It’s a question that everyone ask themselves at some point, “how much insurance do I need?” Insurance is one of the most important investments you’ll make to protect your own investments and protect those you love. 

It’s insurance that allows you to sleep at night, knowing you and your family are protected if something should ever happen.

There’s insurance policies that cover just about anything you’d want and everything we do in life. The big question, “how much insurance coverage do you need?” How much insurance is “enough?”

Unfortunately, there’s not an easy answer. With that said, there’s some general rules that apply when you’re getting insurance, whether that’s car insurance, home insurance, renters insurance or some other type of insurance you need. 

Auto Insurance

Auto insurance is one of the most common types of insurance coverage you can get. Every state has a set of minimum requirements for car insurance. 

Colorado Minimum Requirements For Auto insurance

Most auto insurance coverage is usually expressed by a set of 3 numbers. For example, you may see a state requirement of 50/100/50. This means you’re required to have a minimum of $50,000 in coverage for each injured person in an auto accident, up to a maximum of $100,000 per accident (two people), and $50,000 coverage for property damage.

From a point of being “legal,” you are considered legal so as long as you carry your state’s minimum car insurance requirements. 

Now, while these requirements keep you legal, you may want to consider adding additional coverage. More coverage protects you and can help you avoid paying out of pocket if the expenses are over your limits.

Homeowners Insurance

There’s a lot of different factors that determine what type of home insurance policy you’ll need. 

Let’s start with the basics. The first type of policy is called a Guaranteed Replacement Cost Policy. Your homeowners insurance must protect the physical structure of the property.  With this type of policy, the insurance company will pay in full to replace your home in the case of a total loss. 

Now, in order to get this, you must get an accurate estimate of what it would cost to rebuild your home. Remember, don’t include the land value as the land wouldn’t be replaced. If the guaranteed replacement cost of your home is $200,000, $100,000 would be added to cover the contents of the home.

Another home insurance policy type you should get is homeowner’s liability. This coverage type will protect you in the event that someone is injured on your property and files a lawsuit against you for the accident. In the event that this would happen (hopefully not), we recommend carrying at least 

Your homeowners insurance policy should also include what’s called a “contents coverage.” This policy includes everything inside your home that is not affixed to the physical structure of the home. You’re allowed to do a detailed inventory of the contents of your home, the insurance company will assign an estimated value to those contents. 

Last but not least, your home insurance policy should include a provision that adjusts coverage levels based on inflation. This is a smart investment. Here’s the thing, property values tend to rise over time, but so do the costs of materials and labor that are required to rebuild the home.

Renters Insurance

Renters insurance covers your property in the event it is damaged or stolen. Most people don’t realize how important renters insurance is. For example, if your apartment burned to the ground, your landlord’s insurance won’t cover your personal belongings. Since renters insurance is quite affordable, you should certainly consider getting covered.

Renters insurance is less complex than homeowners insurance because the only concern is the contents of your home. You don’t have to worry about walls, ceilings, the exterior of the building or anything else that has to do with the physical structure of the property. Due to this,  you need a lot less renters insurance than if you are a homeowner and need homeowners insurance.

Calculating how much insurance you need for renters coverage is simple. All you have to do is create a per room estimate, you can make adjustments for certain high-cost items. For example, if you live in a eight room home, you can assign $5,000 per room, for a total of $40,000. If you have expensive items like computers and jewelry, you can add them on as needed. 

Since renters insurance is inexpensive. you can get good coverage for a small investment. However, you can just say “I own this.” You have to do a full accounting, make sure you take photos of everything you have and document those purchases. If you have receipts, keep those too. If you don’t have proof, you may not get pain in full for those items.

Learn more about Colorado Renters Insurance

Pet Insurance

Pet insurance works similarly to health insurance for humans. This insurance coverage is usually limited to dogs and cats. This is cause dogs and cats are the most common pets and there’s a lot of treatment options out there for these two specific pets.

While health insurance for humans can be a lot of money, pets are usually cheaper. Even so, a major operation on your cat or dog can cost a lot of money if you don’t have pet insurance for them. 

We recommend getting as much pet insurance coverage possible. Here’s the thing, some people view their pets as family and will do everything in their power to save them if something would go wrong. Others may not be so emotionally involved and there’s no right or wrong answer here. It’s just to give an estimate on pet insurance.