From your standard policies to the types of insurance you forgot about, here's what you should know about coverage.
When most people hear the word "insurance," they first think of the standard trio of home, life and auto coverage (and for good reason — those policies are important). But many people would benefit from additional protection provided by policies they may not even know exist.
Here's a refresher on the basics as well as a few commonly overlooked policies to consider.
Homeowners insurance
It's up to you to choose the policy and limits that meet your needs, but it's generally best to insure your home for at least 100% of its estimated replacement cost — the cost of repairing or replacing your home to restore it to its original condition. Estimated replacement cost is different from market value or purchase price. If you select a homeowners policy amount lower than the estimated replacement cost, certain coverages may be unavailable to you. If you live on a farm, you can get a specialized farm and ranch insurance policy. Periodically review your policy and limits with your agent and notify your agent of any changes or additions to your home.
Flood insurance
Homeowners policies typically exclude flood coverage. Adding coverage may be worth looking into, no matter where you live. According to FloodSmart.gov, more than 20% of all flood claims happen in moderate- to low-risk areas. State Farm® agents enrolled in the federal government's NFIP Direct Program are able to write and service flood insurance policies for qualifying homes directly through that program.
Personal articles policy
While home policies typically cover many items inside the house, a personal articles policy provides even broader protection. This can include coverage for items ranging from jewelry and fine art, to cameras, musical instruments and sports equipment. In most cases, a personal articles policy has no deductible and will cover the full replacement cost of your items anywhere in the world. So if you're on vacation and someone runs over your expensive skis or snowboard with their SUV, this is the policy you need.
Renters insurance
Just because you don't own a home doesn't mean you don't have a home that needs protecting. And yet, well under half of tenants have one of these insurance policies. Renters insurance (sometimes called "apartment insurance") covers personal property such as electronics, furniture and clothing from loss due to factors such as fire, water damage, theft or vandalism. Renters insurance even covers your stuff when it's not in your apartment. If your laptop is stolen from your vehicle or your bike is stolen while you're at work, for example, these losses are likely covered.
Manufactured home insurance
Insurance for manufactured homes can help pay for covered property damage, covered claims for injury and liability claims made against you. It is important to know the differences between manufactured and modular homes. Learn more about manufactured and mobile homes, whether you own it or if you're interested in purchasing one.
RV insurance
Motorhome or travel/camping trailer insurance can merge many of the needs of both a residence and a vehicle. The type of vehicle and the driving record you have can affect your insurance. It's good to keep this in mind, along with other things to consider before buying an RV. Similar to both your home and car, you'll want to maintain your RV both before trips and at regular intervals to help maintain the value as well as to reduce accidents and inconveniences.
Car insurance
Auto insurance is required in almost every state to operate a vehicle — but the cost can vary widely. This is partially determined by your vehicle type, your age as well as your car's and the coverage level you select, but it can also be affected by other factors. People who live in densely populated areas — noted for higher occurrences of crashes and theft — will likely pay more for auto insurance than those who live in rural areas, where crashes and theft are less prevalent.
Motorcycle insurance
Motorcycle insurance can cover damage to your vehicle and injuries. The motorcycle you use can have a big effect on your insurance costs. State Farm has a tool that gives you a quick idea on how your insurance will be affected by various makes and models of motorcycles. Besides insuring your motorcycle, taking care of it and being safe can also go a long way to protecting against loss.
Off road vehicle insurance
Insuring your car is one thing. Insuring an off-road vehicle — such as a snowmobile, golf cart or ATV — is another. An off-road vehicle policy can cover you in case of bodily injury or property damage as well as damage to the vehicle itself due to accident, theft, fire, vandalism and other losses — even when in storage.
Boat insurance
Boat insurance has a variety of perils it can cover, such as sinking, fire, theft and storms, just to name a few. As with other lines of insurance, there's a lot you can do to keep you, the boat and your passengers safe.
Life insurance
Life insurance helps you and/or your loved ones protect against financial loss they could experience from the uncertain time and event of the covered person(s) death. The way life insurance works is that you buy a life insurance policy and name a beneficiary to receive the death benefit. You'll need to select whether you'd like term, whole life or universal insurance. You may want to do additional reading if you'd like a deeper dive into what term, whole life and universal insurance are. You'll also select the amount of life insurance you need. We know this is a lot to think about, so we have a life insurance calculator you can use that could help make your decision easier.
Disability insurance
Most people protect their family from the prospect of lost income in the event of their own death through a variety of life insurance. But disability is another important consideration. If you're unable to work due to sickness or injury, disability insurance can provide protection to help you pay your mortgage, rent, car loans and other regular living expenses. Short-term disability insurance provides funds to help you meet monthly obligations in the case of a temporary illness or injury, while long-term disability policies help replace lost income in case you become permanently disabled.
Health insurance
For health insurance coverage, you pay a premium in exchange for the health insurer paying for all or a portion of your health care costs. There are several different plans to choose from. The terminology used for health insurance plans can be challenging to understand, but doing some homework can help with understanding. If you want to dive deeper, there's also COBRA, Medicare, group health insurance and more. Here is more information about various health and Medicare insurance plans.
Identity theft insurance
No one plans to become an identity theft victim, and yet right around 1 in 10 Americans find themselves in exactly that position each year. Cyber Event, Identity Restoration and Fraud Loss Coverage combines Computer Attack Coverage, Cyber Extortion Coverage, Identity Restoration Coverage, Contingent Credit Monitoring, and Fraud Loss Coverage that makes the recovery process easier, faster and less expensive. The coverage also covers up to $50,000 in reimbursements for necessary and reasonable expenses incurred to restore your identity — including credit reports, notarization and attorney's fees. Cyber Attack Coverage and Cyber Extortion Coverage provide up to $15,000 in coverage and is subject to a $500 deductible.
Pet insurance
While your family may have health, dental or vision insurance, those policies don't extend to your four-legged family members. Pet insurance lessens your financial burden when it comes to medical care for your pet and often includes tests, surgeries and the treatment of breed-specific conditions. That can mean fewer tough decisions and more time spent with your furry best friend.
Liability insurance
Personal liability insurance is designed to cover an insured for acts of negligence that create a legal obligation to a third party. Typically, a liability policy covers bodily injury or property damage to a third party caused by your negligence. This coverage is often included in policies for your residence or vehicles. Sometimes liability insurance is called "umbrella insurance", though technically umbrella insurance is a particular type of liability insurance typically added onto other policies. No, it's not insurance to cover your collection of antique parasols. Rather, a personal liability umbrella policy provides protection in case you experience a major insurance claim or lawsuit. While underlying insurance policies such as home and auto do provide some protection, an umbrella policy can cover claims and judgments above the standard limits of those other policies — typically at a very reasonable price. A personal liability umbrella policy, also referred to as a PLUP, may also cover against certain claims (such as defamation of character, libel and slander) that are typically not covered by other policies. Various types of professional and business liability insurance policies are also available, including umbrella policies for a variety of businesses.
Other types of insurance
This article scratches the surface on popular types of insurance. There are other types, such as worker's compensation, which nearly every state requires businesses to carry. With worker's compensation, employers purchase policies to benefit their employees by covering work-related injuries and illnesses and they may also pay for other coverages. There's also travel insurance and rental car insurance that you can get for when you travel. Really you can theoretically insure almost whatever has financial value that you want to protect from loss as long as it's legal, not against the public interest and you can find someone willing to insure it. For instance, some of the stranger policies taken out by individuals include a policy to cover their nose, a policy to protect their legs, insuring their tongue, there was even one for insuring a mustache and one covering an individual's hair. Although the rarer types of insurance may be a challenge to find, you can explore the more popular types of insurance at https://www.statefarm.com/insurance.
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