Protect What Matters in the Real World
Navigate coverage to match low income and high stakes
When money’s tight, insurance might not be top of mind — but it should be. Coverage for sudden emergencies helps protect everyone’s financial security.
As Lending Club found in 2024, nearly 60 percent of Americans live paycheck to paycheck. Most couldn’t afford a major surprise such as a car wreck, emergency-room bill or stolen laptop.
That is where insurance comes in — not a luxury, but protection for what people work hard to build.
Insurance Helps You Pick Up the Pieces After Disaster Hits
Shannon Martin, licensed insurance agent and content writer for Bankrate, has learned from personal and professional experience the value of protection. As she explained with financial experts at Experian, a global information services company, being properly insured is a matter of quality not quantity.
Insurance matters because one in four Americans would struggle to cover an unexpected $1,000 expense, according to Bankrate in 2024. Insurance is not just a safety net but a foundation. It protects income, assets and goals when life throws a curveball.
Insurance acts as the defense in a financial playbook. A person could budget, invest and save. Then, without insurance, one accident or illness could wipe it all out. Financial planning is building wealth and guarding it.
“Think of insurance as your financial seatbelt,” Martin said. “It helps protect your future and current assets from surprise potholes like car accidents, medical bills or damage to your home. Without it, one unexpected event could derail years of savings and smart money moves.”
Low Income, High Stakes
Having a lot of money is not a requirement for needing insurance. Start by asking: What would wreck me financially if it happened? A car accident? ER visit? Lost phone or laptop? That is where coverage counts.
Playing the long game? Got goals — moving out, building credit, starting a business? Insurance helps protect what a person is building now so that it is still there later. Protection plans should grow with people.
Martin often asks questions like these to help people think through their needs:
Own your home and car outright?
Can you afford to pay for liability claims and damage out-of-pocket?
Do you have a 401k, investments or just like keeping what’s left of your paycheck after taxes?
Insurance Gives Peace of Mind No Matter Your Business Size
“Auto and home insurance help protect your current and future earnings,” she said.
“Think of where you are now and what your life may look like in the future,” Martin said. “If you have a mortgage or a car loan, it’s easy to understand that you need auto and home insurance. But who relies on you to pay for these things? If anyone does, you need life insurance.”
Experian states, when assessing insurance needs, start with lifestyle such as health and travel, assets like home, renter or auto, and goals, including family and retirement.
Many factors can affect the cost of insurance premiums, making it imperative to manage those costs effectively.
Assorted Cost Factors
Premiums can feel like a mystery, but here is the deal: Age, location, credit, coverage amount and even a person’s job can affect the cost. For example, drivers under 25 pay more just because of stats, which the National Association of Insurance Commissioners reported in 2023.
To lower costs, buy only what you need. If you’ve got a savings cushion, raise your deductible. Ask about good-driver, student and bundling discounts. Better credit scores also help. Such small moves lead to big savings.
Buy or Rent? Start with the Budget
“Your driving record and experience are the strongest insurance rating factors,” Martin said. “But to be honest, everything impacts your auto rates, for better or worse. Keeping a clean driving record and good credit history is a great way to keep rates low.
“Of course, you aren’t perfect, and neither are the other drivers around you,” she said. “Even if you are incident-free, an increase in accidents or thefts in your area impacts your rates. Another driver having an incident on your policy will increase your rates.”
Experian cites things that can affect insurance premiums: Claim or loss history, your location, age and credit, plus what assets the person wants to protect. Manage credit well, understand coverage needs and weigh the risk and rewards before filing claims.
Managing costs also start with smart shopping. Experian’s Insurance Marketplace can help anyone compare and save with confidence.
Covered or Not?
When selecting an insurance policy, rather than pick the cheapest one, choose the coverage that works when needed. Take into account what is and what is not covered. Then there are deductibles, monthly cost, payout limits and reviews of how claims are handled. Fine print matters.
For example, a cheap health plan with a $7,000 deductible might not help if the insured cannot afford to use it. Perhaps renters insurance does not cover theft, which is bad if a laptop is gone. Match the policy to real life.
“Cheap is only good — until it’s not,” Martin said. “Then you end up paying more or getting less.
“Auto insurance isn’t one size fits all,” she said. “Find a carrier that suits your needs and budget — or as best as they can with rates as high as they are. If you are a new driver, look for a carrier specializing in rates for young drivers.”
Have a financial first-aid kit — and use it
There is a direct line between responsibility and affordable insurance.
“Do you view the highway as your own demolition derby? Or have a credit score as low as your chances of winning the lottery?” Martin said. “Then a non-standard carrier may be a better fit for you.”
Experian explains it is vital to understand the limits on coverage. Be sure any high-value assets are included. Always keep copies of insurance policies at home.
Keys to the Policies
Be aware of the key components of an insurance policy and what types of coverage an individual might need:
Premium: what you pay
Deductible: what you pay before insurance kicks in
Coverage limit: maximum insurers will pay
Exclusions: what is not covered
Always read these like your money depends on it — because it does.
Polish Finances to a Sparkling Finish
Focus on the coverage you actually need such as health, even just basic; auto, if you drive; renters, which is cheap and protects stuff; and life, if someone depends on your income. So, start small, protect the essentials and build from there.
“What matters most is the limits of coverage and what isn’t there,” Martin said. “Flood is not covered on a home insurance policy 99.9 percent of the time. Windstorms and wildfires might also be excluded. Ask your agent what is missing to know what you need most.
“The most essential component of a home insurance policy is one that provides coverage where you would otherwise have a gap,” she said.
That led her to the HO-3, known as a “special form” policy.
“Most HO-3 policies come with the same coverage types: dwelling, other structures, personal property, loss of use, liability and medical payments,” Martin said. “But do you have high-end jewelry, art, furs or collectibles? Then you need an extra endorsement for the right coverage.”
Annual Check-Ins
While not obsessing over insurance, check policies at least once a year or anytime life changes. Needs change even if a policy does not. Review policies if you move, get a new job, buy a car, have a kid, start freelancing or lose coverage such as aging off a parent’s plan.
New life stages bring new risks. Make sure your coverage keeps pace.
“With how quickly insurers are limiting and removing coverage in high-risk areas, check your policy every year and anytime you make a change,” Martin said.
“Any major — and sometimes minor — life event could impact your policy in surprising ways,” she said. “Have you gotten married, divorced, moved, gotten a new job or had a baby? These changes may impact your rates or require more coverage.”
Finances Look Clear After a Thorough Brush and Polish
Consumers can save money on insurance premiums without sacrificing coverage. Try to bundle policies such as auto and renters. Raise deductibles only if there are plenty of savings to tap into. Use employer benefits if offered. Ask about discounts such as student, low mileage and autopay.
Be sure to shop around. Rates can vary a lot for the same coverage. Use comparison tools, call agents, and don’t auto-renew without checking. Loyalty is cool, but not if it costs you.
“Remove coverage you don’t need,” Martin said. “If you have two cars, do you need rental reimbursement? Will your rewards credit card cover towing? These are easy ways to save money without upping your risk.
“Nothing beats having a good driving record and a claims-free home insurance history to keep rates low,” she said. “But, accidents happen, and that is why insurance exists.”
Regular Upkeep for Savings
Take extra steps to preserve items for years to come.
“Prevention and maintenance can save you money in the long run on auto and home insurance,” Martin said. “A well-maintained home is less susceptible to minor damage. A well-kept car is less likely to break down on the road and cause an accident.”
Ask Experian’s blog compiles many ways to save money on insurance premiums. Shopping for insurance can be a headache. Experian does the heavy lifting by comparing top options in one place to find coverage that fits — fast.
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When starting out, people typically make insurance mistakes. They go with the cheapest plan, skip reading the fine print, forget to update coverage after life changes and assume they are “too young” to need it. Each of these can cost consumers way more down the line.
Avoid rookie mistakes by comparing at least two to three quotes, knowing what policies do not cover, asking questions of agents — who work for clients — and reviewing yearly. Insurance is part of adulting but does not have to be confusing.
“Insurance is not exciting, but shop around,” Martin said. “Don’t take the first quote you get. For auto, think twice about who you let drive your car. You might be stuck with an expensive decision for years.”
Assess for Today and Tomorrow
People can take actionable steps today to ensure they are properly insured for both their current and future needs. List what you cannot afford to lose such as health, car, income and stuff. Check if already covered through job, parents or school. Fill the gaps, starting small, if needed.
Then review yearly, set reminders, ask for help from agents, human resources and even Reddit. As income grows, upgrade coverage. Insurance is not “set it and forget it” but part of everyone’s financial hustle.
Insurance Helps You Pick Up the Pieces After Disaster Hits
“Start small and get quotes early,” Martin said. “Even if you can’t afford to add an umbrella policy or a flood policy, understanding how much they may cost puts it in perspective and makes insurance actionable.
“Be proactive,” she said. “Before you remodel your kitchen, have you taken care of all the extreme weather mitigation projects to protect your home from weather damage? If you have a child, plan for the teen-driver rate hike years in advance.”
Martin drew from her experience and everyday practice.
“I have three kids, 8, 6 and 3,” she said. “We practice safe driving with their power wheels in the backyard. We talk about good grades being a condition of earning a driver’s license. It’s never too early.”
Experian cautions against getting comfortable renewing policies year after year. Get curious. Assess current needs and costs, and get multiple quotes.
Risk Before Price
If just starting out with insurance, there is one thing to remember: Buy for the risk, not the price. The cheapest policy will not help if it does not cover actual needs.
Rather than having to know everything, just enough to ask the right questions. Start with what’s covered, what’s not and what the worst-case scenario looks like. Overall, would this policy help?
Confidence comes from curiosity. Ask, compare and protect.
Good Plans Give People Hope in the Darkest Times
“A good agent will answer questions, a bad agent will rush you off the phone,” Martin said. “If you don’t understand something, ask again. ‘There’s no such thing as a stupid question’ has never applied more than in the insurance industry.
“If you think you need a certain coverage but you are not sure if you want to pay for it, add it,” she said. “You can usually remove coverage anytime — but you can’t go back and add it after a loss.”
Getting properly insured is not about fear but protecting what you’re building. Start with what matters most, ask questions and let your coverage grow with you. Your future self will thank you.