If you’re like me, you struggle with the decision to purchase the extended warranty on electronic items, or travel insurance for that beach vacation. I have to admit that even though I struggle, I have always opted out of both of these offers. Some people suggest you buy them and others say they’re not worth it. There’s never a perfect answer for everyone, but I tend to go with the majority opinion and that seems to be that a lot of these “insurance” offers are a waste of money.
Which ones are a waste of money, you ask? I recently read an article entitled “8 Types of Protection Not Worth Paying For” and it outlined, as promised, 8 things not to waste your money on. Since I don’t like to waste money, I read through the whole article. A few were no surprise to me (see extended warranties and travel insurance above) but some I’d never heard of and some were surprising.
A couple of the money-wasters were product based: cell phone insurance and extended warranties. I’d never even heard of cell phone insurance, but apparently it’s not worth the money due to exclusions and a deductible you might have to pay for each repair. This is kind of the same theory with extended warranties, not all repairs are covered and you may have to pay to ship your item to the repair site (and we all know how much postage can be these days).
Travel insurance and rental car insurance kind of go hand in hand. I never buy travel insurance because I know that it only covers certain events. One of the things usually not covered is the cost of your trip if you have to cancel because of health or weather. These are the only 2 things that would prevent me from taking my much needed vacation, so I already know it’s not worth it. When you get to your destination and rent a car, the agent always offers to sell you the insurance. So far I have said no each and every time, and it’s nice to get confirmation that I’m making the right decision. Apparently many of us are covered by either our own car insurance, or by the credit card company we use to pay for the car, so more insurance isn’t needed. Of course, you should check these before you go, just to make sure.
There are insurance premiums out there that many of us can’t afford (medical, car, home), but there are also a lot that we can avoid. Before you sign up, read the fine print and find out if it’s really necessary. Sometimes it may be a matter of whether or not you’re willing to roll the dice and take the chance that nothing will go wrong.
Submitted by: Kerry Hammond, Esq. Bankruptcy Attorney