Five Insurance Policies Worth Having

Here's a list from Smart Money of five insurance policies worth having:

• Health Insurance
• Disability Insurance
• Auto Insurance
• Homeowner's or Renter's Insurance
• Life Insurance

We have all of these. In addition, we also have umbrella insurance. After all, commandment #7 in the 10 commandments of personal finance is "Thou Shalt Protect Thyself Against Risk." ;-)

Here are a few details on our specific situation:

• Health insurance -- My company has a health savings account which is funded by the company. In addition, we put in a monthly amount up to the point where the maximum annual amount is contributed. I haven't yet started using my HSA as a super savings account, but it's on my list.

• Disability insurance -- I have my own disability insurance policy (not with my company, they don't offer it.) It's expensive, but well worth the cost. Here's why.

• Auto insurance -- Of course we have it. We keep the deductible high and only will use it in case of a major accident. And we shop around for car insurance every year or so to save a bundle of money.

• Homeowner's insurance -- Same as auto insurance.

• Life insurance -- A boatload on me and a good amount on my wife. Becoming less and less needed as our net worth grows and our kids get older.

Comments

[Bill]

I have an uncle in the insurance business who always told me...."you only insure what you cannot afford to replace".

You even alluded to this in your line about your life insurance. So the question becomes "did you insure yourself against stock market losses this year?" Many people lost far more than they will ever lose in car accidents, house damage, or disability. Risk is not just chance it the risk and the size of the loss. That's why airplane insurance has a low premium with a high payout (low chance big cost). This is why we don't insure plastic forks (high risk of breakage, very low cost)...we just get a new one.

[Mr. ToughMoneyLove]

Add long term care insurance to that list. A surprising number of claims are made by those under 65.

[Dennis Dobecki]

You are smart to have a high deductible for your car insurance. With your health savings account, you now have a high deductible health plan. Studies show 8 of 10 hospital bills contain errors.