1) Car Rental Insurance
What Is It?
Car rental agencies usually try to tie you up with an insurance package along with the car. Insurances can come in different varieties. Collision damage (CDW and SCDW) and theft protection (TP) amongst the more common ones.
What Does It Do?
In the event of a car accident or car theft, the insurance company will cover the damages incurred in accordance to the coverage policy.
Why You Don’t Need It?
While car rental insurance might seem to be a worry free ticket to carefree driving indulgence, think again. While it’s true you do get covered for collision damage and car theft, the renter is still liable to bear the excess fee that comes with it.
What is this excess fee you ask? Well, in a nutshell, its money you will have to fork out despite the insurance coverage. In short, you’re basically splitting the bill with the insurance company.
Also, if the renter is found to be negligent in the event of an accident, the renter still has to foot the entire bill even after purchasing car rental insurance.
The only scenario you can benefit from this is if you are involved in some major accident that isn’t your fault. Or if you are unlucky enough to have your car stolen in that period of rental. Our advice? Save your money and splurge it on something else.
2) Flight Insurance
What Is It?
A form of travel insurance that indemnifies losses related to flights.
What Does It Do?
Flight insurance generally covers death and dismemberment during your flight, but most flight insurances also include protection for travel inconveniences such as flight delay or cancellation, baggage delay or loss and loss of travel documents.
Why You Don’t Need It?
The main reason you don’t need a flight insurance is that the losses are probably included in your life insurance policy already. So even if you purchase flight insurances, you won’t be able to claim double in portion as it violates the principle of indemnification. Furthermore, flying in a commercial plane remains the safest form of transport with the death risk being one 45 million flights based on passengers in the United States.
If you are worried of loss of baggage and travel documents, you can always avoid this by taking them as hand carry. That’s even more practical than having to submit a claim during a loss.
3) Credit Card Insurance
What is it?
Credit card insurances covers damage related to the credit card holder.
What does it do?
i) Credit life insurance - Coverage to pay your credit card bill in the event you pass away.
ii)Credit disability insurance - Protects your credit rating by covering your monthly minimum payment if you are disabled.
iii) Involuntary unemployment credit insurance - When you’re unemployed, you are eligible for a minimum monthly payment.
Why you don’t need it?
i) It’s possible that you already have enough coverage in other substantial life and disability insurance policies.
ii) Accumulated interest can eventually make the monthly required payment larger.
iii) If you’re not employed, paying for coverage you do not use can be pointless.
It can be incredibly easy to obtain a credit card insurance. Sometimes just giving approval over the phone will land you in one of their policies. Cancelling them however can prove to be a challenge. Our advice? Be very wary of the tele-sales you get and practice extreme wisdom should you choose to get one.
4) Life Insurance For Child
What is it?
Child life insurance is a permanent life insurance that insures the life of a minor.
What does it cover?
Similar traits to ordinary life insurance but for kids of course.
Why You Don’t Need It?
The main objective of life insurance, in general, is to replace the loss of income. So if your child doesn’t fall under that category, then you probably don’t need it.
Conclusion
While we understand the importance of insurance but what's even more important is that you understand the reason behind buying a policy. It’s really a bad financial decision to spend on disadvantageous policies. Having said that, you still need to have your car, motorcycle or travel insurance. So, if you're looking for one, check out Loanstreet's insurance page to get an instant quote for FREE and purchase it right away, without going through an agent.
Also, take a look at our previous write up on what your insurance agents don’t tell you.
