Auto and home coverage are common types of personal property protection. A number of specialty coverages are also gaining popularity, mainly because those assets cost so much to replace.
The products covered in this section fall into three categories: must have, foolish not to have, and specialty.
Among the must-haves is automobile insurance. All but three jurisdictions in the United States require drivers/auto owners to buy at least minimum amounts. For most people, owning much more than the minimum makes sense, given that value of today's vehicles and the kinds of damage and injuries that accidents can cause.
Homeowners is also a must-have if your mortgage lender requires it, but it's also a common-sense buy even if you own your home outright. For auto and homeowners, the decision really isn't whether to buy coverage, but how much to buy. Raising deductibles—the amount of a loss you pay out-of-pocket before the insurance kicks in—can lower the premium and still keep you covered against major losses.
Insuring credit accounts, personal property within a rental unit, travel, or your wedding are specialty coverages. These risks don't typically lead to catastrophic losses, although the liablilities can be open-ended. Compared with auto and homeowners, however, these kinds of insurance may have more to do with your appetite for risk than with real needs.
Reverse mortgages turn the equity in your home into cash and can also play a role in your financial planning.