Insurance plays a vital role in providing financial protection against unexpected losses and events. With dozens of insurance types available, most Americans rely on a handful of common policies to secure their assets and peace of mind. Determining the most used insurance in the US requires analyzing popular coverage types that protect people’s lives, health, homes, vehicles, incomes, and more. By understanding the most widely held insurance policies, consumers can evaluate if their protection plans align with broader trends.
Types of Insurance
Life Insurance
Life insurance provides income replacement upon the insured’s death. The two main types include:
- Term life insurance – Provides coverage for a set period, usually 10 to 30 years. It pays out only if the insured dies within the term. Term life offers affordable pure death benefit protection.
- Whole life insurance – Provides lifetime coverage as long as premiums are paid. It has a cash value component that builds over time that the policyholder can borrow against. Whole life has higher premiums but accumulates cash value.
Health Insurance
Health insurance covers medical expenses incurred for injury and illness. The most common types are:
- Major medical – Comprehensive policies that include hospitalization, prescriptions, doctor visits, preventive care, maternity, and more. Deductibles typically apply.
- Short-term health – Temporary coverage lasting up to 12 months for people transitioning between major medical plans.
Homeowners Insurance
Homeowners insurance protects homeowners against damage and liabilities associated with their residence and possessions. It commonly covers:
- Dwelling – Covers the physical structure
- Other Structures – Covers detached buildings like garages
- Personal Property – Covers belongings inside home
- Loss of Use – Pays for housing costs during repairs
- Personal Liability – Covers injuries that occur on property
- Medical Payments – Pays medical bills for injuries to guests
Auto Insurance
Auto insurance covers vehicle-related liabilities and damages. The basic types are:
- Liability – Covers injury and property damage to others caused by the insured
- Collision – Covers damage to the policyholder’s car from a collision
- Comprehensive – Covers non-collision damage including weather, theft, vandalism
- Uninsured/Underinsured Motorist – Covers injuries caused by a driver with insufficient or no insurance
Most Used Insurance in the US
Now that we’ve reviewed common insurance types, which policies do Americans rely on most?
Health Insurance
Health insurance is the most used type of insurance in the US. The CDC reports that over 90% of Americans have some form of public or private health insurance. Employer-sponsored group health plans cover over half the population. Medicare insures adults 65 and older and those with disabilities while Medicaid provides coverage for eligible low-income families and individuals. The Affordable Care Act also expanded access to major medical insurance.
With healthcare costs continuing to climb, having comprehensive medical insurance provides vital financial safeguards. Most Americans view health insurance as an essential benefit and necessity.
Auto Insurance
Auto insurance is the second most common type of insurance held in America. All states require minimum liability auto insurance to cover injuries and accidents caused by the insured driver.
However, most drivers carry more extensive coverage beyond compulsory minimums. A 2021 Insurance Information Institute study found that 78% of drivers had collision coverage, 76% had comprehensive coverage, and 63% had MedPay.
Drivers rely on robust auto insurance to protect their vehicle assets and avoid burdensome out-of-pocket crash expenses.
Life Insurance
The life insurance ownership rate in the US is around 60% per 2021 data from Statista. Term life is the most popular type, covering 43% of policyholders.
Americans depend on life insurance to replace income lost when a breadwinner dies. Proceeds can pay for funeral costs, mortgage, debts, and daily bills when a loved one passes away unexpectedly.
While life insurance lags health and auto in terms of widespread use, it still qualifies as one of the leading insurance types that Americans depend on.
Other Notable Insurance Types
While health, auto, and life insurance are most common, several other policy types have high ownership rates:
- Homeowners insurance – Protects millions of homeowners from property losses. Nearly all mortgage lenders require home insurance.
- Renters insurance – Covers belongings and liability for renters. Uptake has grown with rising apartment living.
- Disability insurance – Replaces lost income when injury or illness prevents working. Ownership remains low but rising.
- Umbrella insurance – Extra liability coverage beyond home and auto insurance limits. Adoption rates increase with higher net worth.
Insurance Takeaways
- Health, auto, and life are the leading insurance policies held by Americans.
- Major medical and Medicare/Medicaid cover over 90% of the population.
- Auto insurance is mandatory and most carry collision and comprehensive.
- Term life provides affordable income replacement upon death.
- Homeowners, renters, disability, and umbrella fill out top coverage.
- Review protection plans to ensure adequate safeguards against key risks.
What is the most used insurance in the US?
Based on the analysis above, health insurance is the hands-down winner for the most used type of insurance in America. With over 90% of the population covered by some form of private or public health plan, medical insurance adoption dwarfs other leading policies like auto and life. Health insurance provides vital protections against financial hardship from surging medical bills. It covers services ranging from routine doctor visits to critical hospitalizations. With healthcare costs continuing to outpace inflation, comprehensive health coverage is essential for most households.
Frequently Asked Questions
How many types of insurance are there in USA?
There are over 30 distinct types of insurance available in the United States covering a wide range of needs including health, life, disability, home, auto, business, travel, and more niche offerings. The major categories are life, health, property & casualty, and specialty insurance.
What are the 5 most common types of insurance?
The 5 most common types of insurance in America are:
- Health insurance
- Auto insurance
- Life insurance
- Homeowners insurance
- Renters insurance
These core policies protect against risks that most people face related to their health, vehicles, homes, belongings, and income security.
What insurance do most households have?
Most American households have health insurance, auto insurance, and homeowners or renters insurance. These three policies help cover essential needs related to medical costs, vehicle damages, and home/belongings protections. Life insurance ownership also exceeds 50% of households according to research.
What percentage of Americans have life insurance?
According to 2021 data from Statista, approximately 60% of Americans have some type of life insurance. Term life is the most popular policy, held by 43% of individuals with life insurance. Permanent life insurance covers about 20% of policyholders. Life insurance uptake has declined over the decades as employee-sponsored plans have fallen.
Which insurance is best for family?
For families, the best insurance options are:
- Health insurance – Protects from medical costs of all family members
- Term life insurance – Replaces income if breadwinner dies
- Auto insurance – Necessary liability and collision/comprehensive
- Home or renters insurance – Safeguards home and possessions
- Disability insurance – Replaces income if injury prevents working
A combination of these policies provides robust financial protection for families against key risks. Adjust coverage as family situation changes over the years.
Summary
Insurance plays a critical role in America’s financial health. Health insurance leads as the most used policy, with over 90% of Americans covered. Auto and life insurance round out the top three most common protections. Home, renters, disability, and umbrella insurance also have high adoption rates. Take time to review your coverage in relation to broader trends. Ensure your plans align with the risks you face so you can secure your assets and peace of mind.
