What types of insurance do you really need? You might be worried about wasting your money on insurance that simply isn’t important. Or maybe you’re concerned about slipping up and not getting insurance that you really should have.

Here are the three key types of insurance you almost certainly need … plus three other types to consider.

Three Types of Insurance You Should Have

#1: Health Insurance

Health insurance is vital. Lacking insurance, or having inadequate insurance, can be financially ruinous. We all hope to stay healthy, of course, and to avoid accidents … but a crisis can come out of the blue.

As with all types of insurance, you should shop around to get the best deal on your health insurance – especially if you don’t have health insurance as a benefit through your employer. PolicyScout has lots of good health insurance options to pick from, along with other types of insurance.

#2: Car Insurance

If you have a car – and over 90% of American households do – then you need car insurance. Liability insurance is a legal requirement in almost every state, and it protects you from potentially very costly legal bills.

As a minimum, you should have liability insurance. Consider other types of insurance, too, such as collision insurance, or comprehensive insurance that covers damage to your car in the event of vandalism, theft, accidents, or other damage that doesn’t result from a collision.

#3: Homeowners Insurance or Renters Insurance

If you own your home, you should have homeowners insurance: otherwise, a fire, storm, explosion, or other disaster could leave you homeless. You can also get insurance that covers a wider range of events, like theft, earthquakes, and flooding: consider the area in which you live and the likelihood of these happening.

As a renter, you can get renters insurance. This protects your personal property. You can also get liability and medical expenses coverage, in case someone is injured while in your home. 

Three Types of Insurance You Should Consider

As well as the above types of insurance, there are three more that you will want to consider, depending on your personal circumstances.

#1: Life Insurance

Life insurance pays out if you die. It’s particularly important if you have dependents. For instance, if you’re the sole income earner in a family with 2 kids, your partner might well have huge financial difficulties if you passed away.

Keep in mind that you can also take out life insurance to benefit someone beyond your immediate family. You might choose to have life insurance so that your business partner could receive a payout if you died.

Life insurance isn’t usually necessary if you have no dependents.

#2: Disability Insurance

Most types of life insurance only pay out if you die. But another worrying possibility is becoming disabled and unable to work. This is where disability insurance comes in. It will pay out if you are no longer able to work, and you can take out plans that cover up to 10 years. 

Note that disability insurance won’t generally cover injury or illness due to drugs, alcohol, criminal acts, and any type of self-inflicted injury.

#3: Pet Insurance

If you have a pet, it’s well worth considering pet insurance. This can cover medical expenses like accidents, emergency care, and surgery. Some pet insurance plans also cover routine vet visits and pay toward medications too.

Note that most pet insurance plans only apply to cats and dogs, though some exotic pets can be covered as well.


Paying for unnecessary insurance is a waste of money. But getting the right type of insurance can give you peace of mind – and it can potentially save you from huge bills in the future.