What are some types of insurance to avoid?
Insurance is a necessary expense in today’s world, but there are some types of insurance that you should avoid. These policies are often overpriced, unnecessary, or provide little benefit in return for the premiums paid. In this article, we will discuss 15 insurance policies that you don’t need.
1. Private Mortgage Insurance (PMI) 
PMI is a type of insurance that protects the lender in case the borrower defaults on their mortgage. It is required for borrowers who put less than 20% down on their home. However, if you can afford to put down 20% or more, you can avoid PMI and save thousands of dollars in premiums over the life of your mortgage.
2. Extended Warranties 
Extended warranties are often offered for electronics, appliances, and other big-ticket items. However, these warranties are often overpriced and provide little benefit. Many products come with a manufacturer’s warranty that covers defects and malfunctions, making an extended warranty unnecessary.
3. Automobile Collision Insurance 
Collision insurance is designed to cover the cost of repairing or replacing your car if it is damaged in an accident. However, if you have an older car that is not worth much, collision insurance may not be worth the cost. In some cases, the cost of the insurance premiums may exceed the value of the car.
4. Rental Car Insurance 
When renting a car, the rental company will often offer insurance coverage. However, if you have car insurance, your policy may already cover rental cars. Check with your insurance provider before purchasing rental car insurance to avoid paying for coverage you don’t need.
5. Car Rental Damage Insurance
Car rental damage insurance is another type of coverage offered by rental car companies. This insurance covers damage to the rental car, but it is often expensive and may not be necessary if you have car insurance that covers rental cars.
6. Flight Insurance 
Flight insurance is designed to cover the cost of lost luggage, flight cancellations, and other travel-related issues. However, many of these issues are already covered by your credit card or travel insurance policy. Check with your credit card company or travel insurance provider before purchasing flight insurance.
7. Water Line Coverage
Water line coverage is a type of insurance that covers damage to your home’s water line. While this coverage may seem like a good idea, it is often unnecessary. Most homeowners insurance policies cover water damage caused by a burst pipe or other issues, making water line coverage redundant.
8. Life Insurance for Children 
Life insurance for children is often marketed as a way to protect your child’s future. However, the reality is that the chances of a child passing away are slim, making this type of insurance unnecessary. Instead, focus on purchasing life insurance for yourself and other adult family members.
9. Identity Theft Insurance 
Identity theft insurance is designed to cover the costs associated with identity theft, such as legal fees and lost wages. However, many credit card companies and banks offer identity theft protection for free or at a low cost. Check with your bank or credit card company before purchasing identity theft insurance.
10. Pet Insurance 
Pet insurance is designed to cover the cost of veterinary care for your pets. While this coverage may seem like a good idea, it is often expensive and may not be worth the cost. Instead, consider setting aside money each month for veterinary expenses.
11. Accidental Death Insurance
Accidental death insurance is designed to pay out in the event of accidental death. However, many life insurance policies already cover accidental death, making this type of insurance unnecessary. Instead, focus on purchasing a comprehensive life insurance policy that covers all causes of death.
12. Cancer Insurance 
Cancer insurance is designed to cover the cost of cancer treatment. However, most health insurance policies already cover cancer treatment, making this type of insurance unnecessary. Instead, focus on purchasing a comprehensive health insurance policy that covers all medical issues.
13. Flood Insurance
Flood insurance is designed to cover damage caused by floods. However, many homeowners insurance policies do not cover flood damage, making flood insurance necessary in some areas. Check with your insurance provider to determine if flood insurance is necessary for your home.
14. Dental Insurance
Dental insurance is designed to cover the cost of dental care. However, many dental procedures are not covered by insurance, making dental insurance unnecessary. Instead, consider setting aside money each month for dental expenses.
15. Disability Insurance
Disability insurance is designed to cover the cost of lost wages in the event of a disability. However, many employers offer disability insurance as part of their benefits package. Check with your employer before purchasing disability insurance to avoid paying for coverage you don’t need.
In conclusion, there are many types of insurance that you should avoid. By understanding which policies are unnecessary or overpriced, you can save money and ensure that you are only paying for the coverage you need. Before purchasing any insurance policy, be sure to research your options and compare prices to find the best coverage at the best price.
