Over the years it seems like our culture has gotten nervous. We’re worriers, where everything we buy and everything we do carries with it some level of uncertainty and risk. As a result we do our best to shore up our lives with insurances, policies and guarantees, that give us a comfortable cushion to fall back on should the unthinkable or even the inconvenient happen.
While some of these insurances are wise and prudent to pay for, a lot of the smaller warranties and obscure coverage plans that are available are not necessary. As a general rule of thumb you should avoid these areas and save the money to pay for plans that cover things that actually matter.
Here are five such plans that one could argue, are a complete waste of your money.
Types of Insurance Not to Waste Money On
Cell Phone Replacement Insurance
Your cell phone plan is likely already expensive and adding to that in case you break your phone isn’t necessary. Phones can break, though it’s often cheaper to buy a used phone to get through until your contract is up than paying for the warranty. Even the stores themselves will usually have used phone for sale. If not, Amazon and EBay have plenty to go around.
Any “Extended” Warranties
If you buy a computer, TV, an appliance or any other product that offers an extended warranty, avoid wasting extra money on something you’ve already paid for. They’ll often give you the option of adding a warranty on to your purchase right before they finalize your sale. They put you on the spot making you feel like you’re making a life or death decision. Don’t fall for it. Even if what you’re buying does break, most retailers provide a 30 day money back guarantee along with the manufacturer’s warranty that’s usually good for one year. Even if your item does fail, a few aggravated phone calls can go a long way in getting it fixed or replaced for little or no cost.
Identity Theft Protection
Less than $100 per year seems like a small price to pay to protect your identity, though what you might not know is that a lot of home insurance policies include a form of identity theft protection. Also most banks will cover fraudulent use of your credit and debit cards and alert you or lock your card if they notice any suspicious activity.
Rental Car Insurance
This can be a bit of a calculated risk, but if you check with your auto insurance company they probably already have you covered on any liability here. Make sure you do your homework, but if you’re already covered, don’t let the rental car companies drive your daily rate up any more than it already is.
Credit Card Balance Insurance
This type of insurance is sold as something that will pay of your credit card bill if you can’t work for some reason. This is a waste on several levels. First, disability policies usually give you more than enough to take care of bills in the event that you can’t work for an extended period of time. Second, it’s really just another way for your credit card to start costing you even more than it already has. If you can’t simply avoid running up a massive credit card bill in the first place (which is the preferable solution), putting away money for an emergency fund is a more cost effective method of preparing for such an event.
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written by: Chantille Watson
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