Insurance can be something that’s put at the bottom of your to-do list. When you first think about getting insurance, you may be thinking about loads of paperwork and high payments. With these common misconceptions, it’s no surprise that 9.6% of Americans are uninsured.
But, insurance is essential so you’re covered when you get into an accident or have an emergency. Without insurance, you’ll end up paying more out of pocket and creating a bigger negative impact on your budget.
There are quite a few different places in your life where you should consider getting insurance, including auto, personal property, and even for your life. In this blog, we’ll cover all the different avenues of why insurance is important and the best ways to decide which plans are for you.
At Diamond, we work with Liberty Mutual and TruStage Home, Auto & Life Insurance. As a Diamond member, enjoy discounted rates and top-quality protection.
#1. Auto Insurance
If you’ve ever been in an accident, in any capacity, you know that unexpected costs come up. In fact, with no injuries, the average car accident costs $6,700. The biggest benefit of auto insurance is that you won’t be paying for the repairs out of pocket.
What’s Covered in Auto Insurance?
At the very least, Pennsylvania requires you to get Liability and Personal Injury insurance. This insurance covers bodily injuries and property damages when you cause an auto accident. Aside from that, there are quite a few extra coverage options that you can carry for various accidents and auto scenarios.
- Comprehensive Coverage – There are times when your car is damaged even without a collision. If a tree falls on your parked car, comprehensive coverage would cover the costs.
- Collision Coverage – Liability coverage helps with costs when you collide with another car, but collision coverage helps when you collide with a guard rail, a tree, or something other than a vehicle.
- Better Car Replacement – If your car is totaled, Liberty Mutual will help you fund a new one year newer than your current model.
- Uninsured/Underinsured Motorist Protection – If you’re in an accident with someone who isn’t insured or who has worse insurance than yours, this coverage can help with the additional costs that the other driver can’t afford.
Your monthly auto insurance payments will depend on the type of coverage you choose, as well as the car you drive, your age, where you live, and your credit history. There are also quite a few ways to decrease your monthly payments. We recommend practicing safe driving, improving your credit score, and looking into demographic-specific discounts.
How Much Auto Insurance Do I Need?
We always recommend considering getting more coverage than your state’s minimum. Ultimately, if you are at fault in an accident, you’ll be responsible for paying for repair costs. If your insurance doesn’t cover it all, you’ll need to pay for it out of pocket.
For additional collision or comprehensive coverage, the older your car is and the more its value decreases, the less you may need to carry these options.
#2. Life Insurance
Thinking about life insurance isn’t the most pleasant thing to consider. However, it’s important to provide your family with the loss of your income. Life insurance is meant to cover funeral expenses, day-to-day costs, and lasting debt.
Pennsylvania has one of the highest average funeral costs, ranging from $7,000 to $8,000. The loss of a loved one is going to be a difficult time, and thinking about paying for a funeral can cause additional burdens on your family.
How Much Life Insurance Do I Need?
It can be daunting to make a policy that covers your family for when you’re gone. There are quite a few characteristics to consider as you think about what life insurance policy to choose.
- Funeral Costs – As we said, the average funeral is quite a chunk of money, so make sure your policy provides enough to cover these costs.
- Loss of Income – A general rule of thumb is to cover ten times your annual gross salary. If you’re a stay-at-home parent, have your policy cover the costs of the jobs you do around your home.
- Large Debts – Mortgage, car payments, and credit card debt are all examples of payments that can be paid through your life insurance.
- Costs for Children’s Education – To stay on track with your child’s college savings, your life insurance can be used to cover future education costs for children. The average cost of a Pennsylvania state school is $24,162, and your life insurance can help alleviate these costs.
#3. Renters, Home & Personal Property Insurance
After you purchase your first home, renters or homeowners insurance should be the next step you take. In fact, it’s likely a requirement when you buy a home to show proof of homeowners insurance.
In some cases, you will be required to get enough homeowners insurance to cover your home loans. So, if you purchase a $300,000 home and pay $20,000 as a down payment, they will require you to get $280,000 in coverage.
This insurance covers more than you think. If items are stolen from your home or a detached structure, if a tree falls and breaks through a window, or if you need to rebuild your home after a major accident.
Types of Homeowners Insurance
Similar to auto insurance, there are different policies that you can get for your home. Homeowner insurance can be broken into different categories, insurance for your belongings, damages, and rising costs.
- Insurance for your belongings – If items are stolen or lost you can carry personal property insurance. This type will cover the cash value of the items. For extra protection, add replacement costs insurance to your plan, and Liberty Mutual will cover the cost in today’s market.
- Insurance for damages to your home – If there are damages to your home, or someone is injured due to these damages, personal liability and medical payment to others insurance will cover these costs.
Dwelling insurance policies cover your home and any other structures on your property from damages. This policy is beneficial for properties that have detached garages or sheds that you’d like to insure.
Severe weather conditions like wind, hail, or even hurricanes, can cause physical damage to your home. Homeowners’ insurance can cover your property when these unpredictable storms pass through your community.
- Insurance for expenses – Unexpected costs will inevitably occur while you’re living in your home. Inflation protection and additional living costs policies help cushion you when these extra costs become a reality.
As a credit union member, you have the opportunity to participate in a specialized insurance program to provide valuable protection for you and your family.
