There are plenty of insurance policies you DO need that are going to take a bite out of your budget. You can and should shop for cheap insurance quotes online to hold down costs, but you can also save money on insurance by NOT buying policies you don’t need. Only you can determine your actual needs based on your actual circumstances. We’re just saying think before you fork out your hard-earned cash for anything with a dubious return on investment.
High on the list of insurance you don’t need is the service contract (aka extended warranty) on appliances and electronics. In the first place, if you finance the purchase, these expensive policies can add hundreds of dollars to the cost of an item over the life of the loan. The extended warranty may give you peace of mind, but statistically speaking, you’ll probably be ready to replace that TV, vacuum, stereo or ionic dog brush long before you have cause to cash in on the service contract.
Do you really need flight insurance? Only if you have money to burn. Airline travel these days may be miserably uncomfortable but it’s still statistically safer than crossing the street. Besides, your life insurance policy most likely has you covered in the event of an accident.
Many utility providers, including water, cable and phone, now offer supplemental insurance coverage tacked onto your monthly bill to cover the cost to repair lines running into or in your home. The costs are generally low, but the odds of you ever using this insurance are probably even lower.
Credit card companies are so clever. When they aren’t jacking up your rate or canceling your card, they’re busy inventing new products like credit card insurance. They’ll generously make your credit card payment if you can’t for some reason (defined by their lawyers in the teeny tiny fine print). The monthly fee for this (typically around $10) may seem nominal, but unless you pay your balance each month, it accrues interest charges. And if you do pay your balance each month, you don’t need it anyway. You’re far better off to use that extra $10 to pay down your credit debt.
Credit card loss insurance is another revenue-raising product dreamed up by the card companies. Since you are only liable for $50 per lost or stolen card under federal law, even if you have a wallet full of plastic, this insurance is a waste of money.