5 Kinds of Insurance You Need but May Not Have

Don't get caught without vital insurance coverage.

Buying insurance isn't fun because it means thinking about the risk of something going wrong. But it's far worse not to have coverage when a problem does arise. Unfortunately, many consumers don't know about all of the different kinds of insurance policies they may need.

In particular, here are five common types of insurance people overlook that could offer crucial protection.

1. Disability insurance

According to the Council for Disability Awareness, 1 out of 4 of today's 20-year-olds will become disabled prior to retirement. Despite this, far too many people have no insurance to provide them with income if an accident or illness leaves them disabled and unable to earn as much money as normal or even to work at all.

While Social Security offers some disability coverage, it can be hard to get approved, it typically takes a long time to get approved, and is only for severe long-term disabilities. It also doesn't necessarily replace all income.

Those who want to ensure they can maintain their quality of life and provide for loved ones even if they become disabled should be sure to buy disability insurance.

2. Life insurance

Life insurance is another crucial purchase that many people overlook. It provides money for loved ones to pay the bills and avoid a big decline in their financial stability in the event of an untimely death.

Life insurance should be purchased at a young age by anyone who has dependents or plans to in the future. Even stay-at-home parents and caregivers with no income should have coverage since the services they are providing have substantial value.

3. Pet insurance

Buying pet insurance may not seem important when bringing a cute young animal home, but even baby dogs and cats get sick or hurt. And animal companions grow up, get old, and often develop a wide variety of ailments.

There are a lot of advanced veterinary care options out there that cost tens of thousands of dollars. Owners should have pet insurance so they can make sure their fur family members get the best care without regard to price.

4. Renters insurance

Most people have heard of homeowners insurance, but renters insurance is more overlooked. It's really important to buy though, as a landlord's insurance won't provide full protections that a tenant needs.

Renters insurance can provide compensation for a renter's personal property if it is damaged or destroyed. If someone is hurt and the renter is held accountable because it happens in their unit, liability coverage could also protect them from financial disaster.

5. Umbrella insurance

Finally, umbrella insurance can be vital for those with significant assets to protect. That's because every other kind of liability insurance, such as home and auto liability coverage, have upper limits for how much they will pay out after an accident -- and victims can try to collect from drivers or homeowners personally if insurance isn't enough.

An umbrella policy provides additional coverage on top of what other liability policies do. It can be pretty cheap to get $1 million or more in extra coverage with umbrella insurance, and it is well worth doing to avoid losing everything if something goes wrong.