When it comes to insurances there are many that I avoid and find to be a complete waste of money. You won’t catch me paying insurance on a cell phone or appliance, but these 5 are must haves.
- Car Insurance
It’s illegal to not have car insurance. You need to at least have liability insurance, but I’d recommend full coverage when possible. When you’re on the road you are driving a 2-ton weapon. Having full coverage insurance can protect you and help you in many circumstances. It can help you fix, or replace, your car if you get in an accident, if objects other than another vehicle harms yours (such as hail denting your car, animals damaging it, etc.), and if natural disasters such as severe flooding ruin your vehicle. It also can help with non-vehicle related costs such as medical bills when you or the person you harmed have been physically hurt in an accident, and attorney bills if you are being sued for causing an accident. Even the smaller things such as roadside assistance and towing can be beneficial.
Every state has different laws and each company offers different benefits at a range of differing prices. Check what your current insurance offers, and every 6 months shop around to see if other companies can give you a better deal.
Know what your insurance covers! When Hurricane Matthew hit, many cars were deemed a total lost due to flooding. Several people did not have flood coverage on their policy so their car insurance covered $0 of the costs associated with having to buy a new vehicle. Don’t wait until a disaster strikes to add coverage either, insurance companies will not allow changes to a coverage during a disaster.
Please do not drive a vehicle if you do not have insurance!
- Life Insurance
In our home my husband is the bread-winner. If he died unexpectedly tomorrow then I would have no way to provide for myself or my son for a few months until I can get back on my feet. That’s scary! That’s where life insurance comes in. Dave Ramsey , the financial guru, recommends having 10-12 times the amount of the breadwinner’s yearly salary in life insurance. We pay $25 a month for 500,000 for my husband. If he did die unexpectedly, then that life insurance policy would cover his funeral expenses, pay off any debt owed (we aren’t in debt, but to others that may be beneficial), pay off the mortgage early, and pay for the rest of my degree so that I can support myself and our family.
I’m currently a stay at home mom and I have a life insurance policy as well. If I die unexpectedly then my husband would have the added strain of paying for childcare, which is pretty expensive! He would have to pay for a maid, a cook, an accountant….and all of the other services that I offer for free. It’s important for even stay at home moms to have life insurance coverage so that funeral expenses will be covered and your husband can have the finances he needs to cover the loss of your services. Stay at home parents are worth a lot!
We have a $20,000 policy on our son. He doesn’t bring in any money, but if he were to die then we would need that policy to cover his funeral expenses and any therapy sessions that we would need. I don’t know about you, but I would need A LOT of therapy if I lost my child.
Once you have enough money saved up to cover any of the associated costs of a family member dying then you can cancel the policy. My policy is for 20 years. By the time that 20 years is up our kids will be grown so there will be no need to pay for daycare when I die. By then we will also have enough money of our own set aside for my funeral costs.
Life insurance is there to cover for you until you can cover for yourself.
- Renters/Homeowners Insurance
We haven’t bought a home yet, but our rental insurance helps cover the costs associated with replacing belongings in the case of a robbery or damage to our home. It also would help cover costs associated with anyone suing us for being harmed on our property and medical expenses of anyone harmed on our property. If we accidentally set off the water sprinklers in our home and damage it then the renters insurance will help cover the costs associated with repairing the home.
We bundle our insurances so our rental insurance costs us a whopping $7 a month. That’s a great price to pay for peace of mind.
You can legally own a home without having homeowner’s insurance, but can you cover the cost of a new roof if a tree falls on it? Can you cover the costs associated with replacing your stolen belongings? Can you pay out of pocket for repairs associated with heavy flooding and fire damage? Make sure to have insurance and look carefully into which companies can offer you the most for the best price.
- Health Insurance
My husband recently separated from the military and our first reality check of civilian life was the cost of health insurance. My husband’s new job offers a health insurance plan, but with it we still pay $1000 a month with a super high deductible for just my son and I. Seeing the cost hurt, it hurt a lot…but I had a good cry over it and then signed us up, because health insurance is that important.
Every job, state, and family situation can cause the prices to be different. See what your area and job has to offer and then make decisions on health care that is best for you and your family.
I know some who forgo health insurance and pay the penalty at tax time because it’s cheaper. That’s okay. To each their own, but for my family and I insurance is a need. It’s a priority. Not having health insurance is a gamble on your future. What if you forgo health insurance and then get diagnosed with cancer, or get in a car accident that requires multiple surgeries and months of physical therapy? I rather live pay-check to pay-check and pay health insurance, then forgo it to save some money each month then get sick and have hundreds of thousands of dollars in debt that I can never pay off.
We aren’t in debt. We don’t owe anyone anything, and we aren’t willing to sacrifice that freedom…so we pay for health insurance.
Checkout my finance section on my blog to get tips on how you can be debt free too.
- Dental Insurance
Dental insurance is cheap and well worth it. I like my teeth, and I like being able to chew my food. It seems pretty self-explanatory and kind of like a “duh, of course you like chewing food!” moment, but it’s usually an insurance that can be easily overlooked.
My first couple years at college I thought that as long as I brushed my teeth at least once a day then I didn’t need the dentist. Boy was I wrong!
After I got married my husband pushed me to go get a cleaning. I grudgingly went and found out that I had 10 cavities, needed a root canal, and needed 2 crowns. Ouch! My pride was hurt, and for a week I refused to eat any sugar and all sticky things went into the trash. It took time, but I learned that if I got a regular cleaning every 6 months and brushed, flossed, AND used mouthwash every day then I could eat sugar once in a while and still have good dental hygiene. That was 6 years ago and I haven’t had a cavity since.
Before we had our son my dental insurance for just me was $12 a month. 2 cleanings with x-rays can cost about $300 a year out of pocket. My insurance covered those 100% and my yearly insurance cost was $288. So, the insurance saves me $12 a year and will help cover the costs associated with filing cavities and other work that may need done.
Invest in yourself and get dental insurance, you’re worth it.