Are You Paying for Insurance You Don’t Need?

March 28, 2017 1:45 pm

In our endless quest to save money for various purposes such as emergency funds and retirement, we often find ourselves short on cash for a variety of different reasons. For starters, perhaps we’re paying too much for utility bills, or maybe we’re getting into more accidents recently which results in higher medical fees and more repair costs for things such as our cars or computers. Whatever the reason, there’s one area that few people remember to look when they want to stop bleeding money: insurance.

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Insurance plans are, by default, extremely convoluted, covered in jargon and confusing to navigate. It almost feels like they are designed to confuse you so that you have to hire a financial advisor or a broker in order to get the right care for your situation. Unfortunately, this means that you’re eventually going to run into the issue of paying for insurance or being sold a plan that you don’t want or need.

But how do you know if you’re paying too much? The best way is to check what insurance plans you are paying for by budgeting. Once you’ve established that you’re paying for insurance you don’t need, you can cancel the plans but you can also take it a step further and make professional broker claims to a lawyer. Being mis-sold insurance is something that can be taken to court because it is the broker’s duty to care and listen about your situation to provide you with the best services possible. However, if you feel like they have been taking you for a ride and abusing your trust, then it’s time to get some compensation.

But to give you an idea of insurance plans that you really don’t need, here’s a list of things you could do without.

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Extended Warranties

The warranty on your appliances and devices around the home is usually enough to serve your needs. You probably won’t need ten or more years of warranty on small items like a video games console or even a pair of headphones, so why pay extra for extended warranties? Whenever you purchase something new, make sure you aren’t paying additional costs or that your broker isn’t suggesting that you pay for home cover on items that are still covered by the manufacturer.

Rental Car

Many car insurance companies also add in a clause about rental cars. The idea is that if you’re ever in an accident that ruins your car, you can get a cheap rental car to help fill the void while your car is being repaired. However, people rarely ever rent a car when theirs is being repaired and they instead chose to use public transportation or get a ride from a friend. It’s relatively inexpensive to cover the cost of a rental car, but it’s also an unnecessary expense.

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Flight Insurance

Airline incidents are portrayed by the media in the most gruesome and terrifying ways. However, flying is still one of the safest ways to travel and airline accidents are rare. In the event that there is catastrophe, your life insurance policy will typically cover most situations, meaning flight insurance is essentially useless.

Unemployment Insurance

It sounds enticing to have an insurance plan that pays you if you lose your job, but it’s more cost-effective to simply save up money in an emergency fund. The constant payments you have to make are going to eat into your budget, and most unemployment insurance plans pay out minimum wage, meaning you don’t actually get much money. Cut out the hassle and simply save money instead.

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