The 4 types of must-have insurance

Let's just get this out of the way now, insurance is boring. BUT, it's also necessary so we have to talk about it. I'll try and make it as painless as possible, I promise.

My experience with insurance has ranged from having $500 of stuff stolen from my car but being unable to do anything about it since my deductible was also $500, to my health insurance getting canceled recently, to filing a claim for the thousands of dollars in damage after lightening struck my house. All that to say, I'm no stranger to all the varying shades of insurance.

You need insurance. I need insurance. Everyone needs insurance. Not just because in some cases it's required, but because you need to protect your financial life. One accident/incident/injury without insurance can derail your financial life for decades.

Here are the 4 types of insurance you need to have (and 2 bonus ones to consider):

1) Auto Insurance

You need more insurance than those ads for state-minimum coverage can provide you, but you'll have to evaluate your own situation to determine how much you need. I highly recommend going through an agent. You may save money going through an online company, but an agent can walk through your particular situation and give you advice on what you need. For example, do you need rental car reimbursement? Well, it depends on if you have access to another vehicle in the event your own vehicle is unusable. This the type of question an agent can help you answer.

2) Homeowner's/Renter's Insurance

Most people know they need homeowner's insurance so we'll skip it and talk about renter's. Renter's insurance is often misunderstood. If there is a fire and your apartment burns down, your landlord's insurance will cover the building, but your stuff is just gone with no hope of reimbursement. Renter's insurance can protect you from a situation like this. Whether it's stolen or destroyed, renter's insurance covers all your belongings.

3) Health Insurance

I used to say you need health insurance, but since it's now mandatory I guess I don't have to say that anymore. But, you really do need health insurance. I have seen financial lives decimated by just a few months gap in coverage. As for understanding all the new healthcare laws, you're on your own there. I've got no idea.

4) Life Insurance

Not to beat a dead horse, but you seriously need life insurance. You need to have 10 times your income in term life insurance. That's it. That's all that really matters. I choose not to get into the argument of term v. whole life, all I care about is whether you have the proper face value.

Bonus 1) Disability Insurance

Your employer may provide this type of insurance for you, but likely it won't be enough. Think of it this way, you are more likely to be disabled before 65 than to die, so you need to protect your income. Disability insurance is all about keeping up your stream of income in the event of a temporary or long-term period of disability. You may need to investigate supplemental disability to fill in any gaps in your employer's coverage.

Bonus 2) Long-term Care Insurance

This is an insurance which is pertinent for a certain age group. If it isn't currently relevant to you, you may still want to do research on it to encourage older family members to buy it. The longer we live, the more likely we are to develop medical issues. Long-term care insurance can help ease the medical burden.

Don't feel like reading? That's cool. You can listen to the podcast version of this segment on The Pete the Planner Radio Show on WIBC below.