10 Insurances You Don't Need

Here’s a list of 10 insurance options you don’t need to buy. It’s important to be prepared for the unexpected, but in some cases other insurance coverage already covers you, or would work better.

• Mortgage insurance – Buy term life
• Credit-card-loss-protection – Federal law limits your liability to $50
• Care-rental insurance – Use your own car insurance or see if your credit card offers it
• Flight insurance – Use life insurance and health insurance

Other insurances you don’t need include cancer insurance, credit-life insurance, credit disability insurance, credit-card balance insurance, accidental-death insurance, and identity-theft insurance. — BEN POPKEN

10 Insurance Options You Don’t Need [Frugal For Life]


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  1. critical_matt says:

    Your homeowners policy will have some coverage for identity theft also. Not a whole lot, but something to help out. Check for it in the additional coverage section of your policy.

    Insurance you do need if you’re driving in Mexico – auto insurance. Your auto carrier will not cover you in Mexico more than about 50 miles from the border. You can also get thrown into the clink by Mexican police.

  2. kerry says:

    When I rented a moving truck from Budget they required that I purchase one of their insurance plans to go with it. You could not rent a truck without purchasing insurance. I have a feeling other car/truck rental companies might have the same policy.

  3. orielbean says:

    ?? I got my Budget truck for a moving day. No insurance. He pushed it mightily on me, but to no avail. They have to include it in the rental price if you HAVE to have it. Sounds like he f-ed you, partner. Am I missing something here?

  4. critical_matt says:

    It depends on the gross vehicle weight. Your auto insurance will not cover anything over 10k lbs. Anything less than that, and your auto coverage extends to the rental.

  5. bluegus32 says:

    kerry said: “When I rented a moving truck from Budget they required that I purchase one of their insurance plans to go with it. You could not rent a truck without purchasing insurance. I have a feeling other car/truck rental companies might have the same policy.”

    It depends on the size of the truck. Your personal auto policy will typically only cover single axle vehicle rentals. Large rental trucks have double axles and therefore are not covered by your auto policy. that’s probably why you were required to pay for extra insurance.

  6. yetiwisdom says:

    I rented a 27-ft truck for moving and my auto insurance wouldn’t cover over something like 18 feet. I got the coverage and am glad I did b/c I backed that sucker into my sister’s Mercedes and took a good chunk of it out. To my amazement, the insurance company responded to the claim quickly, professionally and much to my sister’s satisfaction. The rental company (Ryder, I think) was also easy to deal with since I had bought the insurance. $20 well spent in my opinion – if only to avoid the hassle with my own insurance company.

  7. kerry says:

    It probably depends on the franchise, but the contract we signed for the truck we rented clearly stated that one of three insurance plans was required. I’m positive I didn’t get screwed, as Budget was the only positive renting experience I’ve ever had. They laid all of their prices and policies out quite thoroughly before I signed anything, and for certain one of those policies was mandatory Budget-provided insurance. The lowest coverage was $25 with a $1000 deductible.
    Considering we don’t own a car, it’s not like we could rely on our own auto insurance, anyway. *shrug*

  8. silverlining says:

    How about “wedding insurance”–e.g. all the costs if your wedding is postponed or called off completely? Seems like a candidate for the list.

  9. medalian1 says:

    what is care insurance

  10. Triteon says:

    Also, never take insurance in blackjack ;)

  11. weave says:

    I recently had a claim with Hertz after some idiot ran into my rental while parked on a residential street, and fled the scene. I had opted for American Express’s Premium Car Rental insurance, for a flat $24.95 for each rental.

    On the plus side, Amex handled the entire claim. I didn’t have to put in a claim to my car insurance, saving me from that aggravation and potential hit on future rates. They paid Hertz directly.

    On the down side, they didn’t cover loss of use (one day) or administrative fees. Amex claimed they would cover it if the car rental company could prove for that day that 85% of their fleet was rented and that administrative costs were above and beyond the normal cost of doing business.

    Since the charge was less than what I saved by not getting CDW and since I have better things to do than fight it, I just paid it.

    Anyway, something to keep in mind.

  12. cleigh says:

    Kerry, it also depends if you rented on a household or commercial contract…for example, Ryder doesn’t do household rentals anymore. They’ll rent to joe schmoe, but they treat you as your own little business – therefore require either their insurance, or a MUCH greater insurance level than you’d have.

    That’s weird for Budget though…I’ve never heard of them *requiring* insurance, especially since they’re much more consumer-based. Penske’s is optional as well…

    Bluegus, that’s not entirely correct…no consumer rental trucks have two rear axles…double-axles have higher GVWs (gross vehicle weights), putting them into the CDL drivers license range. Consumer trucks may have multiple wheels on the rear axle, but they are all single-axle.

    Most insurance companies cover or don’t cover truck rentals based on weight, as someone said earlier…greater or less than 10,000lbs GVW. It also depends on the individual policies, etc. etc…

  13. DCAview says:

    Auto rental companies’ collision-damage waivers (CDW) insurance isn’t worth it if your credit card covers rentals, but don’t forget that if you don’t have a car of your own (and therefore no car insurance), your credit card won’t cover any liability you incur toward anyone else.

    That is, your credit card will cover damage caused to your rental car, but it won’t cover damage to another person’s car or body that you cause through your operation of the rental car.

    Most car rental agencies sell supplemental liability insurance (SLI) for about $8-$12 a day that will cover you up to $1 million. If you don’t have auto insurance of your own, it’s usually a good idea to pick up the SLI.

  14. zolielo says:

    Kind of a double post on rental car insurance. Did not one of the gawker blog have a long thread about it. With the base result being get it for peace of mind…

  15. InsuranceGuru says:

    I forwarded this to my wife who is First Party Insurance Attorney dealing with wrongful denial of insurance benefits. These are her profssional responses:

    1 TRUE
    2 TRUE
    3 FALSE Your own insurance seldom covers rental cars. Out of state, always buy the coverage.
    4 FALSE Most life ins. does not cover commercial flights. Health insurance sucks. Buy travel insurance for out-of-state trips.
    5 Depends. Low premium insurance is good. Most health ins. policies only cover 1m$ – long term cancer can cost 3x’s that amount. If you are at risk by family history, it may be worth it.
    6 TRUE
    7 TRUE. Nevertheless, disability insurance is tough to get
    8 TRUE
    9 TRUE
    10 TRUE

    PS: You have the best website on the internet. Keep up the great work.

  16. laughingskeptic says:

    Term Life can and historically often has been a scam. State Farm stole $1600 from me this way in 1991-1992. Before I was to make my third payment, I scrutinized the accompanying report and found that the performance of the ‘investment’ part of my term life account was non-existent. What State Farm did was drastically raise and even create new fees on my payments so that they could continue to report their promised returns on what little money was left. My memory is fuzzy now, but my $800 payment was supposed to be broken out as something like $35 for the insurance, $35 for some sort of fee and $10 for some other fee and the rest went to the investment portion which was supposed to have a suspiciouly high rate of return. My balance at the end of year 2 however was only something like $400 when according to the ‘sales math’ it should have been over $1400. I immediately called State Farm and they tried to convince me that they had done nothing wrong and if I did not make my next payment I would loose my $400. I did not make my payment, and walked away from the $400. I continued to get statements for a few years and they were eventually sued in a class action suit which I foolishly agreed to be a participant in. Foolishly, because when the suit settled, I was a ‘tier-3’ victim or some such nonsense and I got absolutely nothing from the settlement. I’m sure the attorneys made millions. In my book State Farm is a big fat theiving company that still owes me $1600 plus 18 years of interest.