10 Kinds of Insurance You Might Not Need

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Which car insurance, life insurance, and travel insurance policies are not needed? The list of policies one may not need will be different for everyone because of the difference in individual risk. For example, someone who does not own a home would not need to purchase a homeowners policy because there is no risk to them of losing their home.

That is an obvious example, but there are times when one's risk is minimal and suffering the consequences of the loss is a better risk than purchasing a policy.

Insurance You Might Not Need

Below is a list of insurance policies that most people would not need to purchase for various reasons (reasons are listed when applicable):

1. Comprehensive and Collision Coverage: Comprehensive and collision coverage on your car insurance might not be imperative for automobiles that have little or no value.

2. Maximum Personal Injury Protection Coverage (PIP): If you have a good health insurance policy, your injuries should be covered. If you prefer some protection, buy the minimum personal injury protection coverage plan.

3. Rental Car Insurance: If you have a current full coverage policy, check with your agent to see whether you're covered. Also, check with your credit card provider. Your credit card provider might offer coverage if you use the provider's credit card when renting a vehicle.

4. Mechanical Breakdown Insurance: If you currently own a new car or have a leased vehicle that is still under warranty, you don't need this insurance added to your car insurance policy.

5. Roadside Assistance: If you already belong to an automobile club like AAA, you don't need this insurance added to your car insurance policy.

6. Life Insurance: If you are single and have no dependents you will only want life insurance if you are using it as part of a long-term strategy. For example, buying whole life or universal life with values at a young age can save you money since you will build investments that you can borrow from more easily than a bank when the time comes to start a business or a family, and you can also benefit from a lower rate by locking in a policy while you are in good health and have no problem passing the life insurance medical exam. If you are only looking for term life insurance, find out if you are covered through your employer through their health benefits or other employee benefit packages. Beware, however, that if you leave your employer, you may find yourself without insurance. Sometimes it saves you more in the long term to pay less now than try and get life insurance later and spend way more due to age or medical issues.

7. Travel Insurance: If your current health insurance policy covers you abroad, you should find out what is covered and then decide if you need to take an extra policy. You may want coverage for lost luggage, but consider that your homeowner policy may cover your subject to your deductible. You may also want to consider any credit card benefits that you may have and contact your credit card company to find out if they offer travel insurance automatically when you purchase a ticket or travel using the credit card before you spend extra money.

If you are traveling for business purposes, a personal travel insurance policy would not cover you, you need to talk to your work about this coverage, so be careful if you are buying a plan to cover professional travel, you may be wasting your money.

If you are traveling for an extended period, but have basic coverage as part of your health insurance plan at work, consider contacting your health insurance provider and getting a top up on your insurance, this is much less expensive than purchasing a whole new policy. Take advantage of your employee benefits wherever you can.

In all cases, find out what is covered and what is not. For example, does your policy cover air ambulances? Is that a concern for you? Once you've explored your needs and options, decide if you want the extra coverage and if it is worth your investment.

8. Extended Warranties on Appliances: In the end, these can cost more than just buying a replacement appliance.

9. Insurance on Outstanding Credit Card Balances: This type of insurance can cost a lot, and there are a lot of loopholes to go through before any benefit is paid.

10. Credit Insurance and Mortgage Insurance: This is voluntary insurance on your mortgage. A typical life insurance policy would be a better option.

By avoiding the above policies, you will not reduce your risk, and you still may experience a loss in any or all of the above categories. You need to weigh the risk or use this insurance as part of a strategy to decide for yourself if, in your current situation, the coverage is worth the price of the insurance.