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Have you noticed how everyone seems to be offering insurance these days? Whether it's a washing machine, your mortgage, a credit card, or even the telephone line to your house, service industries and retailers alike all are pushing their own particular insurance policy to protect us from whatever disaster is lurking in the future.
The reality is that most of us really don't need all that insurance. Here's a sampling of several insurance offers I recently turned down or cancelled because they were totally unnecessary.
Service warranty.
When I bought a $15 box fan this summer, the store clerk tried to sell us a $25 warranty plan to protect us from breakage. We refused the warranty for two reasons: first, because it didn't make financial sense and second, the item already came with an automatic one-year warranty. If the fan turned out to be defective, any breakdown would most likely happen in that first year while it still under warranty.
Service warranties such as these are high cost insurance plans that rarely get used especially if you buy a quality product to begin with. Most consumers would be money ahead by skipping the insurance and stashing the savings into a savings account.
Comprehensive car insurance.
Comprehensive insurance covers damages to your car in case of an accident and is optional once the car is paid off. Since our cars are pretty old anyway, we cancelled the comprehensive on all our vehicles this year for a savings of $58 a month.
Utility line insurance.
Both my water and telephone company offer policies to cover the cost of repairs between my house and the street in case of failure. Since our water line and the phone lines were replaced some 15 years ago during a remodel, the odds are high that we'll never use this coverage. The same goes for anyone living in a home that's relatively new.
Credit card theft insurance.
When one of my friends told me she was paying $4 a month for credit card theft insurance, I just about choked. Federal law already limits our liability to $50 in case of theft. And theft connected with debit cards and stolen checks many already be covered under your homeowners or renter insurance policy. Our policy provides $10,000 of protection in case of stolen checks or a debit card which is more than enough coverage for our family.
When it comes to watching costs, the key to insurance savings is to avoid buying insurance you don't need. And for the policies you do need? You'll save more money with a comprehensive insurance policy purchased from a reputable insurance provider instead of buying a bunch of little policies from everyone else.
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