How Much Insurance Coverage Do You Need? Experts Weigh In
Insurance can be a tricky subject to navigate. With so many different types of insurance and coverage options available, it’s easy to get overwhelmed and wonder if you have enough coverage. We asked a group of insurance experts to weigh in on how much coverage you really need, and here’s what they had to say:
If you own a car, auto insurance is a necessity. Not only is it required by law, but it can also protect you financially in case of an accident. According to Adam Johnson, an insurance agent with State Farm, “The minimum amount of auto insurance required by your state may not be enough to cover the cost of damages or medical expenses in the event of an accident. For this reason, it’s best to have more than the minimum coverage.”
Experts recommend carrying liability coverage of at least $100,000 per person and $300,000 per accident, as well as comprehensive and collision coverage to protect your own vehicle. And if you have a high net worth, consider increasing your liability coverage to protect your assets in case of a lawsuit.
Owning a home is a big investment, and homeowners insurance can protect that investment in case of damage or loss. “Your coverage should be based on the cost to rebuild your home, not its market value,” says Kerry Weems, a homeowners insurance expert with Allstate. “It’s also important to make sure you have enough coverage to replace all of your belongings in case of a total loss.”
Experts recommend carrying enough coverage to rebuild your home and replace all of your belongings, as well as liability coverage of at least $300,000. And if you own a swimming pool, trampoline, or other high-risk features, consider adding an umbrella liability policy for additional protection.
Life insurance is often overlooked, but it can be extremely important for those who have dependents. “The amount of life insurance you need depends on your individual circumstances,” says Steve Davis, a life insurance expert with Northwestern Mutual. “You should consider the number of dependents you have, your income, and your debt when deciding how much coverage to carry.”
Experts recommend carrying enough life insurance to cover 10-12 times your annual income, plus additional coverage to pay off any debts and provide for your children’s education. And if you are the sole breadwinner in your family, consider carrying even more coverage to provide for your family’s long-term financial security.
Health insurance is essential for protecting yourself and your family from the high cost of medical care. “You should always carry enough health insurance to cover any medical expenses you may incur,” says Nancy Johnson, a health insurance expert with Blue Cross Blue Shield. “This includes things like doctor visits, prescription medications, and hospitalization.”
Experts recommend carrying a health insurance policy with a low deductible and low out-of-pocket maximum, as well as additional coverage for vision and dental care if it’s not included in your policy.
Insurance coverage is essential for protecting yourself, your family, and your assets. By carrying the right amount of coverage for your individual circumstances, you can rest easy knowing that you’re financially protected in case of an accident or disaster. Remember to consult with an insurance expert to make sure you have the right coverage for your specific needs.