3 Insurances You Must Have

Auto Insurance
Auto insurance protects you from paying the full cost for vehicle repairs and medical expenses due to a collision. A number of things affect the premiums you pay for this protection, including your:

Gender
Age
Marital status
Credit history
Car’s make and model
City and neighborhood
Types of Auto Insurance
Every state requires drivers to have auto insurance coverage, or the equivalent in financial responsibility waivers. These requirements ensure that you can pay for property damages or medical expenses. There are several components that can make up your insurance policy:

Liability coverage protects you if you are at fault for a collision. It pays for medical expenses and vehicle damage for the other driver and passengers.

Uninsured motorist coverage pays for damages to your car and medical expenses if an uninsured driver hits your car.

Collision coverage pays to repair your vehicle, if you were at fault for the damage.

Underinsured motorist coverage pays damages for your car if someone hits it, but doesn’t have enough insurance to cover your medical expenses and car damages.

Comprehensive coverage pays for damage to your car due to theft, fire, or falling objects.

Auto insurance requirements vary from state to state, but liability coverage is mandatory in most states. You may choose to opt out of certain types of coverage, depending on your budget and car’s age. Check with your state insurance regulator to learn more about its requirements and to research potential insurers.

Be sure to read the declarations page of your auto insurance policy. This page is a summary of your policy: the length of coverage, annual premium, the maximum amount your insurance company will pay out for each type of claim, and how your premium payment is split between each part of your coverage.

Homeowners and Renters Insurance
Homeowners and renters insurance protect your home and personal property against damage or loss, and insures you in case someone gets hurt while on your property. You may already have insurance on your home if you have a mortgage on the property because most lenders make insurance a condition of the loan.

Renters insurance, or tenant insurance, offers renters coverage similar to homeowners insurance. If you are a renter, do not assume your landlord carries insurance on your personal belongings; you may wish to purchase a separate policy.

What Can Homeowners or Renters Insurance Cover?
Homeowners or renters insurance may pay claims for:

Damage to your home, garage, and other outbuildings
Loss of furniture and other personal property due to damage or theft, both at home and away
Additional living expenses if you rent temporary quarters while your house is being repaired
Homeowners or renters insurance may also:

Include liability for bodily injury and property damage that you cause to others through negligence as well as for accidents happening in and around your home, and for when you are away from home, for which you are still responsible.  It also pays for injuries occurring in and around your home to anyone other than you or your family.
Provide limited coverage for money, gold, jewelry, and stamp and coin collections
Cover personal property in storage
In addition to general shopping for insurance tips, keep these points in mind when shopping for homeowners insurance:

Insure your house, not the land under it. If you don’t subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
Purchase enough coverage to replace what is insured. “Replacement Cost Coverage” gives you the money to rebuild your home and replace its contents. An “Actual Cash Value” policy is cheaper but pays the difference between your property’s worth at the time of loss minus the depreciation for age and wear.
Ask about special coverage you might need. You may have to pay extra for computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
Flood and earthquake damage are not covered by a standard homeowners policy. The cost of a separate earthquake policy will depend on the likelihood of earthquakes in your area. Homeowners who live in areas prone to flooding should take advantage of the National Flood Insurance Program (NFIP).
If you are a renter, do not assume your landlord carries insurance on your personal belongings. Purchase a separate policy for renters.
For help in deciding how much insurance coverage to buy, contact your state insurance regulator.

Flood Insurance
Homeowners and renters insurance do not typically cover flood damage. The National Flood Insurance Program (NFIP) helps reduce the impact of flooding for renters, property owners, and businesses. Even if you live in an area that is not at high risk of flooding, you may still be required to have flood insurance.

How to Apply for Flood Insurance
Find out if your community participates in the program. You can only purchase a flood insurance policy if you’re a renter, homeowner, or business owner, and your property is located in an NFIP participating community.
Contact an insurance agent in your area. You can only buy flood insurance through an insurance agent; you cannot buy it directly from the federal government. If your local insurance agent is unfamiliar with the NFIP, you can find an agent serving your area by calling the NFIP Help Center at 1-888-379-9531

What Flood Insurance Covers and Other Things You Should Know
There are two types of flood insurance coverage: building property and personal property (contents). Flood insurance only covers physical damage to your building or personal property directly caused by a flood. The NFIP advises that you buy both types of coverage.
Rates are set nationally and do not differ from company to company or agent to agent. These rates depend on many factors, such as the date and type of construction of your home and your building’s level of risk.
Typically, there’s a 30-day waiting period from the date of purchase before your policy goes into effect.
All National Flood Insurance policies include a congressionally-mandated surcharge. If your community participates in the Community Rating System, you may qualify for an insurance premium discount.
Contact your flood insurance agent to make changes to, pay for, or renew your policy. If your mortgage lender requires you to have flood insurance, ask them questions about renewing or changing your policy.
Learn how to prepare for and recover from disasters and emergencies.

File a Complaint
If you have a problem with an insurance company or agent regarding flood insurance, contact the company first. If you cannot find a solution, contact your state insurance regulator.