The Good, The Bad, And The Insurance You Don't NeedYou can buy insurance for almost anything imaginable. Some are absolutely necessary, like health or auto insurance. Others may end up costing a lot and providing very little. Since most people like to keep the money they make, heres a look at three types of insurance you don't need:
1. Extended WarrantiesAn extended warranty is an offer by the retailer or manufacturer to cover repairs and damage to your recent purchase that lasts longer than the typical coverage. For example, if you have just purchased a new $1,000 laptop and the salesperson offered an extended warranty for two additional years for just $150the average consumer might see this as a great deal, considering the potential costs of something going wrong outside of the usual warranty. A standard warranty, however, comes with most products and lasts about a year. Places that offer an extended warranty are not doing it out of the kindness of their heart: Companies keep track of data relating to product failures and repairs. They know exactly how often your new appliance will break down over the next couple years, and are willing to bet on those odds by offering you an extended warranty. The percentage of people who end up needing the warranty is typically very low. Consumer Reports advises staying away from these warranties, because retailers who offer them pocket 50 percent of the price, products seldom break within the allowable period, and the average cost to repair is close to the cost of the warranty. This is a very profitable business for retailers and statistically unnecessary for consumers.
SEE ALSO: Do You Really Need Insurance?
2. Rental Car CoverageEvery time you rent a car, the customer service agent will push for you to purchase insurance, usually a loss or damage waiver or collision damage waiver that can add several dollars to the daily cost. Many drivers purchase it out of confusion and the desire to feel safe, especially if they are unprepared and a long line of customers stand waiting behind them. Generally, you are already covered under your existing auto policy or by the credit card used to make the purchase, and should therefore not purchase coverage offered by the rental company. Selling coverage is usually just a way for the rental place to make extra money, so buying it is unnecessary. Be prepared before you turn it down though. Always read the fine print first and dont assumeanything! Coverage and protection can change, there may be certain provisions you are not aware of or the credit card might cover losses, but not liability. Call your auto insurance provider or credit card company before you leave to clear up any confusion. If its a business trip, check with your companys travel policy. Many larger businesses provide coverage as a courtesy to employees.
SEE ALSO: Securing Your Car With Mercury