Before You Buy

Of course the best ways to reduce your overall insurance costs is to avoid duplicating coverage or purchasing insurance that you do not need. Since everyone’s situation is unique the list of policies one may not need will be different depending on each individual’s risk. For example, if you don’t own a home you have no need to purchase a homeowners policy because there is no risk to them of losing their home. However, if renting you do want to investigate offerings for a suitable renter’s policy. In other situations, when one’s risk is very small, dealing with the financial consequences of the loss would be a better risk than purchasing a policy. Determining your risk level will depend heavily on your economic situation compared to the price of the insurance. Insurance to Avoid:

1. Comprehensive and collision coverage for automobiles that have little or no value
2. Personal injury protection coverage (PIP) or just buy the minimum if you have a good health insurance policy
3. Roadside assistance if you already belong to an organization that offers this
4. Mechanical breakdown insurance if you currently own a new car or have a leased vehicle that is still under warranty
5. Rental Car Insurance if you have a current full coverage policy or a credit card that already provides this insurance (check with your agent to see how much your current policy will cover)
6. Life Insurance if you are single and have NO dependents (this includes avoiding life insurance for children!)
7. Travel insurance if your current health insurance policy covers you abroad
8. Extended Warranties on Appliances (this in the end may cost more than just buying a new one)
9. Insurance on outstanding credit card balances; known as credit insurance (this type of insurance can be costly & most have a lot of hoops to jump through before any benefits are paid). For voluntary credit insurance on your mortgage a typical life insurance policy would be a more cost effective option.