William Lako: When the unexpected happens, insurance can help protect what you’ve built

About $2,026 every month — that's what a typical family of four, with two adult homeowners, two children ages 0-14, and a pet, spends on insurance based on national averages, including term life insurance for both adults. With the average monthly principal and interest payment on a 30-year fixed home loan in the U.S. ranging from $2,715 to $2,866 in 2024-25, insurance has become one of the largest household budget categories.

Empower, a leading provider of workplace solutions and wealth management, found 68% of people are willing to pay more for services that help them achieve financial security. Insurance is meant to protect against low-probability, high-impact events where absorbing the cost of a catastrophic loss could cause lasting — potentially irreversible — damage to an individual's or family's financial future. Insurance policies transfer that risk to the insurance company.

So, what insurance policies do you need? Not surprisingly, it depends on your situation.

Most states, including Georgia, require continuous liability coverage for all registered vehicles, even when they are not driven. While comprehensive and collision coverage are optional, lenders usually require full coverage until the auto loan is paid off.

Mortgage lenders require homeowners insurance to protect the home and personal belongings, while renters insurance is often required by apartment complexes and landlords to cover personal property and liability. In states like California and Florida, additional policies may be necessary to insure against hazards — such as wildfires or hurricanes — not covered by standard policies.

Health insurance helps mitigate the astronomical costs associated with medical emergencies, hospital stays, surgeries, or prolonged illnesses. While a handful of states mandate health insurance, there is no federal requirement. Unfortunately, medical bills can reach hundreds of thousands of dollars, and absorbing those costs could permanently alter your financial trajectory. Financially speaking, health insurance is most often a must.

While life, disability and long-term care insurance are not required, your family and financial situation may warrant coverage. Life insurance is a tool to replace income when an unexpected death would fundamentally change a family's financial future. You are paying for the peace of mind your family and heirs are taken care of should the worst happen. Disability insurance helps protect your ability to earn and provide for your family, because a prolonged injury or illness can often be a greater financial strain than a premature death. Without long-term care insurance in place, long-term care costs can be substantial and have the potential to drain retirement savings and limit the legacy you hope to leave.

Insurance coverage can be complicated, as policies may include various features or riders designed to tailor coverage to your specific needs and risk tolerance. Additionally, many other types of policies, such as personal liability, critical illness, travel, or medical evacuation insurance, can also play a meaningful role in preserving wealth. We all buy insurance in the hopes that we never need it, but should the worst happen, insurance can help safeguard your long-term financial stability when it matters most.