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Five Types of Insurance to Avoid

There’s an insurance product for almost everything but that doesn’t mean you need them. The sales pitches might be compelling and convincing but there are some you can likely avoid.

Rental Car Coverage

It would be a giant pain in the neck to wreck a rental car so why not get the insurance? Because you probably already have it. Your auto insurance policy likely covers your rental car. You need some sort of insurance while driving the rental so check with your insurance company before picking up the rental. You may also be required to pay your deductible upfront if you wreck the rental. Make sure you can cover it.

Credit Life and Disability

Here’s a general rule to live by: Don’t buy insurance from a company that isn’t in the insurance business. Example: your credit card company. According to the slick advertisement that comes with your credit card bill, if you’re injured, become disabled, or pass away, your debt is paid.

That’s only partly true. Often the coverage is skimpy and may only pay if your claim was caused by an accident. Appropriate life insurance will cover these expenses.

Dental Insurance

Sure, the dentist is expensive but by insurance standards, it’s pretty cheap. According to Investopedia, the average person will pay about $50 per month for $2,000 in annual coverage.

Most people will spend about $400 per year on dental work and when you need a more expensive procedure, you will still likely pay a significant portion out of pocket.

However, there are a few reasons dental insurance might be a good deal. If it comes as part of your company benefits or your family routinely pays a higher-than-average amount in dental bills most years, it makes sense.

If you want the peace of mind that comes with insurance, purchase a policy until you can save $2,000 in an emergency fund. Then, drop the policy.

Related: Here’s Why Losing Weight Will Fatten Your Wallet

Extended Warranties

When you purchase your next expensive item, you know that somebody is going to offer you extended warranty coverage. It’s called a warranty but it’s actually an insurance policy that covers you after the standard manufacturer’s warranty runs out.

According to, when a product needs repaired, it’s most likely to happen during the initial manufacturer’s warranty period or after the extended coverage runs out. Second, if it does break, the repair cost will probably be lower than the cost of the extended warranty.

Pet Insurance

The problem is that not all pet insurance is created equal. Many policies have low lifetime limits and high deductibles while others might be worth the cost. Go to a site like and research the options.


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