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3 Types of Insurance You Need to Avoid Financial Disasters

3 Types of Insurance You Need to Avoid Financial Disasters

Insurance is frustrating. While it can surely come in handy in a pinch, it’s hard not to look at the money you spend on a given policy and feel you’ve wasted it if you don’t need to make a claim. Look no further than the famed Chris Rock bit where he refers to insurance as “in case s***” — “If s*** don’t happen, shouldn’t I get my money back?”

Given this popular (and understandable) perspective, you may be avoiding a few different types of insurance. Unfortunately that path can be a financial disaster waiting to happen. That’s why I thought I’d highlight a few different types of insurance that are actually worth spending your money on.

Auto-Insurance and AAA

Whenever you see someone get pulled over in a movie or on a TV show, the officer will likely ask the driver for their license and registration. However, in many states, what they’ll actually request is your license, registration, and proof of insurance. That’s because several states have minimum insurance requirements for drivers that ensure they’ll be able to pay for any injuries or damages they’re responsible for. Similarly some lienholders may require you to have certain coverages as part of your loan terms.

Beyond these legal necessities, auto insurance is a must for any driver. After an accident, the costs you might need to cover just to get your vehicle back in working order can be astronomical. Moreover, as mentioned, you may also be on the hook for repairs to the other driver’s car or property if the accident is deemed your fault. For these reasons and many more, auto insurance is absolutely worth the price you pay for it.

On top of regular auto insurance, you might also consider obtaining a AAA membership. Incidentally, AAA is what gave me the idea for this article in the first place thanks to what happened to me on my road trip last weekend. While passing through Georgia, we got a flat tire and were forced to pull over. Since I know practically nothing about cars, I was thankful for my AAA membership as I was able to call someone out to help me change the tire. Moreover, since we decided it was best to stay the night and get the tire replaced instead of trying to drive 12 hours on a donut, we likely could have used our AAA card to get a discount at a nearby hotel. In this case I ended up just booking on Hotwire.com, but believe me when I tell you I’ve definitely covered my AAA membership fee in various discounts alone. For that reason plus the peace of mind it provides me while traveling, I’d definitely recommend that any driver join.

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