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By learning the types of insurance you can purchase, you can begin taking essential steps to protect yourself, your loved ones, and your belongings. Here is a summary of what’s available to help you protect what’s most important:
If you have replacement cost coverage, homeowners insurance will cover the amount it costs to rebuild your home, replace your personal belongings, and temporarily live somewhere else, if you’re unable to live in your home due to a fire or other insured disaster. It also includes some liability protection if someone is injured or their property is damaged while they’re on your property.
Does a standard homeowners insurance policy cover condos as well? Thanks to the shared common spaces there will be two separate policies to protect your investment. Typically the master policy is taken out by the owner of the condo structure or association, which covers the common areas you share with the others in your building like the lobby, roof, basement, elevator, and walkways for both liability and physical damage. You will also need your own insurance to protect your condo unit’s valuables and the structures of your unit that the master policy will not cover.
To adequately insure your condo, it’s important to know which structural parts of your home are covered by your association and which are not. Your condo association’s bylaws or lease should make this clear.
Renters insurance covers your personal belongings from loss caused by fire or smoke, lightning, explosion, windstorm, water damage (not including floods), and theft. Also, depending on where you live, earthquake coverage may be purchased for an additional cost. Keep in mind this covers your property (not your roommate’s), including possessions you keep in your car, garage, or storage unit.
Most states require drivers to have auto insurance. If you’re involved in an accident, certain policies will cover your medical costs, as well as the medical costs of others. Your insurance can also protect some of the property inside your car if it’s damaged or stolen, and the costs to repair your car.
Life insurance helps replace lost income for expenses such as mortgages and household bills, childcare costs and tuition, and final expenses such as funeral costs, medical bills, taxes, debts, and lawyers’ fees. Term life insurance provides the largest amount of coverage for the lowest cost and provides coverage if you pass away during the term of the policy, which typically range from one to 30 years. Whole life insurance provides coverage no matter how many years have passed since you opened the policy.
The most common types of health insurance plans are indemnity fee-for-service (FFS) plans, health maintenance organizations (HMOs), point of service (POS) plans, and preferred provider organizations (PPOs). An indemnity plan allows you to choose your own health-care providers without limitations. HMOs, POSs, and PPOs are all managed care plans in which you choose from a network of physicians that accept your health insurance.
An umbrella liability policy provides additional liability insurance, above and beyond the limits in your auto, homeowners, or renters policy. An umbrella also provides coverage on recreational vehicles. Your net worth and value of your assets help you determine how much coverage you should buy.
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Please review your insurance policies carefully as coverage and exclusions vary.