Insurance! What You Need; What You Don't Need!

When you think about it, insurance of any form is big business – magnified! It’s also one thing people take seriously. In some cases it’s a necessity; other cases it’s a requirement. You can’t buy a home without insurance. You can’t legally drive any type of vehicle on city streets or freeways without insurance. Then there is life insurance to protect your family, small business insurance, and workers compensation insurance to protect you on your job. If you live in earthquake or hurricane territory, you need insurance to handle that calamity if it happens. And we certainly can’t leave out home content insurance plus the “big” one called liability insurance. Let’s open up our book of “NEEDS” and see what the “good book” says about insurance needs or not.

Small Business Liability Insurance:

This is a “need” insurance. It protects you from 3rd party claims of negligence, and often goes by another name: errors and omissions (E&O) insurance. There are two kinds of policies: professional and general, and policy rates start at $45 per month.

Homeowners Insurance:

This is a “need” insurance. Actually, unless you pay cash for a condo, manufactured, or stick-built home, your mortgage lender will require a homeowner’s policy (basically a fire policy) prior to close of escrow. You need this insurance and you also need a separate policy or “rider” to your original policy called “home contents insurance.”

Your homeowners policy cost depends on the size of your home (square footage), the location, and the type of construction used. Generally the cost will vary but a typical “cookie-cutter” home policy will start around $30 to $40 per month and the content insurance another $15 per month unless you have real expensive stuff.

Now, turning the “good book” page, here are a few insurance policies you don’t need you may already have, think you need, or “can’t leave home” without it. Even if you just eliminated half, you would save enough money to buy a new car for cash over time.

Don’t “Need” Insurance Policies:

Flight Insurance: Totally unnecessary. Accidents are rare and a life policy should provide coverage.

Car Rental Damage Insurance: Your car insurance already covers it; don’t pay twice.

Same goes for regular car rental insurance.

Credit Card Insurance or Credit Card Loss Insurance: Forget it. Federal law stipulates your limit of liability to be $50. It’s a waste of money

Flood Insurance: Unless you live in a flood-prone area, don’t waste your money.

Children Life Insurance: No thanks. Save the money for their education.

Extended Warranties: These policies are a rip-off and rarely used. Your car dealer may try to “hustle” you into one, but don’t take the bait. Don’t even buy one for your $5,000 flat-screen TV, it may make you feel better, but probably won’t pay off anyway.

Vehicle Comprehensive and Collision Insurance: The most expensive items on your auto policy. If you drive an older car, dump both of these, and save money. The DMV could care less.

Tom Clark is a freelance writer, professional blogger, and social media enthusiast. His blog focuses on insurance. You can follow him on Google+