10 Types of Insurance
Whether it's your home, car, or personal health, there's a lot to protect in life. But finding suitable types of insurance for your needs can take time and effort, especially if you’re unsure of the kinds of policies out there. Wouldn't it be nice to have a cheat sheet for adulting? Well, your wish is our command! We're breaking down 10 types of insurance policies, from basic plans to specialty plans, and everything in between — including credit union insurance products.
And remember, you don’t have to go it alone. Credit union insurance services available through your local credit union can help members assess their needs, find insurance plans, and even score member-exclusive policy discounts on credit union insurance products.
10 Types of Insurance
There are many different types of insurance, but that doesn’t mean you need every kind of plan. Learn about these 10 popular insurance plans to consider which ones may be right for you.
1. Auto Insurance
Auto insurance is available for cars, trucks, and motorcycles and offers financial protection in the event of vehicle damage, theft, or bodily injury. Auto insurance also protects drivers against the impact of liability if they cause an accident. In most states, basic liability auto insurance is required by law. However, it is a good idea to explore policy upgrades that cover additional costs, such as hail damage, rental car reimbursement, or roadside assistance.
While auto insurance covers repairs like broken windshields and other damage, it does not cover general wear and tear. So, it’s still important to set aside funds for routine maintenance like oil changes, tune-ups, and windshield wiper replacement.
2. Home Insurance
Home insurance, also called homeowners insurance, covers damages to your property, home, and belongings stemming from events like hail, fire, or wind. It also covers the impact of liability against accidents or injuries on your property.
Unlike auto insurance, home insurance is not mandated by law. However, a mortgage provider will likely require you to have an insurance policy until your loan is paid off. Additionally, it’s a good idea to insure your home because it is most likely your biggest investment.
Keep in mind that home insurance covers a variety of damages, but it does not cover everything. For example, damage from floods, earthquakes, insects, and other forms of destruction often requires a separate policy.
3. Renters Insurance
If you don’t own a home, you can still benefit from similar coverages with a renters or tenants insurance policy. Renters insurance covers damages to your personal belongings as well as the impact of personal liability for accidents that occur in your rented space. Additionally, many renters insurance policies cover loss of use. So, if you have to vacate for repairs, you can be reimbursed for temporary housing.
While renters insurance covers your personal items, it does not cover damages to the residential structure. But don’t worry. That’s the landlord's responsibility, and they will have a separate policy. Renters insurance isn’t required by law, but many apartment complexes and landlords will require proof of insurance before you can move in.
4. Umbrella Insurance
No, umbrella insurance doesn't protect your umbrella collection. Instead, umbrella insurance is an additional liability insurance policy that protects you beyond the liability limits on other policies, like home and auto.
Depending on the specifics of the policy, umbrella insurance casts a broader net to protect you from the impact of damages like slander, accidents abroad, rental car or home accidents, and additional legal fees. Think of it as backup insurance to pick up the slack on your other policies.
5. Life Insurance
Life insurance provides a lump-sum payment to designated beneficiaries after your death. Many employers offer basic group life insurance as part of their employee benefits package. Overall, there are three main types of life insurance:
- Term life insurance lasts a set number of years, typically 10, 20, 30, or to a specified age. Your beneficiary will receive a payment if you pass away during the covered term. However, the plan is no longer valid after the term expires.
- Permanent life insurance, also called a whole life policy, pays beneficiaries when you pass away at any age.
- Final expense insurance is designed to cover a smaller, set amount of end-of-life expenses, such as funeral costs.
6. Health Insurance
Health insurance helps cover a portion of routine medical costs, injuries, and specialist visits. Health insurance premiums, copays, deductibles, and coinsurance vary depending on the type of health insurance plan you have.
In the United States, you could have private insurance, insurance through your work, or a federal insurance plan like Medicare or Medicaid. It’s important to carry health insurance to cover everything from your annual physical to accidents and the unexpected, like broken bones or illness.
7. Disability Insurance
Disability insurance provides coverage if you are injured and unable to perform your job. Like life and health insurance, employers often offer varying levels of disability insurance coverage as part of an employee benefits package, with the option to upgrade your plan. Common uses of short-term disability coverage include maternity leave or surgery recovery.
You can also apply for disability insurance through the Social Security Administration, private insurers, or even your local credit union. Disability coverage varies based on your earning potential and existing health conditions.
8. Long-Term Care Insurance
Long-term care insurance covers costs related to in-home nurses, assisted living communities, and nursing homes. These types of services typically aren’t covered by general health insurance.
The majority of people aged 65 and over will need some form of long-term care in their lifetime. Because such services can quickly eat up retirement savings, long-term care insurance is one way to look out for your future self and ensure a healthy and vibrant retirement.
9. Personal Article Insurance
Most standard homeowners and renters policies have a reimbursement cap on personal items. This means high-ticket items may not be fully covered. As a result, those greater-value belongings may need their own insurance policies.
Personal article insurance is designed for things like jewelry, fine art, musical instruments, and other collectibles. You can purchase blanket coverage for your items or insure individual items.
10. Specialty Insurance
As the name implies, specialty insurance is for unique items not typically covered under general insurance policies. For example, specialty insurance could include anything from a couple purchasing event liability insurance for their wedding to a concert pianist insuring their fingers. More common types of specialty insurance include plans for boats, RVs, and antique cars.
Credit Unions and Insurance
You probably already knew that you could turn to your local credit union for all of your banking needs, but did you know many credit unions also offer various forms of insurance? There are likely credit unions in your community with exclusive credit union member discounts on insurance products.
- Common credit union insurance products include:
- Auto & home insurance
- Life insurance
- Accidental death & dismemberment insurance
- Homeowners insurance
- And more!
Further Resources on Types of Insurance
Learn more about your insurance needs with these helpful resources.
- Calculate your coverage. The Insurance Information Institute shares factors to consider when determining how much life insurance you may need.
- Get tips to protect your home. The Consumer Reports Homeowners Insurance Buyers Guide covers what to consider when shopping for a home insurance plan.
- Know your unique property's value. Discover what your art is worth at askart.com.