet insurance is ridiculous. Pets will get sick and sometimes the care costs a lot. But based on what it costs, pet insurance is a ridiculous, emotion-based coverage that isn’t worth it. Before you call me a heartless and horrible human being who hates all animals, let me tell/remind you that I’m a parent to a “furry daughter” (Dottie – our dog), whom I love very much and consider to be one of my children. We’ve also had to spend some money on her medical needs, even to the point of seeing a specialist for her back issues (she’s a Daschund).
There may be a point at which you have some significant assets. If you’re someone who may be the target of getting sued because you’re a “bigger fish” than the normal guy who might get in a car accident or have someone hurt on your property, you should consider an umbrella policy. How does it work? If your auto policy covers $250,000 worth of liability, an umbrella policy would pick up where that policy leaves off to protect you further. For the average person, $250,000 is plenty, but what if you are sued for $1,000,000 and lose!? In our litigious society (in other words, we live in a world that chases “easy money”), an umbrella policy basically adds some extra cushion to any of your other policies. I don’t have one of these policies but when we have some more assets that insurance may not cover, I plan on getting one.
Shew…between last week’s post and this one, that was one big list! I could keep going with lots of other insurance types, but I think I’ve hit all the big ones. Feel free to add your thoughts on any you like in the comments below and I’ll add my thoughts on those as well. If you’re trying to navigate the mess of insurance options out there, I hope this has given you some food for thought.