Three types of insurance you MUST have

When evaluating what kind of insurances we must have, three come to mind, of course, there are dozens of insurances one can buy making it more difficult and confusing to choose which ones we really need. There are three different coverage’s we consider essential: Possessions, Health, and Life insurance.

 Possession is a broad word, by possessions we mean, homeowner’s or renter’s insurance, depending on your case, and car insurance.  When in the market for homeowners insurance you must take a few items into consideration.  You need to make sure your homeowners or renter’s insurance will also cover some of your personal belongings: Jewelry, art, and electronics.  Let’s begin with the protection of the property in the case that you are a homeowner.  Here you have two options: to buy a cash value policy or a replacement policy. 

A cash value policy will pay for the value of the property at the time of the incident that means, if you bought your property for 500,000 but at the time it got ruined it was worth 450,000 that’s how much your cash value policy will pay for.  The other option is to buy a replacement policy, this is more expensive but it guarantees you that you will be able to rebuild your house from scratch at a comparable quality of the one destroyed.  When buying either one of the policies, don’t forget to tell your agent of any home improvements you have made. It’s important that your homeowner’s insurance also covers personal items such as jewelry, art and electronics. 

Every insurance company is different, but personal belongings are usually covered up to 75 % of their face value.  In the event that you are in the market for renter’s insurance, you need to make sure that your renter’s insurance also covers the belongings mentioned above: jewelry, art and electronics. Last but not least, it is important to keep a list of the personal items that you have and considered to be included in your homeowners or renter’s insurance.  This will make it easier in the event that you do need your items to be replaced because they were stolen or destroyed in a disaster. 

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