Insurance You Need…And Don’t!

April 17, 2018

Insurance is one of those essential life decisions we don’t like to make  but need to as we plan for the future. And while some insurance policies are crucial to secure your family’s future well-being and your present peace of mind – others are unnecessary and might be an outright scam!

Insurance exists because we can’t predict circumstances that might affect our finances in 2020 or beyond. So we surveyed experts at Parents Magazine, AllState, The Balance, Investopedia and Motley Fool to find out about the kinds of insurance you truly need.

What’s Most Essential?

Most experts agree that the crucial policies are health, homeowners or renters, auto and life insurance. And as Allstate Insurance agent Danielle Shannon in Aurora will tell you, there are plenty of options across the affordability scale. 

“My philosophy with life insurance is: something is better than nothing,” she says. “It’s more affordable than people think and it can really mean the difference between survivors staying in their home or having to sell it.”

Protecting Your Assets

Another policy Danielle advocates is a personal umbrella policy to protect a homeowner’s income and assets. Homeowners insurance policies usually include a personal liability piece, but if your assets exceed $300,000 it might not be enough.

If a family gets sued, Danielle says — let’s say because the family dog bites a neighbor – “if the plaintiff wins the lawsuit, they can go after your home equity, 25 percent of your after-tax income and even retirement accounts.”

Danielle knows of seven cases where open losses were paid out for liability claims last year. “People are more sue-happy these days and just about everything of value can be up for grabs.”

Nerd Wallet has great advice about the essential insurance you need plus income replacement calculators so you can determine the coverage you need to protect your family’s future. It will take you all of 30 minutes to figure out.

Insurance You Probably Don’t Need

Investopedia lists 15 different types of insurance you probably don’t need. These include travel or flight insurance, flood insurance, and disease insurance – all designed as safeguards against the unpredictability of the future. 

Here’s a closer look at two other insurance policies that are considered unnecessary.

Credit-Card Theft Insurance

Also called credit-card loss protection, this insurance can cost a minimal $100 a year, but it is $100 you don’t need to spend. The Federal Trade Commission calls this type of insurance a scam because federal law already limits consumer credit-card liability for unauthorized charges to $50.

Identity-Theft Insurance

At least 15 million Americans had their identity stolen in 2016 (up two million from 2015) but most policies don’t pay back the money a thief takes, only what it costs you to get your identity back! Many policies also exclude lawyer fees, which you may have to shell out to restore your identity.

As Danelle at Allstate says, everyone has to decide which policies and levels of coverage makes sense for them. Opting in or out of the non-essential policies is also about your level of comfort and threshold of tolerance for risk. Planning for the future takes everything into consideration!   

Future Planning in Southshore 

We plan ahead, too, at the master-planned community of Southshore — designed with longevity in mind. The spectacular new homes featuring  lakeside living are built by three of the region’s leading builders Toll Brothers, Century Communities and Richmond American Homes. Drop by and tour the beautiful models in ranch and two-story designs, priced from the upper $300s to the $700s.