Three insurance policies essential for personal protection

Insurance is an essential part of life, but with so many options, it can be difficult to know what policies are right for you.

A standard personal package can give you meaningful protection for your car, home and life. While each one of these insurance policies have their own complexities, here’s a basic overview of each type of coverage and how they can protect you.

Home and renter’s insurance

Home insurance is crucial for home ownership. It protects one of life’s most valuable assets. Typically, there are two components of home insurance: property coverage and personal liability coverage.

Property coverage provides financial reimbursement for your home and possessions in the case of damage or theft. This also extends to detached buildings around the property — structures like garden sheds, gazebos or garages.

The homeowner’s policy will also include loss-of-use coverage, which pays for additional living expenses while your home is being repaired. For example, if there’s a fire in your house, your insurance policy will reimburse you for any expenses beyond what you ordinarily pay, including hotel costs, food or mileage for longer commutes. If you pay $1,000 for your mortgage per month, but the temporary lodging cost $1,500, you’d be reimbursed the difference of $500.

The other component of the homeowner’s policy is personal liability coverage, which extends to accidents that happen on or off your property. If a person slips and falls on ice on your property, liability coverage will pay damages stemming from a claim or lawsuit. While uncommon, there are instances when liability coverage extends beyond your property — for example, hitting a golf ball through a window on a golf course.

A renter’s policy is similar to homeowner’s without insurance for a home or other structures. The renter’s policy insures the possessions inside your living space and personal liability coverage. A renter’s policy is relatively inexpensive and protects you if something happens out of your control — like a neighbor starting a fire that damages your apartment complex.

Auto insurance

Covering yourself and others in the event of an auto accident is not only important, it’s required by Iowa state law. There are two parts to an auto insurance policy: physical damage and liability.

Physical damage has two components: Collison coverage which pays to repair or replace your car if you’re in an accident. Comprehensive coverage pays for damages due to something other than an accident, like a deer hit, natural disasters, vandalism or theft.While the aforementioned coverages are optional, liability is required by state law. This part of your policy covers you if you’re found legally liable for an accident. Appropriate liability limits can prevent loss of assets and potential bankruptcy if you’re involved in a claim or lawsuit.

Although every situation is different, we recommend liability limits of $250,000 per person and $500,000 per accident. You should review with your insurance agent to determine the right amount for you.

Umbrella liability insurance

A $1 million umbrella liability policy is common and will provide protection for claims that exceed the limits provided by the home and auto policies. If you’re in a car accident and someone is seriously injured or killed, claims could be in excess of the $250,000 auto insurance limit. In that case, the umbrella coverage applies and will provide additional protection of your assets.

The three policies above make up the standard personal insurance package. Each has many additional options to be discussed and considered for your individual situation. The agents at Integrity Financial Group can help educate you on all of these options and help customize a personal insurance package designed for your specific needs.