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Most Important Types of Insurance to Have

Life is unpredictable. When something like a car accident, house fire or tragedy in the family happens, insurance can make life a little easier. While insurance will not fix everything, it can go a long way toward getting you back on your feet when the unexpected happens. Some types of insurance are legally required, while others might not apply to your lifestyle or needs. Consider purchasing at least the most important types of insurance if you cannot afford all varieties.

Auto Insurance

You cannot legally register a vehicle in Arizona without showing proof of financial responsibility. This typically comes in the form of purchasing auto insurance. In Arizona, the minimum required amounts of insurance are $15,000 per person in bodily injury liability insurance, $30,000 per accident and $10,000 in property damage liability. Uninsured/underinsured motorist coverage will also automatically come with an insurance policy, but you have the option of rejecting it if you wish.

Car insurance requirements will increase to $25,000, $50,000 and $15,000 in Arizona starting July 1st, 2020, under a new bill Gov. Doug Ducey signed into law. Having car insurance shows that you have the ability to pay for a victim’s damages if you cause a collision in Arizona. Without insurance, you may end up having to pay for someone else’s losses out of pocket, on top of paying additional penalties for breaking the state’s insurance law. If you plan on registering and driving a motor vehicle in Arizona, you need auto insurance.

Health Insurance

Many people see health insurance as an optional type of coverage, but you can incur fees on your federal taxes if you go longer than two consecutive months without insurance. Going without health insurance also comes with significant financial risks in the event of an accident. Medical bills are the most common cause of bankruptcy in the U.S. Even if you are young and healthy, accidents happen. Having health insurance can prevent you from going into significant medical debt to pay for an unexpected injury or illness.

If you have an ongoing health condition, purchasing health insurance is an obvious answer to helping you afford the costs. For many people, however, the main reason to buy health insurance is protection against catastrophic injuries. Health insurance can help you front the costs of bills you did not anticipate, such as after you cause a car accident or accidentally start a kitchen fire and suffer serious burns. Having health insurance can give you peace of mind through even the most difficult times, knowing your injury or condition will not bankrupt you or your family.

Homeowners/Renters Insurance

For most people, the largest investment they will make in their lives is real estate. Buying a home can cost hundreds of thousands of dollars – money you could waste if you do not properly insure your investment. Homeowners insurance will pay for costly repairs after common types of disasters that may damage your home, such as fires, floods, bad storms or vandalism. Without it, you may have to pay for these repairs out of pocket. If your home is a total loss, you could lose thousands of dollars without homeowners insurance to reimburse you for the cost of your property. If you do not own a home, opt for renters insurance instead. Renters insurance is typically cheap and can provide payments to cover property losses that occur within a rental, such as an apartment. While renters insurance does not cover the building’s structure (it is the landlord’s responsibility to insure the building), it will pay for any of your personal items that suffer damage in a disaster or robbery. For example, renters insurance could cover the costs to replace stolen jewelry, electronics or other high-value items after a robbery. Renters insurance can be an important investment if you keep anything of value in your rented home or apartment.