• Many people adopt a "penny wise, pound foolish" mentality when it comes to buying insurance. When trying to lower expenses, some will drop or reduce needed coverage, gambling that they won't become seriously ill, suffer a car accident or fall victim to a fire or other catastrophe. But all it takes is one serious uncovered (or under-covered) incident to potentially wipe you out financially.
• Here are insurance policies no household should be without:
• Medical. This is the most critical - and unfortunately, the most expensive - coverage you need. When comparing plans, consider:
• Are your doctors in their provider networks? If not, can you afford out-of-network charges - or are you willing to find new doctors?
• Are your medications covered under the plan's drug formularies?
• Do they restrict specialized services you might need like maternity, mental health or weight reduction treatments?
• If you choose catastrophic coverage to lower premiums, can you afford the high deductible in case of an accident or major illness?
• Homeowner/renter. Faulty plumbing, theft and home-accident lawsuits are only a few catastrophes that could leave you without possessions or homeless. A few tips:
• "Actual cash value" coverage repairs or replaces belongings, minus the deductible and depreciation, whereas "replacement cost" coverage replaces items in today's dollars. Depreciation can significantly lower values, so replacement coverage is probably worth the extra expense.
• Jewelry, art, computers and luxury items usually require additional coverage.
• Review coverage periodically to adjust for inflation, home improvements, new possessions, change in marital/family status, etc.
• The market is competitive, so compare your rate with other insurance carriers. Get "apples to apples" quotes since policies may have varying provisions.

• Vehicle. You probably can't even get a driver's license without demonstrating proof of insurance. Consider these coverage options:

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