The Most Important Things to Keep Insured in California

In today's world, insurance plays a crucial role in protecting your financial stability and ensuring peace of mind. Whether you’re a homeowner, business owner, or just trying to navigate life’s uncertainties, understanding which types of insurance are most important can help you make informed decisions. Here’s a rundown of the ten essential types of insurance you should consider:

1. Your Home

Homeowners insurance is fundamental for protecting your property from damage, theft, and/or loss. It typically also covers liability for accidents that occur on and off your property. Without it, you could face significant out-of-pocket expenses to repair or replace your home and belongings. If you have a mortgage on your home in California, having home insurance oftentimes is a requirement to your lender. So, considering OVER 60% of homes owned in California have a mortgage on them, this may not even be an option for you.

2. Your Vehicle

Auto insurance is essential for protecting yourself financially in case of car accidents, theft, or other vehicle-related issues. It also covers liability for injuries or damage caused to others, making it a must-have for all vehicle owners. It's no secret that California can be considered is a fairly litigious state. Meaning, if you bumper tap someone else, you can easily run the risk of that person lawyering up and claiming bodily injury as well as property damage and you do not want to be on the wrong side of that lawsuit without insurance. In addition, It's against the law to drive without insurance in California. Fun fact: 1 in 4 drivers in California are not insured, and 2 in 4 drivers in California are underinsured, leaving only 25% of drivers with adequate insurance in California... YIKES!

3. Health Insurance

Health insurance is critical for managing medical expenses and accessing necessary healthcare services. It helps protect you from the high costs of medical treatments and provides peace of mind knowing that you’re covered for health-related issues. This is one of the more well-known types of insurance, so I won't dive too much into it, but just know, you don't want to go without this. Did you know the average cost of an ambulance ride in 2022 was around $1,800?? Could you pay that out of pocket? Even if you could, would you want to? I can take an Uber from Los Angeles to Las Vegas and back for less than that. I don't know about you, but if I didn't have health insurance and I broke my leg, I'm just taking the Uber. Whether through your employer or through a personal provider, save yourself the financial burden and get health insurance.

4. Yourself (Life Insurance)

Arguably the most important insurance product offered, life insurance ensures financial support for your dependents in the event of your death. It helps cover expenses, debts, and maintain the financial stability of your loved ones, making it an important consideration for anyone with dependents. I get it, no one wants to think about the worst case scenario, but that doesn't make it any less important to plan for. This may be a hard concept to grasp, but the only certain thing in life is death, so life insurance should be considered a no brainer to anyone with loved ones. We're only getting older, so if you don't have this yet, I'd say you need this like yesterday. The earlier you get in, the less the cost. A wise man once said, "If you're the head of the household and can't afford life insurance, that's how you know you need it." Think about it. If you're the bread winner of the family, and you're already strapped for cash, what's your family left with when you're no longer providing? Life insurance is a product made to ensure your loved ones are supported when you're no longer there to provide support, and there are inexpensive options out there that can get your foot in the door. You can opt for term insurance, final expense, an IUL, I mean the list goes on. The important thing is you lock an insurance policy in now while you're still healthy, so I'd recommend you get life insurance NOW.

5. Disability Insurance

Disability insurance provides income replacement if you are unable to work due to illness or injury. This type of insurance helps cover living expenses while you recover, protecting you from financial strain during periods of disability. You can think of this one as insurance coverage for your future income. Like life insurance, you never want to have to use this, but it's good to have a plan in place in the event you need to. Disability insurance doesn't always cover 100% of income. In fact, it usually covers 60-80%, but that's better than the 0% you'll be getting if you don't have it. The good news is long-term disability insurance covers most types of injuries and illnesses that may keep you from working, so this is pretty crucial to ensure the bills still get paid. Sometimes, you can even get this coverage through work. If you don't have this, it may be a good idea to ask your employer about it.

6. Business Property Insurance / Tools and Equipment Insurance

IF YOU'RE A CONTRACTOR, READ THIS! For business owners, insuring property such as equipment, inventory, and facilities is crucial. This coverage protects against damage, theft, or loss, ensuring that your business can continue operating smoothly without significant financial setbacks. I can't tell you how many times we've had an insured file a claim because a thief broke into their work van/truck and stole their tools. This is a hard conversation to have as an insurance agent when they opt out of insuring their tools and equipment. Spending a couple hundred bucks a year can save an incident that's going to cost you thousands of dollars. If you're a pressure washer, plumber, electrician, painter, etc. trust me, you're going to want to make sure you have this.

7. Liability Insurance

Liability insurance protects you from claims of injury or damage caused to others due to your actions or negligence. It’s essential for both personal and business contexts, helping you manage potential legal and financial consequences. Think of this coverage as a brick wall that safeguards your business and/or assets. The more assets you have, the more liability insurance you're going to want to keep. The general rule of thumb is you want to have AT LEAST enough liability insurance to cover your net worth. Liability claims can happen anywhere. We've had a case where a realtor was showing a property to a neighboring house of our insured's property, and tripped and fell over our insured's driveway. Was it our insured's fault? Probably not. Did our insured get sued? ABSOLUTELY. This goes to show that you can be as safe as possible and still be at risk of a lawsuit, especially in the beautiful state of sunny California. These types of instances can happen off your property too. A good example is someone tripping and falling over your shopping cart at a grocery store. Now, do these situations happen frequently? No, but it only takes one incident to happen to cause potential financial devastation. The good news is if you have home insurance, typically you already have some liability insurance in force. Is it enough? That's for you to decide. If you own a business, you especially want to have general liability insurance in place.

8. Professional Liability Insurance

BARBERS, BEAUTICIANS, CPA'S, LAWYERS, REALTORS, AND ANYONE ELSE WHO OWNS A BUSINESS IN A PROFESSIONAL FIELD, YOU'LL NEED THIS. Also known as errors and omissions insurance, this coverage is important for professionals who provide services or advice. It protects against claims of negligence or inadequate work that could result in financial losses for clients. We had a horror story of a situation where a hairstylist dyed her client's hair the wrong color, which wouldn't have been that big of an issue... IF IT WASN'T A DAY BEFORE THE CLIENT'S WEDDING. That's right. Imagine your hair screwed up a day before your wedding day. Would lawyer up against your beautician? I wouldn't blame you and I don't think the beautician could either. This is what professional liability insurance is for. You didn't necessarily hurt someone physically, but maybe you're a tax preparer and you missed a filing deadline, you're an accountant and you made math mistake or provided poor advice that exposed your client to financial harm. Professional liability is different from general liability insurance, so you're going to want to make sure you have them both.

9. Workers' Compensation Insurance

Workers' compensation insurance covers employees' medical expenses and lost wages if they are injured or become ill due to their work. It also protects businesses from lawsuits related to workplace injuries, making it a vital part of any business insurance strategy. If you have employees, this isn't an option in California, you need to have this. Even if the person working for you isn't on payroll, it's a good idea to have some sort of workers' compensation in force. And If you hire people as a 1099, it's a good idea to make sure they have their own workers' compensation insurance, otherwise, guess who's policy they're going after when they get hurt? That's right, you. I'll skip the horror stories on this one because not having this is against the law when you do have employees in California, but just know there can be severe repercussions for not having this when things hit the fan, and your employee get's injured. Save yourself the trouble and get covered.

10. Travel Insurance

Travel insurance is essential for protecting against unexpected events such as trip cancellations, medical emergencies abroad, or lost luggage. It ensures that your travels are as smooth and stress-free as possible, providing coverage when things don’t go as planned. If you're currently, or planning on racking up those air miles, you're going to want to have this.

Conclusion

Understanding and investing in these types of insurance can provide a safety net against life's uncertainties and protect your assets. Whether you're securing your home, your business, or your health, having the right insurance coverage is a smart and necessary step to ensure financial stability and peace of mind. Assess your needs, consult with insurance professionals, and make sure you’re adequately covered for the various risks you may face.