How much insurance protection do you really need?


It was recently revealed that American stalwart, Starbucks, pays out more in employee health insurance protection than it does on its coffee.  Although health insurance is an essential part of life, we now live in a world where pretty much anything and anyone can be insured – from treasured possessions to body parts.  With the baffling array of insurance options available, it’s easy to get confused about which ones – and how much – you need as a regular citizen.  To help untangle the web of insurance options, we’ve put together our guide to the essentials.

Homeowners insurance

When you buy a home, you are required – by law – to take out homeowners insurance.  This essential cover protects you and your property against devastating events such as fire, flood and more.  Not only does homeowners insurance cover the cost of the repairs after such events, it also insures against your liability for them.  Homeowners insurance should be taken out before a property purchase is complete and should be reviewed every few years to make sure that you’re getting the best deal.

Life insurance

Another essential form of cover, life insurance protects your children, spouse and other loved ones in the event of your death.  Most of us hope to live long lives during which we will be able to successfully provide for our loved ones but, unfortunately, that’s not always the case.  Life insurance ensures that the people that you provide for are taken care of in the event that you are no longer there to do so.  All adults should make sure that they have a good life insurance policy in place, particularly parents, and should review it regularly to make sure that it is still competitive.

Auto insurance

It is illegal to drive a car or other vehicle without the appropriate insurance.  There is a vast range of auto insurance out there so it’s a good idea to set aside the time to shop around and make sure that you get the right deal.  Auto insurance protects against a number of things including damage to your vehicle or damage caused by your vehicle to another and, personal injury to, or caused by, you.  You must be insured for every vehicle that you drive, whether it belongs to you or not.  Driving without insurance carries penalties including fines, driving bans and, occasionally, a prison term.  Auto insurance is usually reviewed annually, giving you a chance to regularly check that you’re getting the best policy.

Property insurance

Property insurance, or contents insurance, covers your personal possessions and the contents of your home.  Although many policies will cover a set amount for the entire contents of a property, if you own valuable items such as jewellery, equipment or expensive items such as a piano, it’s a good idea to gain separate, specialist insurance for these items.

Travel insurance

Most frequent travellers will tell you that embarking on a journey, however short, without travel insurance is foolhardy – and can be extremely expensive.  Travel insurance helps you to recoup costs in the event that a flight or train journey is delayed and also covers you if your luggage is lost.  When travelling abroad, in particular, travel insurance is absolutely vital as it covers the cost of medical expenses in the unfortunate event that you are injured or taken ill.  Travel insurance is available in a range of options, including single trip or annual policies and is relatively inexpensive – so, there’s no excuse to skimp on this important form of insurance.  Travel insurance, does, however, become more expensive if you have a pre-existing medical condition and, prices will rise when you become 70 years of age.

Pet insurance

Anyone who owns a pet will tell you that they’re an expensive hobby.  Apart from food and grooming, many pets need regular visits to the vets – which can run to thousands of dollars for the pet owner.  Pet insurance covers the cost of vet’s bills for your pet in exchange for a monthly or annual payment.  It’s always best to check carefully to make sure that your policy covers everything that you need and that you won’t be stuck with over-priced excess payments.  Pet insurance can be quite costly – and will increase with age (for example, policy payments for dogs increase at the age of 10).

Critical illness insurance

Not to be confused with health insurance, critical illness insurance will pay you a one-off, tax free, amount of cash in the event that you are diagnosed with a serious illness.  This kind of insurance can be invaluable in helping to pay bills if you are unable to work because of illness.

Business insurance

If you own a business, you are responsible for making sure that a number of different insurance policies are in place and, you can find out more about business insurance in our blog HERE.

……and the ones you probably don’t need

Body parts

Folklore has it that singer and actress, Jennifer Lopez, has a $27 million insurance policy on her famous bottom.  Although we may be able to twerk with the best of them, most ordinary folk don’t need to insure individual body parts.

Insurance – the final frontier

Beloved actress, Shirley MacLaine has, apparently, an insurance policy in place which will pay out $25,000 for any losses incurred by the veteran star in the event that she is abducted by aliens.  Bizarre as it may seem, Lloyds of London say that they have written over 20,000 similar policies.  Aside from wondering just where the payment would be sent to, we’re pretty sure that you’ll get away with skipping this one.

Nobody enjoys paying insurance premiums but, one thing’s for sure, at least once during your lifetime, you’ll be glad that you did!

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