Insurance Breakdown: Which Type Do I Need?

It would extremely rare to meet a person who needs every single kind of insurance policy under the sun. However, when you look at the fact that over 6.8 million homes are underinsured, it’s possible to be too frugal at the same time.

So, how do you know where to dump your cash? How do you know which kind of insurance policy you might need? Do you need for-profit vs. nonprofit insurance? The following post is here to guide you through a potential insurance minefield, so you can seek out the correct policy for your needs.

Buildings insurance | Legal requirement: Yes

Buildings insurance is required by law if you own your home. In fact, you may not even be able to get a mortgage if you don’t have it. Most lenders will insist you take out a policy.

It’s important to not confuse buildings insurance with contents insurance. They’re different things entirely. Information on contents insurance is common, from sites like, and it’s important not to get confused.

Just think of it like this; buildings insurance is for the building, contents is for the stuff in the building.

Life insurance | Legal requirement: No

While it isn’t technically required by law, it might as well be. Life insurance is utterly critical to the financial stability of any household. It helps you cope with debt and mortgage costs in the event of death.

Life insurance sometimes comes as part of a job benefits package, so enquire with your employer before going any further. If they don’t supply it, then consider using a site like to look at the various offers.

Pet insurance | Legal requirement: No

With pet insurance, you can take care of Mr. Fluffy the rabbit in every situation that may befall him. While pet insurance doesn’t cover any annual jabs and neutering, it does cover your pet in the event it falls ill.

There are a few things to consider here. One, does your pet roam outside? Certain animals, like cats, that are frequently outside your home are at greater risk of harm. If you have a house cat or a house pet, then insurance will be less of a requirement.

Secondly, how old is your pet? If you’ve just bought a kitten or a puppy, then they have a long life ahead of them. If your pet is older and they have few years left, then insurance is all but useless.

Car insurance | Legal requirement: Yes

If you drive without car insurance, you can be removed from driving altogether and even face a prison spell. It’s really not worth it. Car insurance covers you in the event of any damage being inflicted upon your vehicle, as well as personal injury claims.

You can get third party, or comprehensive. Third party covers the other passengers in your car and also covers damage to other vehicles and property. However, if your car is stolen or is damaged, you need to cover those costs yourself.

Comprehensive, as the name implies, covers you from all angles. Obviously, it’s the more expensive of the two, but is worth it for peace of mind.


Like most things in life, insurance brings with it a lot of choice. Choice can be daunting, but ultimately, you have a wealth of information at your side. Time to start fully controlling your own money! I hope this post was useful.

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