renters insurance

5 Kinds of Insurance Every Retiree Should Consider

Dan Rafter — Thu, 01 Mar 2018 09:30:09 +0000

Your insurance needs don't remain constant throughout your life. You need different insurance coverage when you're single and in your 20s than you do when you're raising a family in your 40s. When you retire, your insurance needs will evolve once again.

There are certain types of insurance protections you'll no longer need after leaving the workforce, and other types that you'll want to add. Here is a primer on the kinds of insurance that every retiree should consider.

1. Health insurance

You'll absolutely need health insurance after you've retired. Health care costs are only rising, and seniors tend to spend a large percentage of their income on medical care each year.

A study released by Fidelity Benefits Consulting said that the average 65-year-old couple retiring in 2017 would need $275,000 to cover their medical expenses throughout retirement. That number isn't falling, either. Fidelity reported that the 2017 figure is up from the $260,000 that the average 65-year-old couple needed in 2016.

Most seniors will qualify for Medicare, the federal health care insurance program, when they turn 65. Medicare isn't free, but it does cost far less than what you'd pay for private insurance. Medicare covers a lot, but it doesn't cover every medical service you might need.

Do you need to purchase supplemental health insurance to boost the coverage you're already getting with Medicare? That's not an easy question to answer. It all depends on your health and how often you plan on visiting a doctor after you retire. For many retirees, Medicare may be adequate. (See also: 5 Common Medicare Myths, Debunked)

2. Homeowners or renters insurance

Will you still own a home after you retire? If so, you still need your homeowners insurance policy. This policy will pay out to help you rebuild if your home is damaged by a fire or other natural disaster. It will also help you pay for any items inside your home — such as electronics, clothing, furniture, and jewelry — that get stolen or damaged in a disaster.

Renters insurance works the same way, but it protects people who are renting an apartment. If you plan on ditching your home and renting after you retire, make sure to invest in a renters insurance policy. Think about how much money you'd need to replace your valuables if they were stolen or destroyed. (See also: 5 Reasons You Definitely Need Renters Insurance)

3. Auto insurance

If you plan to keep driving after retirement, you'll need to pay for auto insurance. It's illegal in most U.S. states to drive without car insurance.

Maybe you're planning to sell your car and move into an urban neighborhood after you retire. Instead of doing your own driving, you plan to walk, take public transportation, or Uber to grocery stores, movie theaters, and restaurants. In this case, getting rid of your car insurance might make sense. But even if you're hanging onto your car only for emergencies or long trips, you'll need to keep your auto insurance policy.

4. Life insurance

Life insurance is usually one type of policy you can drop after retirement. After all, life insurance is a way to protect your loved ones who are dependent on your income. Once you get to retirement age, these dependents — usually your children — should be self-sufficient. They won't need a payout after you die to pay their bills.

But what if your spouse or children still aren't financially self-sufficient by the time you retire? If that's the case, you should hang onto your life insurance policy. Maybe you have a child with special needs. That child might still rely on financial assistance from you. What if you were gone and you didn't have a life insurance policy? Would that child still get the financial assistance necessary?

In most cases, retirees no longer need life insurance policies. But for special cases, keeping the policy is the smart move. (See also: When Dropping Your Life Insurance Is the Right Decision)

5. Umbrella insurance

What if someone was visiting your home and seriously injured themselves? Would your homeowners insurance policy provide enough protection? Maybe. But umbrella insurance can provide retirees with the peace of mind that they'll be protected even if their homeowners insurance doesn't offer enough coverage.

Umbrella insurance provides extra liability coverage above the limits of your homeowners and auto insurance policies. Basically, it pays out in cases where your homeowners and auto policies don't pay enough to cover all of the damages for which you are responsible.

Say you get into an auto accident that ends up with a liability claim of $1 million. If your auto insurance only covers a maximum of $500,000 for liability, your umbrella policy would cover the remaining $500,000. (See also: Beware: Your Insurance May Not Cover These 8 Losses)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Surprising Insurance Policies You Might Need

Dr Penny Pincher — Tue, 31 Oct 2017 08:30:09 +0000

Most people are familiar with the most common kinds of insurance — home, auto, life, and health insurance. But there are many additional insurance policies available for things that are probably not covered by your everyday basic policies. Depending on your risk exposure, additional insurance coverage could be worth the cost. (See also: 10 Weird Types of Insurance You Didn't Even Know About)

Here are some less well known kinds of insurance you might want to consider.

1. Pet insurance

This is basically health insurance for pets. A pet insurance policy can limit your expenses if your pet gets injured or sick and requires a costly medical procedure. If you would spend almost anything to save your fur baby, this can be worth getting so you don't have to worry about devastating veterinary bills. The cost of pet insurance ranges from about $10 to $70 per month, depending on the type of pet and the level of coverage. (See also: 7 Things You Need to Know About Pet Insurance)

2. Earthquake insurance

Even though there is not much risk of a big quake here in Iowa, I once added earthquake coverage to my homeowners policy. At the time I lived in an old, two-story farmhouse that I thought would be susceptible to an earthquake, and the cost of coverage was only a few dollars per year. It was well worth it for the peace of mind.

3. Flood insurance

Damage to your home by flooding is not typically covered by standard homeowners insurance policies. If there has been a history of flooding on your property or nearby homes, you will want to take a look at getting flood insurance. The average cost of flood insurance is around $700 per year, but it can depend on the location and risk of flooding. (See also: Everything You Need to Know About Flood Insurance)

4. Disability insurance

Disability insurance protects your paycheck in case you become incapacitated or disabled and are unable to work. Short-term disability insurance typically replaces about 80 percent of your income for two to six months. Long-term disability coverage may last for years or even your entire life, and typically covers up to 60 percent of your income. Disability insurance is especially important if you have a single earner in your household, or if one earner makes most of the income. (See also: 4 Things You Need to Know About Disability Insurance)

5. Long-term care insurance

If you become unable to take care of yourself later in life, you may need assisted living services or to move into a nursing home; both of which can be astronomically expensive. Long-term care insurance helps cover these expenses and is offered as a traditional insurance policy or as a hybrid policy that combines life insurance and long-term care insurance. Note that these policies can be expensive, costing up to $2,000 per year — sometimes more. (See also: Is Long Term Care Insurance Worth It?)

6. Supplemental health insurance

In case of illness or injury, supplemental health insurance may cover deductibles and co-payments that are not covered by other forms of insurance. It may even provide a cash payment to cover expenses such as utility bills, housing payments, and groceries while you are not working. Plans typically cost up to $30 per month.

7. Identity theft insurance

If you are a victim of identity theft, this insurance policy will cover the expenses of restoring your identity, including application fees, postage, notary fees, and attorney fees. Some policies also provide fraud loss coverage in case funds are stolen from your account. Coverage costs between $25 and $50 per year.

8. Student loan insurance

Unlike most other types of debt, student loans cannot be discharged through bankruptcy if you become disabled and are unable to make the payments. Some disability insurance providers offer student loan protection that can be added onto a disability policy that will make your student loan payments. This type of coverage is especially popular for medical school graduates and others with large student loans.

9. Wedding insurance

A lot of the expensive things that can go wrong with a wedding are covered by wedding insurance. The wedding may need to be postponed due to illness or injury. The wedding dress, rings, and even the cake can be lost or damaged. Depending on coverage, wedding insurance typically costs a few hundred dollars and may be worth considering if you are planning an elaborate event for the big day. You can also get liability coverage to protect you in case an accident happens at the wedding.

10. Travel insurance

Travel insurance comes in two main varieties: trip cancellation insurance and medical travel insurance. Trip cancellation insurance typically runs about 5 to 7 percent of the trip cost and protects you from losses in case your trip is canceled due to sudden illness or natural disaster. Some credit cards offer travel protection, so check with your card provider before taking out a separate policy. Medical travel insurance covers medical expenses if you are sick or injured in a foreign country, where your standard health insurance policy may not help you. (See also: Everything You Need to Know About Buying Travel Insurance)

11. Dorm insurance

Dorm insurance covers expensive items that you might take with you to college, such as a computer. It typically has a very low deductible (around $25), which makes it easier to get a payout if you suffer a loss. A $5,000 policy may have a premium of around $140 a year, according to Consumer Reports. But your homeowners insurance policy may already provide some coverage for students living in dormitories, so check before you sign up.

12. Renter's insurance

Even if you don't own a home, you may still want insurance coverage for possessions such as your clothes, furniture, and electronics in case of theft or damage. In fact, many landlords require you have this kind of insurance. Depending on the coverage, policies start at around $12 per month. (See also: 5 Reasons You Definitely Need Renters' Insurance)

13. Antiques insurance

If you have a valuable collection of antiques, coins, stamps, fine wine, or anything else out of the ordinary, you might want to consider getting your collection appraised and getting insurance coverage to replace it in case of damage, theft, or destruction. Standard homeowners insurance policies have limited coverage for special items, so adding a rider or separate policy may make sense. Premiums can vary widely depending on the appraised value of your items.

14. Longevity insurance

One of the big variables in retirement planning is estimating your life span. Living for a long time increases the amount of funds you'll need in retirement. If you are worried about outliving your retirement savings, you can get longevity insurance, a type of deferred annuity, that starts paying out once you hit a certain age, such as 85. An important thing to note is longevity insurance is "use it or lose it" — if you die before collecting your benefit, the money is lost.

15. Mortgage protection insurance

Mortgage protection insurance pays off your mortgage in the event of your death, and covers your loan payments if you become disabled or lose your job. If you have life insurance and disability insurance, you may already be covered for this risk. Mortgage protection insurance can be a good option if you are in a high risk occupation and cannot easily get disability insurance. Premium costs vary but are typically several hundred dollars per year.

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This article is from Dr Penny Pincher of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Reasons You Definitely Need Renters' Insurance

Damian Davila — Wed, 02 Dec 2015 18:07:53 +0000

In the U.S., the national rent average rose 3.3% over a year ago rents — although some cities saw even greater annual increases. Since last year, renters saw their median rent climb 5% in Detroit, 8.5% in Kansas City, and a whopping 14.9% in San Francisco.

Faced with ever-increasing rents, many Americans may opt to skip renters' insurance. But while there are many kinds of insurance that aren't worth it, renters' insurance simply isn't one of them. Here are five good reasons why you totally need renters' insurance.

1. Protection for Your Personal Property

A very common renters' misconception is the belief that their landlord's property insurance will cover damage or loss in case of fire or a break-in. But a survey from insurance company Nationwide revealed that 68% of renters ages 23 to 35 would spend an estimated $5,000 to replace their belongings if an unfortunate event did occur. Despite the potential big loss, a stunning 56% of the surveyed renters didn't have renters' insurance.

A standard HO-4 insurance contract, commonly referred to as renters' insurance, provides the necessary protection for your personal property against covered perils, including fire, theft, vandalism, and even volcanic eruption. A best practice is to look for a policy that provides 100% replacement cost protection, which may be a bit more expensive — but ultimately worth every penny. After all, you want to replace your loss with the latest TV model, not one from two years ago.

Another best practice: If you're an avid comic book collector, have a taste for expensive imported furniture, or are an early adopter of all things high-tech, look into floater insurance to get the necessary higher-limit coverage that you need for any specialty belongings.

2. Additional Coverage Away From Home

Most policies provide protection for your personal property up to 100 feet from your home, so your stuff is covered when moving or using your building or community's facilities, such as a shared pool or clubhouse.

However, there are additional benefits for owning renters' insurance. Depending on your policy, your personal property may also be covered in case of theft outside the premises of your home. Let's imagine that you're using your laptop and expensive high-definition earphones at a coffee shop. You walk away to get a refill and somebody makes a run with your items. The "off premise theft" clause of your renters' insurance may enable you to make a claim for the stolen items.

Consult your insurance agent and read the fine print of your policy to learn more about applicable coverages and limitations. For example, if you store many items in a trailer or storage facility for part of the year, you should ask about extended theft coverage.

3. Liability Protection

Life happens. Say one night one of your friends slips and falls down the stairs at your apartment, severely hurting her back. Or your dog bites your neighbor's son, requiring your neighbor to spend several hundred dollars in medical expenses. While you can't prevent every single event, you can buy coverage against potential lawsuits.

If you are held legally liable by a court, then the liability portion of your renters' insurance would cover payouts for medical bills related to the accident, or replacement costs for the other party's property damaged at your home.

Keep in mind that your dog's breed may affect your monthly premium or even your eligibility for coverage. Many insurance companies will deny coverage for pit bulls, Staffordshire terriers, doberman pinschers, rottweilers, and German shepherds. When shopping for renters' insurance, provide full disclosure of your dog's breed and history of biting or abuse (in the case of rescue dogs).

4. Affordable Price for Loss and Liability Protection

In the survey from Nationwide, three out of four of those without renters' insurance don't realize they can get monthly coverage for as little as the cost of a pair of movie tickets.

According to the National Association of Insurance Commissioners, the average renters' insurance policy costs between $15 and $30 month for $30,000 to $50,000 of property coverage, with a deductible ranging from $500 to $1,000.

However, lower prices are possible. In 2014, a writer for Forbes magazine was able to find a renters' insurance policy to cover $25,000 of his personal property for an annual lump sum payment of $150 ($12.50 per month). Paying 0.60% to fully protect all of your stuff is as affordable as it gets.

Check for additional potential savings for:

Having certain security or fire-prevention systems;
Being a non-smoker;
Being part of a special interest groups (e.g. labor union, alumni association);
Bundling with existing car insurance policy;
Staying claim-free for a specific period of time; or
Having special status (e.g. senior citizen, college student, or military).

5. Greater Choice of Rental Opportunities

Last but not least, making the investment in renters' insurance may expand your options when looking for apartments. More and more landlords are requiring renters' insurance from their tenants.

The cost of homeowners' insurance is rising faster than that of renters' insurance. For example, in 2012, the average premiums for homeowners' insurance and renters' insurance increased by 5.6% and 0%, respectively, from the previous year.

A landlord can only legally require tenants to carry renters' insurance when signing a new contract or renewing an existing lease. By shopping in advance for an adequate policy, you can have ammunition to prevent a rent increase — or be ready to find a new and better place!

How are you protecting the personal property in your home?

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why You Should Have Renters Insurance

Little House — Wed, 22 Jun 2011 09:48:24 +0000

I've been a renter my entire adult life and have been fortunate not to have any reason to make a claim on my renters insurance. So why do I still carry it? Because accidents do happen, unfortunately. Though I've been lucky in the past, this doesn't dissuade me from wanting to make sure I'm covered in case of a mishap in the future. I've heard too many stories about renters who happened to be the victims of natural disasters or crimes and found out after the fact that their landlords' insurance didn't cover their personal property. And that was if their landlords actually had insurance.

While I haven't experienced any crime, disaster, or accident serious enough to warrant using my insurance, I am glad to have it for several reasons. (See also: When You Should and Shouldn't Rent)

In the event that your landlord doesn't carry any

Now it might be the law in some states that a homeowner must carry insurance, but that doesn't mean that every homeowner does.

Take my last rental for instance. I was renting a run down house in a very middle class neighborhood. My landlord owned a few rental properties and was somewhat lazy. Not only did he not repair his properties, allowing them to fall into a state of decrepitude, it turned out he didn't even bother to pay his homeowners insurance bill. I only happened upon this information through another one of his tenants who had suffered property loss through an electrical fire. Had that tenant had renters insurance, most of his personal property would have been replaced without the headache of a legal scuffle with the landlord. At that moment, I was ever so glad I had renters insurance.

In case of a natural disaster

Every state in the U.S. is prone to some sort of natural catastrophe, whether it's hurricanes, tornadoes or earthquakes. I just happen to live in Southern California, land of the rumbling ground. I haven't experienced an earthquake large enough to damage property since 1994, yet there's a good chance another will occur in my lifetime. Few insurance companies offer earthquake insurance these days, but my carrier offers it with a high deductible. Even with the large deductible it's worth it since I'll never know when "the big one" might hit.

Because it can cover accidents that happen within your home

Have you ever had a guest fall down your staircase, trip over your cat, or burn themselves on your stove? Your landlord's homeowners insurance will cover accidents that happen around the external perimeter of your rental property, but it may or may not cover accidents that happen within the interior of the property. Having renters insurance with a personal liability rider will cover these types of accidents, leaving you on good terms with your accident-prone friends.

The cost of renters insurance is minimal

Prices are based on the stated value of your personal belongings. For instance, the lower the replacement cost of your personal belongings, the less the monthly payment. When I first purchased my renters insurance policy years ago, my monthly payment was under $20 a month. As I've accumulated valuable furniture and appliances over the years, I've bumped up my coverage but am still paying less than $500 for the year, and that's with earthquake coverage.

The wise saying "it's better to be safe than sorry" most definitely applies when it comes to renters insurance.

This article is from Little House of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Insure Jewelry for Cheap (or Free!)

Daniel Packer — Mon, 30 May 2011 10:24:11 +0000

I won't won't tell you the whole story of how I proposed to my future wife, but with the ring came another expense — jewelry insurance. We wanted to make sure that if it was lost, stolen, or damaged considerably, that we would only be responsible for a fraction of the cost. (See also: Classy Weddings on the Cheap)

I didn't do my research at the time because I was in a rush to get some sort of insurance for it, and now it looks like there are some fantastic options that I passed up. After doing a lot of research, it turns out that jewelry insurance is fairly inexpensive, and in some cases you can get it for free!

There are two ways to insure a piece of jewelry. You can either go to a company that sells specific jewelry insurance, or you can have the piece of jewelry added to a homeowners or renters insurance policy.

If you choose to go with the jewelry-specific option, your choices are limited. There aren't many companies out there that provide personal jewelry insurance, but Jewelers Mutual is the most popular.

Private Jewelry Insurance

As a general rule, you can expect to pay between $1 and $2 for every $100 worth of jewelry you want insured. So a $10,000 engagement ring would cost between $100 and $200 per year. These prices change significantly based on location (in Washington, DC, for example, it would cost $105 per year to insure a ring of that price, but in Los Angeles, the same ring would cost $200 per year to insure).

It's important to review the insurance policy before buying because not everything will be covered. Wear and tear are typically not part of the policy, and a defect in the jewelry wouldn't be covered either (that would have to be taken care of by the jeweler who created it).

Insuring Jewelry With Homeowners or Renters Insurance

The second option is having jewelry added to a homeowners or renters policy. This is probably the cheapest way to go if it's available. Why? While each state has its own rules, a renters policy has to have a minimum amount of coverage, typically $15,000 to $20,000. If the contents of your belongings don't add up to $20,000, then you have some space left over. Let's use an example. If you have $5,000 worth of valuables at home, buy a ring for $10,000, and add it to the renters insurance policy, you'll still be within your limit, and the ring would be covered should something terrible happen.

Which Option Is Better?

If you have renters or homeowners insurance and have the option to add a piece of jewelry onto the policy at no cost, that's definitely the best option! If you don't have renters or homeowners insurance and are deciding between that and private jewelry insurance, take a look at rates for both. It never hurts to compare, and when I looked online for renters insurance rates (just a few days ago because I was curious) in Washington, DC, a $15,000 policy cost just $81 per year. Online I found varying rates (as high as $131 for $20,000 worth of coverage), so comparison shopping is the way to go!

Right now, the ring I bought is insured with a private insurer, but it looks like it's time for me reconsider!

Is your jewelry insured?

This article is from Daniel Packer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Pessimism Pays - Why Expecting the Worst Can Save You Money

Lana Goodrich — Sun, 06 Jan 2008 20:33:33 +0000

What’s the first thing people tell you when you start feeling down in the dumps? “Don’t worry – things will get better!” But sometimes, being too positive is just a one-way street to being unprepared. Here are four common worries and why dwelling on them can help you save cash.

“What if I lose my job?”
You’re right to worry. The economy is on shaky ground, and you could be fired or laid off due to any number of circumstances. Take it for granted that you’re going to leave your job eventually. This is a good time to set aside money for an emergency fund and put aside at least three month’s living expenses. Update your resume, C.V. or portfolio so that they’re current and they highlight your best work. Network with acquaintances and put your feelers out for similar jobs – even if you have no intention of leaving quite yet. Being ready is the best way to bounce back.

“What if I get into a horrible car accident?”
No one wants to think about what would happen if they were hurt or killed in an accident – but you should. Make sure you have life and disability insurance. Write your will or establish a trust for your family and detail where all your assets should go. Establish who you’d like as your power of attorney if you ever end up in the hospital and unable to make your own decisions. Bad things happen to people of all ages. Being young is no excuse for not being prepared for an emergency.

“What if my future spouse leaves me?”
How about a prenuptial agreement? Oh, I know what you’re thinking. But really, wouldn’t you rather protect your best interests – and your future spouse’s – while you’re in a loving state of mind? Should you end up divorced, you don’t want to spend so much time fighting over a couch that the cost of legal fees could’ve easily bought you another one. Best case scenario, you never use the prenuptial agreement. Worst case scenario, it’s a lot less to worry about if your marriage goes down the drain.

“What if my house burns down?”
If you bought your house with a mortgage, you were required to purchase homeowners insurance, which covers things like damage from fire, lightening, hail and storms. But if you’re a renter, there’s a good chance you may not have insurance. When you rent, the building is insured by your landlord or property management company. If there’s a fire, your landlord is only responsible for the building, not any personal property you lose. A basic renter’s insurance plan replaces personal property and can cost you as little as $10 a month through any insurance agent, such as AAA or Geico.

So tell me, what are your financial worries and how do you prepare for them?

This article is from Lana Goodrich of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: