Life is full of uncertainties and risks that would happen at any time – your vehicle being stolen, your apartment being burned down or serious health issues. However, many people don’t know what do in these circumstances, which can lead to devastating financial situations.

The good news is that you can buy insurance coverage to reduce your loss and ensure a good life without worrying about these issues. In fact, this can be one of the most significant financial decisions that you can make for you and your family. But how do you know which type of insurance you need the most? Previously I covered strange insurance policies, here is all you need to know about the most common insurance policies to help you protect the most important things in your life.

1. Property insurance

It takes a lot of time and money to choose and purchase the right belongings, décors, and furniture for our home. Many people cannot afford to replace or repair these items when they get destroyed or damaged due to natural disasters (such as a fire, storm or flood).

By paying a premium fee to an insurance firm, you will be compensated for the costs associated with the incidents covered by a policy. These might include damage to our house, car, and valuable items that have been stolen or damaged accidentally. Keep in mind that you need to provide correct information when filing for insurance, or you won’t get your full coverage.

2. Life insurance

Life insurance is a policy that provides financial compensation in case of disability or death. More specifically, this lump sum of money will be paid to you when you are critically ill, permanently disabled or paid to your family should you pass away. This will ensure that you or your family can meet the financial needs if these disasters happen.

It is probably one of the most important decisions that you should make. Life insurance is calculated with the rate per thousand (cost per $1k). Life Insurance calculations might look like sports betting odds, but there are number of factors that influence the calculation. Age, Gender, Occupation, Location are most common risk factors. You can take risks with betting on sports, but not with loved ones’ future.

3. Travel insurance

It is a good idea to purchase travel insurance for your upcoming overseas holiday. These policies will cover your belongings against theft or loss, extra expenses if your flight is cancelled or delayed, and medical treatment should you get ill or have an accident during travelling. More importantly, medical bills might be extremely high in another country, and it will be a serious financial risk to go on your holiday without buying travel insurance.

Keep in mind that travel insurance policies often come with exclusions for some unattended baggage and pre-existing conditions, so make sure to read the terms and conditions carefully and understand exactly how you are covered.

4. Car insurance

Every state requires car owners to carry vehicle insurance. Even when it isn’t mandatory, you should also purchase these policies because a car might be one of the most expensive assets you have. If it gets damaged or stolen, it might be costly to replace, repair, or buy a new one.

Comprehensive car insurance is typically the most common type, which will cover most accidents such as damage, theft, and loss. More importantly, it also gives compensation when you cause an accident and damage other properties or vehicles. It might be tempting to avoid insuring your cheap car and save money, however what if you have a crash with a Lamborghini? A good insurance policy will do the hard work and protect you from a financial disaster.

The cost of insurance will vary a lot, depending on your claims history, age, your excess amount and the type and make of your vehicle.

5. Health insurance