Here’s the thing: most of us don’t think about insurance until something hits the fan. I know I didn’t. I used to treat insurance like that boring drawer full of paperwork—you know, the one you only open when something breaks. But after a surprise hospital visit and a wrecked bumper (same year, lucky me), I finally asked the real question: What insurance do I actually need?
Let’s walk through this together—no jargon, no pressure. Just practical advice from someone who’s been there.
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| Which Insurance Do You Really Need? A No-Nonsense Guide |
Why Bother with Insurance at All?
Because life’s unpredictable. A car accident, an unexpected diagnosis, or even a burst pipe can set you back thousands. Without insurance, you’re basically gambling your savings—and your future.
But here’s the kicker: you don’t need every policy out there. Some are essential. Others? Just nice to have, if that.
Health Insurance – The One You Don’t Skip
Out of all the types of insurance, this one’s non-negotiable. A buddy of mine skipped health coverage for a year to “save money.” Then he needed surgery. The bill was more than he made in six months.
Why it matters: Medical costs in the U.S. are sky-high. A simple visit to the ER can drain your bank account fast.
Where to get it: If your job offers a plan, start there. If not, look into the Marketplace or private options. Just make sure the deductible and monthly premium make sense for your budget.
Auto Insurance – Required and Worth It
If you drive, you need it. It’s that simple. And if you’ve ever been rear-ended by someone without insurance (like I was), you’ll appreciate having solid coverage.
Tip: Go beyond the state minimum. Get collision and comprehensive if your car’s worth protecting.
Even a small accident can cost big without coverage.
Homeowners or Renters Insurance – Don’t Wait for Disaster
Whether you own or rent, you’ve got stuff worth protecting. A few years ago, a neighbor’s pipe burst and flooded my apartment. My renters insurance covered the damage to my laptop and furniture. Best $12 a month I ever spent.
Homeowners covers your house and your belongings. Renters only covers your stuff—but trust me, it adds up faster than you think.
Life Insurance – When Others Rely on You
If someone depends on your income—your partner, kids, or even your parents—you’ll want this one.
Stick to term life insurance. It’s affordable, easy to understand, and does what it’s supposed to do.
Don’t get lured into whole life unless you have specific long-term plans and understand the cost.
Disability Insurance – The Overlooked One
Here’s what most people don’t realize: your chances of becoming temporarily disabled are higher than dying young. A back injury or illness can take you out of work for months.
Disability insurance helps cover your income during that time. If your employer offers it, great. If not, it’s worth looking into—especially if you’re self-employed.
Not Every Policy is a Must-Have
Some types of insurance get pushed hard but aren’t essential for everyone.
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Pet insurance: Unless you’ve got a breed with known health issues, you might break even at best.
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Extended warranties: Usually overpriced and full of fine print.
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Mortgage life insurance: Traditional term life can do the job for less.
Quick Recap: What You Really Need
| Insurance Type | Must-Have? | Who It’s For |
|---|---|---|
| Health | ✅ Yes | Everyone |
| Auto | ✅ Yes | Drivers |
| Homeowners/Renters | ✅ Yes | Homeowners & Renters |
| Life | ⚠️ Maybe | Those with dependents |
| Disability | ⚠️ Maybe | Working adults |
| Pet/Warranty/Mortgage LI | ❌ No | Usually not essential |
Here’s the deal: if something could wipe out your finances overnight, get coverage. If it’s more of a “just in case,” weigh the risk vs. cost.
Final Thoughts
Insurance isn’t fun, but it’s necessary. Start with what’s essential—health, auto, and coverage for your home or stuff. Then think about life and disability based on your situation.
I’ve made my fair share of insurance mistakes. Hopefully, this helps you avoid a few of them.
Written by:
Mark T. Collins
Former insurance agent turned full-time blogger. I write about money, mistakes, and how to protect your wallet without losing your mind.
Last updated: June 10, 2025
Disclaimer: This article is for informational purposes only. Please consult a licensed financial advisor for personal advice.
