Q&A: Types of insurance you probably do not need

When it comes to insurance, “they” say that you can never have too much. Is this always true?

The chase for piece of mind and security always involves a variety of insurance coverage. Some types of insurance, however, offer coverage you probably don’t need.

Extended warranties

Also known as “service contracts,” this type of coverage involves promises to repair—or pay for repairs—of the products named. Extended warranties are available for autos, appliances, PCs, and electronic or digital products. However, since a manufacturer’s warranty is usually provided, you’re paying for double coverage for some period.

Separate policies when riders are available.

Buying separate insurance to cover things like boats, RVs, expensive art, or other assets offers protection, but at a high price. For example, if you have an RV, compare auto insurance quotes and see if you can combine car and RV insurance. It is possible that adding a rider could give the same protection as an individual policy but at much lower cost.

Mortgage life insurance

Mortgage life insurance quotes identify “decreasing term” insurance. Its value decreases as your mortgage balance declines. You may already have enough traditional life insurance coverage to protect your family and your mortgage.

Credit insurance

Credit insurance pays lenders, such as your credit card issuers when you cannot. This type of insurance is almost always available from lenders, but is usually unnecessary. You may already have sufficient life insurance or disability insurance to pay off your lender without adding insurance premiums that you don’t need.

Cancer insurance.

Although this may seem like wonderful coverage, like flight insurance, payouts are both rare and usually minimal. Classic health insurance is a better option since it covers all forms of injury and illness.

Be aware that the type of insurance coverage noted herein are legitimate and can be useful in specific circumstances. However, in many cases, these types of coverage are probably unnecessary if you have other standard coverage already in place.

Q&A: Need some advice on personal finance matters? If you have a question about or would like further explanation about a topic relevant to banking, credit cards, home loans, or insurance, please submit a question.

Posted in: Auto Insurance, Insurance, Life Insurance

Auto Insurance News: This article was published on 10-10-2011 at 9:15 am.

View comments