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Are you overpaying for insurance? (Part II)

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Are you overpaying for insurance_ (Part II).png

Last time, we discussed how insurance can be something of a sticky wicket for consumers. While no one wants to waste money on unnecessary coverage, it is equally important to ensure adequate protection.

In addition, we also began discussing how experts advise cost-conscious consumers to avoid identity theft insurance and credit insurance. Having established that these are not always the best purchase, what else should consumers know?     

Collision coverage

Take a close look at your next car insurance statement. You'll see that a certain amount of your payment goes toward coverage of both liability and collision protections. While you are legally obligated to carry the former, the latter might not be necessary.

Collision coverage is earmarked for repairing or replacing your vehicle. If you drive an older model, experts indicate it might be unnecessary given how fast vehicles depreciate.

Critical illness coverage

Critical care coverage is designed to offset the high deductibles and out of pocket costs of serious illnesses. Offered by a third of U.S. businesses, employees essentially pay modest rates for modest benefits.

While having supplemental income when fighting cancer or ALS is appealing, experts advise caution. Policies are often laden with precise definitions and exclusions. Furthermore, benefits are reduced with age.

Experts say that a better option might be opening a health savings account or securing additional disability coverage.

Cell phone insurance

Given how much we pay for and rely on our cell phones, insurance might make sense. However, those in the know indicate that the need for cell phone insurance depends on the person.

If a person is likely to lose the phone, insurance might be worthwhile. However, if the concern is cracking the screen, a $10 protector may be a better investment.

Those who decide to proceed with purchasing various insurance policies should at least check the terms of warranties first. Consumers should also understand that while the premiums are potentially not too high, the deductible can be substantial.

What are your thoughts? Do you agree with these assessments? Are there types of coverage you think are - or aren't worth it?

Source: CBS News, "14 kinds of insurance that can waste your money," April 27, 2017

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