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  • Pet Insurance Basics: Is It Worth It?

    Veterinary care has become more advanced and more expensive. A single emergency surgery can cost thousands of dollars. Pet insurance helps pay those bills, but policies vary a lot. Here is how it works.

    How pet insurance works

    Unlike most human health insurance, pet insurance usually reimburses you. You pay the vet, submit a claim, and the insurer pays back a percentage of the eligible bill after your deductible. Most plans let you visit any licensed veterinarian.

    Types of plans

    • Accident and illness: the most common type. Covers injuries, illnesses, emergencies, surgeries, hospitalization and often prescriptions and diagnostics.
    • Accident-only: lower cost, covers injuries such as fractures, bites and swallowed objects.
    • Wellness add-ons: help pay for routine care such as vaccines, checkups and dental cleanings.

    Common exclusions

    • Pre-existing conditions, which is the most important limitation
    • Waiting periods after enrollment, often longer for orthopedic conditions
    • Cosmetic procedures and breeding costs
    • Some hereditary conditions with certain insurers

    Key choices that affect the price

    • Reimbursement rate: typically 70, 80 or 90 percent.
    • Deductible: annual or per condition.
    • Annual limit: a capped amount or unlimited.
    • Your pet’s age, breed and location.

    Is it worth it?

    Pet insurance is most valuable if a sudden large vet bill would strain your budget, and when you enroll while your pet is young and healthy, before any condition becomes pre-existing. If you prefer, setting aside a dedicated emergency fund for your pet is an alternative. Compare several plans and read the sample policy before you buy.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • Umbrella Insurance: Who Needs It and How It Works

    A serious accident or lawsuit can cost far more than the liability limits on your auto or homeowners policy. Personal umbrella insurance adds an extra layer of protection, often starting at $1 million, for a relatively modest premium.

    How umbrella insurance works

    An umbrella policy kicks in after the liability limits of your underlying policies are used up. For example, if you are found responsible for $700,000 in damages after a car accident and your auto policy covers $300,000, your umbrella policy can pay the remaining $400,000, up to its limit.

    What it covers

    • Bodily injury and property damage liability above your auto and home limits
    • Some claims your other policies may not cover, such as libel, slander and false arrest
    • Legal defense costs, often in addition to the policy limit
    • Liability involving rental properties, boats and recreational vehicles, when listed

    What it does not cover

    Umbrella policies do not cover your own injuries or damage to your own property, business activities, or intentional acts. Business owners need commercial coverage.

    Who should consider it

    • Homeowners and people with significant savings or investments
    • Families with teen drivers
    • Owners of pools, trampolines or dogs
    • Landlords with rental properties
    • People with a high income or a public profile

    Requirements

    Insurers usually require minimum liability limits on your auto and home policies before selling an umbrella policy, for example 250/500 on auto and $300,000 on home. Buying all policies from the same company can make this easier and may qualify you for a discount.

    Learn more about the policies underneath an umbrella in our auto and homeowners guides.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • Do You Really Need Renters Insurance?

    Do You Really Need Renters Insurance?

    Many renters assume their landlord’s insurance protects them. It does not: the landlord’s policy covers the building, not your belongings or your personal liability. Here is why renters insurance is worth considering.

    Five situations where renters insurance helps

    • A fire in your building destroys your furniture, clothes and electronics.
    • A burglary or a stolen laptop from your car or while traveling.
    • A guest slips and is injured in your apartment and seeks payment for medical bills.
    • Your bathtub overflows and damages the apartment below.
    • Your unit becomes unlivable after a covered loss and you need a hotel.

    How much does it cost?

    Renters insurance is one of the most affordable types of insurance. Your price depends on your location, the amount of coverage, your deductible and your claims history. Bundling it with auto insurance often reduces the total cost of both policies.

    How to choose coverage

    • Estimate the value of your belongings with a quick room-by-room inventory.
    • Choose replacement cost rather than actual cash value coverage when possible.
    • Select liability limits that protect your savings; many policies start at $100,000.
    • Add riders for valuable jewelry, bikes or collectibles.
    • Consider flood or earthquake coverage if you live in a high-risk area.

    Is it required?

    No state law requires renters insurance, but landlords can require it in the lease, and many do.

    The verdict

    For most renters, the low cost of a policy is small compared with the cost of replacing everything you own or paying a liability claim yourself. Read our renters insurance guide for more details.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • The ACA Marketplace Explained: How to Choose a Health Plan

    If you do not get health insurance through work, Medicare or Medicaid, the Health Insurance Marketplace created by the Affordable Care Act (ACA) is the main place to buy individual and family coverage. Here is how it works and how to choose a plan.

    Where to shop

    Most states use HealthCare.gov, while others run their own exchange websites. All Marketplace plans cover essential health benefits, such as hospitalization, prescription drugs, maternity care, mental health services and preventive care, and cannot deny coverage because of pre-existing conditions.

    The metal tiers

    • Bronze: lowest premiums, highest costs when you need care. Good protection against worst-case scenarios.
    • Silver: moderate premiums and costs. If your income qualifies, silver plans can include cost-sharing reductions that lower deductibles and copays.
    • Gold: higher premiums, lower costs when you get care. Good if you use care regularly.
    • Platinum: highest premiums and lowest costs at the time of care, not available in every area.

    Some people may also qualify for catastrophic plans, which have very high deductibles and low premiums.

    Financial help

    Depending on household income and size, you may qualify for premium tax credits that lower your monthly premium. The Marketplace application calculates your eligibility. Report income changes during the year so your credit stays accurate and you avoid owing money at tax time.

    When to enroll

    Open Enrollment generally runs from November 1 to January 15 in states using HealthCare.gov; some state exchanges have different dates. Outside Open Enrollment, a qualifying life event such as losing coverage, moving, marriage or the birth of a child can give you a Special Enrollment Period, usually 60 days.

    How to choose the right plan

    1. Check that your doctors, hospitals and prescriptions are covered in the plan’s network and formulary.
    2. Estimate your total yearly cost: premiums plus expected deductibles, copays and coinsurance.
    3. Compare out-of-pocket maximums, which cap your worst-case costs.
    4. Consider an HSA-eligible plan if you want to save pre-tax money for medical expenses.

    Free, trained assistance is available through HealthCare.gov’s local help finder. Learn the basics in our health insurance guide.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • What Does Homeowners Insurance Cover (and What It Doesn’t)?

    What Does Homeowners Insurance Cover (and What It Doesn’t)?

    Many homeowners only discover what their policy covers after something goes wrong. Understanding your coverage before a loss helps you avoid unpleasant surprises and expensive gaps.

    The six main coverages in a standard policy

    Most U.S. homeowners have an HO-3 policy, the most common type for single-family homes. It usually includes six parts:

    1. Coverage A, dwelling: the structure of your home.
    2. Coverage B, other structures: fences, sheds and detached garages.
    3. Coverage C, personal property: your belongings.
    4. Coverage D, loss of use: additional living expenses while your home is repaired.
    5. Coverage E, personal liability: injuries or damage you cause to others.
    6. Coverage F, medical payments: minor injuries to guests.

    Commonly covered events

    Fire and smoke, windstorms and hail (in many states with a separate deductible), lightning, theft, vandalism, the weight of snow and ice, and sudden, accidental water damage from plumbing are typically covered.

    Common exclusions

    • Flooding: excluded from standard policies. Flood insurance is available through the NFIP and private insurers, usually with a waiting period before it takes effect.
    • Earthquakes and earth movement: require a separate policy or endorsement.
    • Sewer backup: often excluded unless you add an endorsement.
    • Gradual damage: slow leaks, rot, mold and wear and tear.
    • Pests: termites, rodents and insects.
    • Business activities: home businesses often need separate coverage.

    How to fill the gaps

    • Check FEMA flood maps and consider flood insurance even outside high-risk zones.
    • Add a scheduled personal property rider for jewelry, art and collectibles.
    • Add water backup coverage if you have a finished basement.
    • Consider an umbrella policy for extra liability protection.

    Keep a home inventory

    Photos, videos and receipts make claims faster and easier. Store them in the cloud so they are safe if your home is damaged. Learn more in our homeowners insurance guide.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • Term vs. Whole Life Insurance: Which Is Right for You?

    Choosing between term and whole life insurance is the first big decision when you buy life insurance. Both pay a death benefit to your beneficiaries, but they work very differently and can cost very different amounts.

    How term life insurance works

    Term life covers you for a fixed period, commonly 10, 20 or 30 years. If you die during the term, your beneficiaries receive the death benefit. If you outlive the term, the coverage ends. Premiums are usually level for the whole term.

    Advantages: much lower premiums for the same coverage amount, simple to understand, and easy to match to a need such as a mortgage or raising children.

    Disadvantages: no cash value, and renewing or buying a new policy later can be expensive or difficult if your health changes.

    How whole life insurance works

    Whole life is permanent insurance that lasts your entire life as long as premiums are paid. Part of each premium builds cash value at a guaranteed rate, which you can borrow against or withdraw. Some policies also pay dividends.

    Advantages: lifelong coverage, fixed premiums and guaranteed cash value growth.

    Disadvantages: premiums are typically many times higher than term premiums for the same death benefit, and cash value grows slowly in the early years. Surrendering a policy early can mean losing money.

    Side-by-side comparison

    Term lifeWhole life
    Length of coverageFixed termLifetime
    CostLowerMuch higher
    Cash valueNoneYes, guaranteed growth
    Best forIncome replacement, mortgages, young familiesLifelong needs, estate planning, dependents with special needs

    Who should choose term life

    Most families who need to replace income while children are young or a mortgage is being paid off are well served by term life. A popular strategy is to buy term and invest the difference in premiums in retirement accounts.

    Who might consider whole life

    Whole life can make sense for people who need coverage that never expires, such as for estate planning, a lifelong dependent or business succession, and who have already maximized other savings options.

    Next step

    Estimate how much coverage you need, then compare quotes for both types. Our life insurance guide explains how to calculate the right amount.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • How Much Car Insurance Do You Really Need?

    How Much Car Insurance Do You Really Need?

    Buying only the minimum required by your state keeps your premium low, but it can leave you personally responsible for thousands of dollars after a serious accident. Here is how to decide how much car insurance you actually need.

    Start with your state’s minimum

    Almost every state requires liability insurance, and the required limits vary widely. Some states also require uninsured motorist coverage or personal injury protection. Your state department of insurance or DMV lists the exact requirements.

    Why the minimum is often not enough

    Minimum limits can be as low as $25,000 per person for injuries. A hospital stay, surgery or lost wages after a serious crash can quickly exceed that amount. If the damages go beyond your limits, the injured person can seek the difference from you personally, including your savings and future income.

    A practical way to choose liability limits

    • Few assets: choose more than the minimum if you can afford it, such as 50/100/50.
    • Homeowners and people with savings: many experts suggest at least 100/300/100.
    • High net worth: consider 250/500/100 or higher, plus an umbrella policy.

    Do you need collision and comprehensive?

    If you lease or finance your car, your lender will almost certainly require both. If you own your car outright, ask yourself whether you could afford to repair or replace it without insurance. For newer or valuable cars, the answer is usually no, so keep the coverage.

    Uninsured and underinsured motorist coverage

    A significant share of U.S. drivers are uninsured, and many more carry only low limits. UM/UIM coverage protects you and your passengers in that situation and is usually inexpensive compared with the protection it offers. Many advisors suggest matching it to your own liability limits.

    Useful extras

    • Gap insurance: covers the difference between your car’s value and what you still owe on a loan or lease.
    • Rental reimbursement: pays for a rental car while yours is being repaired after a covered claim.
    • Roadside assistance: towing, jump-starts and lockouts, unless you already have it through another service.

    Summary

    Buy liability limits that protect what you own, keep physical damage coverage while your car is valuable, and add UM/UIM coverage. Then lower your cost with discounts and the right deductible. See our auto insurance guide for the basics.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.

  • 12 Proven Ways to Lower Your Car Insurance Premium

    12 Proven Ways to Lower Your Car Insurance Premium

    Car insurance is one of the biggest recurring costs of owning a vehicle, and premiums have risen sharply in recent years in many states. The good news is that drivers have more control over their rate than they think. Here are twelve proven ways to pay less without giving up the protection you need.

    1. Shop around every year

    Insurers price risk differently, so the same driver can receive very different quotes for identical coverage. Compare at least three quotes at each renewal, and always compare the same limits and deductibles.

    2. Bundle your policies

    Buying auto and homeowners or renters insurance from the same company often unlocks a multi-policy discount.

    3. Raise your deductible

    Moving your collision and comprehensive deductibles from $500 to $1,000 can lower your premium noticeably. Only do it if you have enough savings to pay the deductible after a claim.

    4. Ask about every discount

    Common discounts include safe driver, good student, defensive driving course, multi-car, anti-theft device, paperless billing, automatic payments and paying the full term upfront.

    5. Try usage-based insurance

    Telematics programs track driving habits such as mileage, braking and time of day through an app or device. Safe, low-mileage drivers can earn significant savings, but risky driving can raise rates with some insurers.

    6. Keep a clean driving record

    Accidents, speeding tickets and DUIs can raise premiums for several years. Driving carefully is the most reliable long-term discount.

    7. Improve your credit

    In most states, insurers use a credit-based insurance score to set rates. Paying bills on time and reducing debt can help over time. California, Hawaii, Massachusetts and Michigan limit or ban the use of credit in auto insurance pricing.

    8. Choose your next car wisely

    Insurance costs vary by model. Vehicles with strong safety ratings, lower repair costs and low theft rates are usually cheaper to insure. Get a quote before you buy.

    9. Drop collision and comprehensive on an older car

    If your car is worth little, the cost of physical damage coverage may exceed what you could ever receive from a claim. A common guideline is to reconsider it when the annual cost exceeds about 10 percent of the car’s value.

    10. Review your mileage and usage

    If you now work from home or drive less, tell your insurer. Lower annual mileage can reduce your rate.

    11. Add a teen driver carefully

    Teen drivers are expensive to insure. Ask about good student and driver training discounts, and assign the teen to the least expensive car on the policy if your insurer allows it.

    12. Do not cut liability to the minimum

    Liability coverage protects your savings and income if you cause a serious accident. Reducing it to the state minimum is rarely a smart way to save. Cut costs with discounts and deductibles instead.

    The bottom line

    Combine two or three of these strategies, especially comparing quotes and asking about discounts, and most drivers can lower their premium. Learn more in our auto insurance guide.

    This article is for general information only and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy and talk to a licensed agent before making changes.