1) Car Rental Insurance
| Benefit | Drawback |
|---|---|
| Protection against major damage or theft. |
|
Car rental agencies usually try to tie you up with an insurance package along with the car. Insurance can come in different varieties. Collision damage (CDW and SCDW) and theft protection (TP) are among the more common ones.
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, it's 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
A form of travel insurance that indemnifies losses related to flights.
| Benefit | Drawback |
|---|---|
| Coverage for delays, cancellations, and accidents. |
|
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 insurance, 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 accident for every 1.26 million flights.
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
Credit card insurance covers damage related to the credit card holder.
| Benefit | Drawback |
|---|---|
|
Provides coverage for:
|
|
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
Child life insurance is a permanent life insurance that insures the life of a minor.
| Benefit | Drawback |
|---|---|
| Provides life coverage for children. |
Less relevant since children don’t generate income. |
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.
Choose the one that actually benefits you
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 article on what your insurance agents don’t tell you.
*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
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