Monday, October 25, 2010
Money Monday: Types of Insurance You Don't Need
When you rent a car, do you need insurance? How about for your new flat screen TV? Some insurance is a necessity, but in these tough economic times, when can you pass on coverage? Lynn Martnez has tips that could help you save big on tonight's Money Monday.
WSVN -- So, you just bought a brand new TV and the sales person wants to sell you an extended warranty just in case.
#1- Extended warranty: But do you really need it?
Anthony Giorgianni, Consumer Reports: "You should be thinking: forget about it. Extended warranties are just a waste of money."
That's because stores will generally replace a product if it is defective. Extended warranties are also full of restrictions.
Instead: Pay with a credit card that offers product protection. You can also create your own warranty by putting money in your bank account. Collect the interest yourself and use it if you need it.
Anthony Giorgianni: "If you had to insure every single thing you buy, you'll be spending a fortune. It doesn't even make sense."
#2-- How about cell phone insurance? Experts say it's also a waste of money, since monthly premiums can add up to more than the cost of a new phone.
Mike Gikas, Consumer Reports: "The longer you have that phone, the more you paid into the premiums, you're not going to get your money back."
#3-- Do you need insurance for credit card loss? Nope. You've already got it. If you report your card lost or stolen, under federal law the max you'll have to pay is fifty bucks.
Alex Soto, Florida Association of Insurance Agents: "If you look at the federal protection laws that are in place, then a consumer has sufficient protection for loss of a credit card that it's probably not a good buy."
So, paying an additional premium for a product that you don't really need really isn't worth the money.
4. When do you need flood insurance? This one's easy, you only need it if your house is in a federal flood plain and your mortgage holder will tell you that.
5. How about life insurance for your kids? Experts say no. You really only need life insurance for the breadwinners in your family.
Alex Soto: "They're economically not contributing to the household, probably not a good idea to buy life insurance on the children."
6. How about buying extra insurance for checked bags when you fly? No. You probably have three kinds of protection already: From the airline, from your homeowner's insurance, even from the credit card you used to buy your ticket. So, check out your current coverage before you fly.
7. And finally, how about car rental damage insurance? Chances are when you rent a car your regular car insurance already covers you.
Alex Soto: "We need to look at your policy and I'll tell you what's covered or not covered, and number two, you've got to make another phone call, which is to your credit card company cause if you have a gold or platinum card you may have a lot of protection there."
Don't drive yourself crazy, call your insurance agent before you rent. Of course there are some kinds of insurance you definitely do need. Like, insurance for your home and for your car.
If you have any other money questions or story ideas you'd like us to look into on Money Monday, you can tell us about it by emailing us at email@example.com