Without the ability to see into the future, we often turn to insurance to protect ourselves from the unforeseen. Since we can’t predict our own mortality, we buy life insurance to protect our families’ financial well being. We can never know if the person ahead of us on the road is going to slam on their breaks suddenly, so we purchase auto insurance to cover repairs, and own health insurance to help pay the costs of treating any injuries. Who knows why a burglar would break into your home and not the 24 others that look exactly like it along your street, but thank goodness you have homeowner’s insurance… you get the idea. There are certain kinds of insurance almost everyone should have, such as those listed above, while other types of policies tend to be specific to certain regions or circumstances, and still other kinds of insurance really aren’t worth it for anyone — period. Here’s a list of 10 insurance policies you can feel OK about not buying, as they’re just not worth the money for what these policies ostensibly cover.
Extended Warranties
It seems that whether you’re buying a dishwasher or a BluRay player, the salesperson pushes for you to purchase an extended warranty. The fact is, most consumers never end up using these warranties. This is especially true if you make a big-ticket purchase from a reputable brand with a solid history of longevity. Don’t these people have any faith in what they’re selling?-
Rental Car Insurance
Almost everyone pays a little more for an auto insurance policy that covers the cost of car rentals (usually limited by a certain dollar amount per day and a maximum amount of days they’ll cover), Many insurers promote this as a sound benefit, just in case your car requires some repair work after an accident. Granted, the price of having rental care insurance on your auto policy is relatively low, but given how seldom you’re likely to rent a car, you’d save more money over the years to forgo this policy and simply pay the low rental car rate yourself should you find yourself in need of a quick replacement.
Children’s Life Insurance
You most likely own life insurance to provide for your children, heirs or other dependents in the event of your untimely death. Children, however, have no families they must protect financially, so it makes little sense to purchase this coverage for your kids. Some insurers will argue that by starting a life policy for your children now, they can’t be denied coverage in the future if, for example, it was discovered they had a chronic illness. This is largely a waste of money, since statistically, most children will reach adulthood in good health. A more productive investment in your children’s’ future would be to use that money to fund an individual retirement account (IRA) or an education savings vehicles, such as a 529 college savings plan.
Flight Insurance
There is absolutely no need for you to purchase a flight insurance policy. No matter how much terrifying footage of airplane accidents you may have seen in your lifetime, your chances of being killed in a flight accident is statistically infinitesimal. Even beyond the rarity of these events, however, is that should the worst happen, your life insurance policy will cover this type of tragedy. Furthermore, it’s not uncommon for survivors of airline accidents to receive either settlement or court-ordered recompense through class-action litigation.
That concludes Part I of this article series on kinds of insurance you should avoid purchasing. Check back next week for the conclusion of the article, when we’ll look into the merit (or lack there of, as is the case) of six more insurance policies that aren’t worth your time or money.
