Having home and auto insurance is a good idea to protect your belongings from unexpected damage. Auto insurance is actually required by law in the U.S. Only two states, Virginia and New Hampshire, do not require a motorist to carry commercial auto insurance. Renter’s and homeowner insurance may be required, but not by your state.
Homeowner Insurance
With homeowner insurance, it is wise to read the fine print and know exactly what is covered under your policy. Depending on where you live, floods and earthquakes may not be covered, because the area may be known for those catastrophes. The insurance company feels you are knowingly taking a risk living in an area with known natural disasters, and might not offer coverage for it.
While homeowner insurance is not required by state law, if you have a mortgage the bank will want to protect its investment. The mortgage may state that the homeowner is required to keep an insurance policy that will cover any damage to the house.
Auto Insurance
Car insurance rates vary in price due to a number of factors. For example, those with speeding tickets or driving between the ages of 16 to 25 have higher rates. Safe driving combined with being older results in lower rates.
Comprehensive auto insurance covers damage to your vehicle other than just a collision, such as flooding, fire, theft, or vandalism. The cost is more for this type of insurance, but may save you trouble down the line if you run into a problem.
Renter’s Insurance
Renter’s insurance is not a state requirement like auto insurance. But a landlord can require proof of it before you are allowed to move into an apartment. The purpose is not only for the protection of your personal belongings, but also liability to protect against damage. Because it is not a requirement, one survey in 2014 by the Insurance Information Institute found that only 37%% of renters purchased renter’s insurance, as compared to 95% homeowners with homeowner insurance.
Insurance is meant to protect the policy holder from damage to their property. It is an example of something you hope you’ll never need, but will be very grateful to have if you do.
