The Ultimate Insurance Cheat Sheet for 2025

Let’s be honest. Insurance isn’t something most people enjoy thinking about.

Between the unfamiliar terms, long policy documents, and the fine print, it’s easy to feel overwhelmed or unsure if you’re even looking at the right coverage. With rising premiums and more options than ever, figuring it all out can feel especially frustrating.

That’s why we put together this insurance cheat sheet. Think of it as a practical, easy-to-use guide to insurance basics. It breaks down common types of insurance, explains what they typically cover, including tips for getting the best deal.

Jump to the coverage you’re looking for, skim the key points, and use this checklist to stay on track.

You can also enter your ZIP code into our free comparison tool to start comparing rates now.

Life Insurance Protects Your Family’s Future

Life insurance keeps your spouse, partner, or children from facing financial hardships in case the worst should happen. This can protect your family from expensive funeral costs and provide for them for years after you’re gone.

It’s not just a salary that goes away with a loved one when they die. Its security. It’s knowing you can pay the bills every month while you contemplate a new normal.

Life insurance comes in two broad categories:

• Term Life Insurance: This plan covers a person for a fixed period of time, during which you pay a fixed annual or monthly premium. It pays a benefit if you die during this period.
• Whole Life Insurance: This plan has no set term and remains in effect as long as you pay your policy premiums. It’s more expensive but accumulates a cash value over time.

Your life insurance coverage needs will change over time.

If you’re young and just starting a family, you need more coverage. Your long-term insurance plan should enable your loved ones to cover expenses such as mortgages and other bills, and help them save for retirement or college without your income.

When you’re on a better financial footing later in life, you can use your life insurance policy as an investment vehicle, much like a 401(K). That’s because certain types of policies let you contribute pre-tax income and save when tax season rolls around.

After you’ve retired, you may no longer need long-term life insurance coverage, depending on how much you saved during your working years.

Top 10 Life Insurance Tips

• Get enough coverage. Your policy should pay out enough to cover 15 years’ worth of your income. That means if you earn $50,000 per year, get a policy with a $750,000 limit.
• Term life insurance is most likely enough. Choose whole life only if you’re looking for an investment vehicle or a way to reduce your taxes.
• Don’t let your coverage lapse. Missing a premium payment may make your policy void. That means you will need to obtain a new policy, which may result in a significant premium increase.
• Stop smoking. The best (albeit not easiest) way of lowering your premiums is to quit smoking.
• Buy it early. The younger you are when you purchase a policy, the lower the premium will be.
• Drive safe. Your driving record affects your premiums, so keeping a clean record saves you money.
• Pay annual premiums. Most insurers will cut you a discount if you pay your premiums on a yearly basis instead of monthly.
• Ask about price breaks. Some insurers will reduce your rates if you choose a higher coverage amount, such as moving from a $240,000 policy to a $250,000 policy.
• Be upfront about pre-existing conditions. Not stating these could lead to your policy being suspended down the road or prevent benefits from being paid to your beneficiaries.
• You can still get life insurance with a pre-existing condition. Simplified issue or guaranteed issue policies are less stringent in their underwriting.

Learn more: Types of Life Insurance

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Auto Insurance Protects Your Vehicle

There’s one simple reason you should get auto insurance: It’s the law. You legally can’t drive without the state-mandated minimum amount of insurance.

Auto insurance can also keep you from getting sued if you’re at fault in an accident, as well as pay for damages to your vehicle.

Everyone will need at least the state-mandated minimum in order to be on the road. If you’re strapped for cash, this may be all you should get for right now.

If you own a new car or a more expensive vehicle, you should consider additional coverage. Consider comprehensive, collision, or gap insurance. Motorcycle and classic car drivers should also consider specialty products that meet their needs.

The assumption is, if you drive, for example, a new Cadillac, you must have money, right? While that might be true, you don’t want the person you were in an accident with to automatically assume they hit the jackpot when you hit them!

Having a higher auto insurance policy might just protect you from a personal lawsuit above and beyond what your insurance policy would pay out, in the event you are in a serious accident.

Essential Auto Insurance Coverage Types

Different types of car insurance pay out in different situations.

• Liability Insurance: It doesn’t cover you or your vehicle; instead, it pays up to a certain limit for property damage and medical bills for other people involved in a wreck.
• Collision Insurance: Helps pay for repairs or replacement of your car if you’re responsible for an accident, regardless of who or what you collide with.
• Comprehensive Insurance: Covers your car if it’s damaged by events such as theft, vandalism, fire, hail, flooding, or falling objects.

The Top 10 Auto Insurance Tips

• Safer car, lower premiums. Many auto insurers will slash rates if your car has an alarm system, anti-lock brakes, or other features that make it harder to steal or safer in a wreck.
• Do a cost/benefit analysis. If you pay $1,000 per year for collision insurance on a $3,000 car, after three years, you’ll pay more than your car is worth.
• Get gap insurance for new cars. Some policies pay only the car’s current value after a wreck, rather than what you paid for it.
• Consider usage-based insurance. Letting your insurer track when and how you drive can lower your rates – as long as you’re a safe driver.
• For lower rates, raise your deductible. You pay a little more in case of an accident, but this can save you money over time.
• Get good grades for cheaper insurance. Some insurers offer discounts to good students who maintain a B average or higher.
• Life happens. Certain life events, like switching careers, getting married, and buying a house, can lower your premiums. Inform your insurer if any of these happen.
• Take a defensive driving course. These courses can do more than prevent your rates from increasing after a speeding ticket.
• Switch cars. Insurers charge higher rates for certain vehicles. If you want a lower rate, replace the sports car with a minivan.
• Drive less. Most insurers offer a low-mileage discount to drivers who cover 5,000 miles or fewer per year.

Health Insurance Keeps Your Body Healthy

Health insurance is probably the most important type of insurance you’ll ever get. Other types of insurance can cover your home, car, or trip, but your health is more valuable than all of those items put together.

Medical bills can be incredibly expensive. With health insurance, getting a major surgery or treatment for a serious illness won’t put you in dire financial straits.

It does not have to be a major medical illness or planned medical expenses due to a pregnancy.

Without a solid insurance plan, an unavoidable, middle-of-the-night health surprise would have cost her over $40,000. With insurance, she spent about $2,000 out of pocket.

How to Pick the Right Health Insurance Plan

This will vary widely and continue to change as healthcare laws and regulations evolve. For now, consider these options.

• Employer-Provided Health Insurance: This plan is often a good option if it’s available through your employer. Most of these plans are affordable and offer decent benefits.
• Bronze, Silver, Gold, and Platinum Health Insurance: These plans typically cover 60%-90% of most medical costs. Higher coverage levels mean higher premiums.
• Catastrophic Plans: Available only to those under 30. If you’re young, don’t go to the doctor often, and are in good health, this may be a decent option.

Read more: The Best States for Employer-Provided Health Insurance

What You Need to Know About Health Insurance

Health insurance terminology can make choosing a plan more daunting than it needs to be. Here’s how to speak your health plan’s language:

• Premiums: The amount you pay each month for health insurance.
• Deductibles: The insurance deductible is how much you have to pay before your health insurance kicks in.
• Copays: You pay this flat fee when you visit the doctor.
• Coinsurance: The percentage of the care charge you pay.
• In-network: These healthcare providers have contracts with your insurance company that provide plan members with discounted rates.
• Out-of-network: These providers don’t have contracts with your plan, so you pay more when you visit them.
• Enrollment Period: This is the critical time to enroll in plans through government or state healthcare exchanges.

The Top 10 Health Insurance Tips

• Different states, different enrollment periods. That means you can enroll in insurance outside the usual enrollment period.
• Watch your savings. Plans purchased on the healthcare exchange offer special tax subsidies, but they can be lost under certain conditions.
• Stay healthy. Preventative care is covered under most health insurance plans. Staying healthy with these services helps keep your premiums low.
• Report your income. Report any increase or decrease in your earnings to maximize savings or prepare for a larger bill.
• Consider a Health Savings Account. These let you contribute pre-tax income to a health savings account, meaning you can be better prepared for an unexpected doctor’s visit.
• Ask for outside help. Treatment for some conditions or diseases may incur charges beyond your health insurance coverage.
• Get your steps in. A few insurance plans offer discounts for using Fitbits or similar devices. Check if you qualify for these savings.
• Prescription discounts. If your plan doesn’t provide adequate prescription drug coverage, check whether the manufacturer of your medication offers these savings.
• Freelancer tax deductions. If you’re a freelancer, you can get a tax deduction for the cost of your health insurance deductible.
• Consider your options. If both you and your spouse qualify for employer-provided plans, check whether one of them makes better sense for your coverage needs.

Home Insurance Protects Your House

Next to health insurance, home insurance is one of the most important policies you can own. Home insurance coverage helps protect all that money from disappearing after a single bad accident.

A large palm tree can look healthy and stable, yet still pose a serious risk to a property. In one case, shifting roots caused cracks in a pool deck, surrounding concrete, and part of a home’s foundation.

The damage was unexpected, and the tree was later found to be one severe storm away from falling onto the house.

While exploring repair options, the homeowners learned that their policy did not cover damage caused by tree roots unless the tree actually fell and caused significant structural harm.

As a result, they were left paying out of pocket for tree removal, structural repairs, and preventative removal of another nearby tree that could have caused similar issues in the future.

This situation underscores the importance of carefully reviewing homeowners insurance coverage and considering additional protection for property-specific risks, rather than assuming all damage scenarios are automatically covered.

Check out: Home Insurance Rates

Essential Home Insurance Coverage Options

Most home insurance plans cover three basic areas:

• Dwelling Coverage: This plan protects the actual structure of the house.
• Contents Coverage: Covers your personal belongings inside the home.
• Personal Liability Coverage: This plan covers medical expenses for injuries sustained inside your home.

These types of coverage should be where your home insurance search starts, not where it ends.

Learn more: Is home insurance required?

Depending on your situation, you may need additional insurance to protect against floods, earthquakes, or other risks.

• Extended Replacement Coverage: Note that payouts are capped at 125% of your home’s insured value.
• Inflation Guard: This perk ensures your home’s insured value stays current with its current market value.

Some home insurance policies will only pay out the value of your home at the time it was appraised. That means a home insurance policy may not fully cover the cost of rebuilding or repairing your home if it lacks one of two essential coverages.

The Top 10 Home Insurance Tips

• Fix it yourself for lower premiums. If you can, repair items yourself or hire a contractor to fix damage under $1,000. Filing multiple claims can increase your premiums.
• Determine whether you need flood insurance. You’re legally required to get this if you live in a floodplain.
• Insure your valuables. If you have expensive art, jewelry, or antiques in your home, get a separate policy for these items.
• Get an independent walk-through. Ask a homebuilder to provide a quote for your home’s value to accurately determine how much insurance you need.
• Get replacement cost instead of actual cash value. Actual cash value covers the full cost of replacement for your items.
• Safety first. Installing smoke alarms or security systems will lower your premiums.
• Get ordinance or law insurance. If you plan to live in your home for a few decades, these will cover any required costs to bring your home into compliance with future building codes.
• Get external structures their own policies. Otherwise, your gazebos, detached garages, or sheds may not be covered under your home insurance policy.
• Bundle up. Many insurance plans will cut your premiums if you bundle your home and auto insurance together.
• Insurance for the sharing economy. Most plans won’t cover any damages resulting from renting your home out on Airbnb or a similar service.

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Travel Insurance Protects Your Trips

Vacations, cruises, and trips can cost thousands of dollars, and that money can disappear if you have to cancel them at the last minute.

More than that, you can rack up jaw-dropping hospital bills if your health insurance doesn’t cover medical care in a foreign country.

The right kind of travel insurance can help you avoid these worst-case scenarios.

Essential Travel Insurance Plans

Depending on the kind of trip you’re taking, consider one of these forms of travel insurance:

• Travel Medical Insurance: Covers medical treatment abroad.
• Evacuation Insurance: Covers transportation to the nearest hospital or back home in the event of a medical emergency.
• Cancellation Insurance: Covers the cost of your trip if you can’t travel.
• Package Travel Insurance: Combines all of the above coverage types into a single, easy plan.

What You Need to Know About Travel Insurance

Your travel insurance will only kick in under certain conditions, so make sure you read your policy closely. For instance, most cancellation insurance plans will only cover your trip if the following prevent you from going:

• Sudden business conflicts
• Changing your mind
• Delays in processing your visa or passport
• An illness or injury
• Weather-related issues

Some policies won’t protect you if your trip gets canceled due to an accident on the way to the airport, jury duty, or a fire or flood in your house. Make sure you do your research when picking out the right policy.

Read more: What to Do When You’re Denied Insurance Coverage

The Top 10 Travel Insurance Tips

• You may already be covered. Your credit card, health insurance, and car insurance may offer some of the same protections provided by travel insurance.
• Shop around. Don’t buy your policies directly from travel agents, as they may be selling the policy that yields the highest commission.
• Special insurance for adventurers. If you plan to scuba dive, ski, or skydive during your vacation, most basic plans won’t cover injuries from these activities.
• Use the Free Look Period. Every travel policy includes a 10-15-day Free Look Period, during which you can review, modify, or cancel your coverage as needed.
• Primary coverage. Look for travel insurance plans that act as primary coverage. They’ll kick in before your other forms of insurance and save you from out-of-pocket expenses.
• Make sure your carrier is covered. Not all airline carriers and tour operators are covered under travel insurance policies. Make sure yours is before buying a policy.
• Medicare doesn’t cover you overseas. If this is your primary health insurance, get travel medical coverage.
• You may not need baggage insurance. If you check your bags, they’re covered by the airline in most cases.
• When you need rental car insurance. During domestic trips, your regular car insurance will cover you. If you rent a car abroad, it may be covered by your travel insurance.
• Get it fast. Getting your travel insurance as soon as possible gives you the most time to cancel if you’re unable to travel.

Pet Insurance Protects Your Furry Friend

Medical bills for pets can now exceed $1,000. If you want to get your animal companions the best medical care possible, you’ll need pet insurance.

For most pet owners, pet insurance may seem unnecessary when their pet is healthy. However, it can help you avoid tapping your savings to cover a $1,000 veterinary bill if your pet is injured or becomes ill.

Insurance Company	Cats	Dogs
	$20	$40
	$30	$50
	$32	$53
	$29	$60
	$30	$50
	$32	$54
	$29	$50
	$25	$45
	$30	$55
	$25	$45

You want a plan that will cover injuries and illnesses. Don’t think about pet insurance as a way of defraying costs for routine trips to the vet – it’s for emergencies only.

Read more: 10 Best Pet Insurance Companies

What You Need to Know About Pet Insurance

Pet insurance doesn’t work like human health insurance. Instead of kicking in right when you pay your vet bill, you file a claim, and the insurance company reimburses you later.

The deductibles work differently as well, falling into one of three categories:

• Annual: The insurance pays out for the rest of the year once you’ve reached your deductible.
• Per Condition: Each condition has a deductible after which coverage begins.
• Per Visit: You must meet your deductible each time you take your pet in for treatment.

Learn more: Best Pet Insurance for Dogs

Top 10 Pet Insurance Tips

• Purebreds beware. Some pet insurers don’t cover diseases and conditions that are genetically linked to certain breeds of pets. Read your policy carefully.
• Pets can have pre-existing conditions, too. That may exempt them from coverage under pet insurance.
• Young pets are cheaper to insure. Your puppy or cat can get the best care if they swallow something harmful or injure themselves while playing.
• Don’t buy pet wellness coverage. This covers vaccines and routine veterinary visits. However, it usually costs more overall than the visits.
• Think about liability insurance. If you have a particularly rambunctious animal, this could protect you from paying out money as a result of a lawsuit.
• Watch out for waiting periods. Some plans delay their insurance coverage for a certain amount of time after you purchase a policy, which could put you at risk of high vet bills.
• Always choose the highest deductible you can afford. Pet insurance is for emergencies, so you want a high deductible and a low premium.
• Watch out for capped payouts. Some plans cap how much they’ll cover, which can lead to a nasty surprise when filing a claim.
• Create a pet emergency fund. If you can’t afford pet insurance, set aside whatever you can to pay for any unexpected pet medical bills.
• Get a multi-pet discount. Some insurers reduce your rates if you insure more than one animal through them.

Read more: 8 Questions to Ask When Considering Pet Insurance

Choosing the Right Type of Insurance

The right type of insurance depends on your needs, budget, and risk tolerance. What works for someonese may not be enough or may be more than necessary for you.

Taking the time to understand what each policy covers, and how much protection you actually need can help you avoid costly surprises down the road.

Explore: Best Insurance Comparison Sites

We’d love to know how many others out there have had similar experiences or perhaps similar experiences with very different outcomes!

Start comparing affordable insurance options by entering your ZIP code into our free quote comparison tool today.