Insurance is an important part of making sure your future is secure. In fact, almost every individual has some insurance, and Statista shows that insurance premiums written in 2021 totaled $1.36 trillion.
Insurance is a financial commitment, and you want to ensure it’s worth it, so selecting the right one is vital. Here are some common types of insurance that people should consider:
Auto insurance protects you and your car in case of injury, damage, or theft. It also covers medical expenses for injuries to yourself and others in the car.
If you’re at fault for an accident, your auto insurance company will pay for repairs to the other person’s vehicle up to its market value. If it’s not clear who was at fault, both drivers’ insurers will pay out on their insured driver’s behalf based on the extent of injuries sustained by each party involved in the accident.
Auto insurance costs vary depending on factors like age and driving history. However, there are ways that you can reduce these costs:
- Maintain a good credit score: A higher credit score indicates better financial responsibility, meaning lower rates on auto insurance premiums. Make sure all bills are paid on time every month. In 2020, residents of Massachusetts maintained an average credit score of 729.
- Pay off any outstanding loans before applying for new ones: Credit scores consider how much debt someone has relative to their income, so paying down debt helps improve this ratio. If possible, you’ll want less than 30% but try not to go below 20%.
Homeowners insurance is a mandatory purchase in Massachusetts and most states. It protects your home and belongings against fire, theft, storms, and other disasters. According to the Insurance Information Institute, the number of homeowners and renters insurance issued under Fair Plans in 2021 was 202,610 in Massachusetts.
Homeowners’ insurance can be expensive, but it’s worth it. If you have a mortgage on your house, lenders require that you carry homeowners insurance as part of their requirements for granting loans. Homeowners can also get an additional rider that covers personal liability claims against them by others who visit their homes or are injured on their property.
You can quickly find the best homeowners insurance in Massachusetts by connecting with an insurance agency. Nowadays, insurance agencies can work directly with your loan officers and lawyer to ensure you get the best package. E.J. O’Neil Insurance Agency also follows the same practice of connecting with your loan officer to get you homeowners insurance at low premiums.
The company has also garnered many reviews on Google and Facebook and enlists them on its website. You can open the reviews or testimonials page of any such insurance agency’s website and go through them to find the right fit for your needs.
Life insurance is a financial safety net for your family. If you die, it can be used to pay off debts, cover funeral costs, and help with expenses like medical bills or college tuition.
- Term life insurance: This type of coverage lasts for a fixed period, the “term,” and pays out upon death during that period. A common choice among young people who have no dependents at home yet but still want some protection against unexpected circumstances like accidents or illness requiring hospitalization, term life is relatively inexpensive because it doesn’t offer any cash value over time. That being said, there are still plenty of options available if you want coverage that lasts until age 100+.
- Universal/whole life: This type of policy provides both death benefits and an investment component, unlike term plans, where the payout amount remains unchanged throughout the policy’s duration, no matter what happens with interest rates or inflation rates down the road.
Disability insurance is a type of insurance that helps to protect you against loss of income due to injury or illness. Disability insurance can be purchased as an individual policy, but it’s usually offered through your employer.
If you don’t have access to this type of coverage, consider purchasing it from an insurance carrier directly as an individual policy. 40% of civilian workers accessed short-term disability insurance, and 35% accessed long-term disability insurance in March 2020.
In Massachusetts, disability insurance policies are regulated by the Division of Insurance (DOI). This means all policies must meet certain minimum standards set forth by state law before being sold in Massachusetts.
Health insurance is a must-have for anyone living in Massachusetts. If you get sick and don’t have health insurance, you may have to pay out of pocket for your medical bills. This can be expensive and puts a lot of strain on your finances, especially if you’re already struggling with payments for other types of insurance.
Health insurance also helps ensure that when something happens to one family member, others can care for them without worrying about paying out large sums of money themselves.
Flood and hurricane insurance are two policies that can help protect your home from damage caused by natural disasters. Flood insurance is generally required if you live in a flood zone, while hurricane coverage is not required but strongly recommended.
If your home is in a high-risk area for flooding or hurricanes, it is essential to purchase both policies as soon as possible to prepare for the damage, such as the Tampa Hurricane Ian damage. It’s also important to note that these two policies aren’t the same.
While both protect against wind damage, flooding often causes more severe damage than hurricanes, requiring additional coverage beyond what standard homeowners’ policies offer.
You may have heard “umbrella insurance” and wondered what it means. Umbrella insurance is a type of personal liability coverage that can protect against claims related to bodily injury or property damage.
It’s important to remember that while umbrella policies are often used as an addition to other forms of insurance, they don’t replace them. They simply offer additional protection in case you need it. So how much umbrella insurance do you need? It depends on your situation.
If you own a home and/or have significant assets, consider purchasing at least $1 million worth of coverage per incident. This will help protect those items from lawsuits filed against them by others who might be injured on your property or due to their association with someone else’s injury claim against those items.
For example, someone slips on ice outside their neighbor’s house after coming over for dinner one night. Because there was no warning sign about slippery conditions surrounding her doorstep before entering her porch area, both parties may be liable for damages incurred during this accident by purchasing higher limits through an umbrella policy beforehand. You’ll likely only pay around $300-$400 annually instead.
The future is always uncertain, but that doesn’t mean you can’t plan for it. In fact, planning can help ensure that if something bad happens, you’ll have the financial resources needed to recover and move forward with your life as quickly as possible.