This article covers a different side of finance that impacts everyone.

Insurance is often considered by many as the poor person’s way of protecting their wealth and health. My hope is that after digesting the information provided, you will think about your personal insurance needs. Then, hopefully, it will motivate you to re-evaluate to make sure your decisions meet your needs.

As it is with financial planning, a person’s insurance needs change with time and the growth of assets. Using just personal knowledge or casual conversation with others are not the best ways to decide how to protect things of value.

First, let’s take a quick look at life insurance. Life insurance should be a part of contingency planning should something happen to you unexpectedly. Being in debt just a little can become a problem for your survivor(s).

When selecting life insurance, you can choose to pay a smaller premium just for a death benefit. A higher premium includes additional coverage in the form of a payout at retirement. Those who work for companies may also have an optional life insurance coverage plan as part of their contingency plan. This is normally a low-cost premium paid mostly by the employer.

The downside of this is that as soon as you leave a company, coverage premiums sky rocket.  As a result, most do not elect to continue that coverage and get a new policy, typically with a new employer.

Remember, life insurance should be a big part of your financial plan. Unfortunately, many choose to not have life insurance and gamble that nothing will happen to them.

We use auto insurance for many reasons. We protect ourselves financially in case of a wreck if we don’t have health insurance. Additionally we protect ourselves from others who accidentally hit our vehicle and don’t have any means of paying for our loss caused by them. 

If we cause an accident, our insurance will pay the person we hit for the loss of their vehicle and compensation for their losses up to the limit of the policy. Auto insurance is mandated by state laws to force those with insurance to protect others in case they cause loss to others.

We also use auto insurance to pay for the loss of property damaged by our vehicle. A lamp post or guard rail is an example of this type of loss as well as another vehicle.

Health Insurance is carried by the vast majority of Americans. This health coverage is typically carried in a group policy with an employer.

Much of the way health insurance is available is in turmoil with the new laws, including the mandating of coverage for everyone.The U.S. Supreme Court will ultimately determine the viability of these new laws.

One thing we know is that the cost for those who pay for health insurance will surely continue to be significantly higher every year in the near future.

Homeowners insurance is normally purchased by anyone who owns or is buying a home. This insurance also includes coverage for contents (personal belongings), which is typically 50 percent of the cost of the policy on a house or townhouse. 

Those who rent a home should insure their contents with renters insurance. The real homeowner (the landlord) typically pays a higher premium for the home insurance on the rental property even though they are not insuring contents.

Those who live in condominiums share the cost with their condo association for the insurance covering the condo unit. All condo owners need to make sure they know their share of coverage is adequate and discuss that coverage with their agent.

Any upgrades from original construction unless specified in the policy are not covered. An example of this is if a prior owner of the condo upgraded the windows to hurricane proof at extensive expense, the window coverage by the condo association replaces only the cost for original windows. You must have insurance for upgrades.

In Florida and other states homeowners have hurricane risk stand-alone policies. These policies are also available combined with the homeowner policy. Lenders require hurricane coverage. If you own your home, all insurance is optional but surely a responsible way to protect one of your major assets.

If you have a loss due to flood, only flood insurance coverage will cover the loss. The maximum dwelling coverage is $250,000 and $100,000 for contents. Additional coverage requires excess flood coverage. Floods can happen anywhere and even affect you in a higher story than a first floor. Flood can cause an entire building to be condemned, and without flood insurance you would have a total loss if the loss was caused by a flood.