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How To Avoid Unnecessary Insurance Coverage

How To Avoid Unnecessary Insurance Coverage

Some types of insurance are necessary for everyone either because they are required by law, like auto insurance coverage in most states, or by a company such as homeowner insurance because of the type of mortgage purchased, or because it's just smart like Life Insurance if starting or currently have a family. Most other types of insurance just prey on fear and uncertainty to sell consumers coverage they don't need or wouldn't want otherwise.

While not technically called insurance that's what it is when businesses try to sell consumers extended warranties. A well known and common rule of thumb is especially when it comes to electronics is that if it doesn't break within the first 15 to 30 days then it's probably not going to break any time soon. Even if it does break after the 30 day window, most manufacturers provide a minimum of a one year warranty for parts and labor. Why any business would try to sell a $30.00 extended warranty on $120 camera is beyond ridiculous. Never by extended warranties.

When traveling, there are a number of additional insurances pitched to consumers which are often completely unnecessary. Car Rental Insurance may be unnecessary if your current automobile insurance or credit card has rental insurance coverage or if that coverage can be added cheaply to your existing policy. Travel Insurance may not be necessary if you travel domestically and your current policy covers out of state medical treatment. And vacation insurance, depending on the cost, may not be necessary for the type of vacation you're taking.

Pet Health Insurance is a new invention because of the rising cost of medical treatment for our furry family friends but often is not worth the additional expense. High premiums and very limited coverage often make pet Health Insurance impractical and unnecessary. If your 15 year old pet gets cancer not only is it unrealistic to pay $20,000 in cancer drugs but many times pet Health Insurance doesn't even provide coverage for cancer treatments.

Identity theft insurance is also waste of money because common sense steps and a little bit of prevention can go a long way in protecting your identity and saving you money. Identity theft insurance also almost never does what you can already do yourself through free credit monitoring and the temporary freezing of accounts. $30.00 to freeze all three credit reporting agency records can prevent fraudulent accounts from being opened in your name. A healthy dose of common sense by not giving out personal information can also prevent most cases of identity theft.

Credit card insurance should be avoided at all costs. Not only does Federal law place a limit of $50 on any fraudulent purchases but often any outstanding debts would be adequately paid by a Life Insurance policy which would be less expensive and more appropriate if you have a family. If you have a family you should have a Life Insurance policy and with enough coverage debts like a mortgage, credit cards and other loans would be paid in full.

Insurance can be important and provide peace of mind in the event of life's unforeseen complications. Health, life, auto, homeowners and disability insurance are the types of coverage individuals and families should consider to adequately protect themselves and their finances. But most other warranties and insurances are unnecessary and expensive and best left alone.