Insurance is an important aspect of protecting your assets and loved ones, but not all types of insurance are created equal. While some are essential, others may not necessarily be recommended. In fact, there are several types of insurance that may not be worth investing in at all. Below, we’ve outlined some of the types of insurance that are not recommended:
Private Mortgage Insurance: If you’re planning on buying a home, you may be required to pay for private mortgage insurance (PMI) if you put less than 20% down on your home. However, PMI is not recommended as it doesn’t protect you–it protects the lender in case you default on your loan.
Extended Warranties: Extended warranties are often pitched by salespeople as a way to protect your purchases, but they are typically not worth the extra cost. In most cases, the manufacturer’s warranty will cover any major issues with your product.
Automobile Collision Insurance: While it may seem like a good idea to have collision insurance in case of an accident, it’s actually not recommended if your car is older or has a low market value. In many cases, the cost of collision insurance may be higher than the actual value of your car.
Rental Car Insurance: Rental car insurance is typically not necessary as your personal auto insurance policy may cover you while driving a rental car. Additionally, some credit cards also offer rental car coverage.
Car Rental Damage Insurance: Similar to rental car insurance, car rental damage insurance is often unnecessary as it may be covered by your credit card or personal auto insurance policy. Be sure to check with your provider before renting a car.
Flight Insurance: Flight insurance is often offered when you purchase your plane ticket, but it’s typically not necessary. Most travel insurance policies will cover you in case of flight cancellations or delays.
Water Line Coverage: While it may seem like a good idea to have water line coverage, the reality is that this type of insurance is often not necessary. In many cases, standard homeowner’s insurance will cover you in case of water damage or leaks.
Life Insurance for Children: While it may be tempting to purchase life insurance for your children, it’s typically not recommended. In most cases, children don’t need life insurance as they don’t have financial obligations or dependents.
By understanding which types of insurance are not recommended, you can make informed decisions about how to protect your assets and loved ones. Of course, it’s important to speak with a professional insurance agent to get personalized advice for your specific situation.