In a Seinfeld episode where Jerry tries to make up a bit for his comic routine, he notes telling Elaine that the makers of antacids have quite a business. They get you take something even before you have any indigestion. It's a market that's interested in buying product to protect itself from a problem that doesn't even exist. Insurance isn't all that different. Most people pay life insurance their whole lives and find to their disappointment that an Acme safe didn't fall on their head while they were waiting for a bus, after all. They buy car insurance and never have the satisfaction of having it totaled in a car wreck. The point is, that there really are several types of insurance that aren't worth buying.
Let's start with a couple of options for your car -rental car insurance, rental car damage insurance and collision insurance. When you take out insurance for your own car, your insurer will usually offer you rental car insurance. And this is one useless, and expensive add-on. Rental car insurance is all about thinking really far ahead. This is where you think about how when your car is in an accident and sitting in the workshop while they build it back together with superglue, you'll need to rent a car. They promise to reimburse you for what you spend on car rentals like this. The problem is, that you're paying for this thing every month for that one time in 10 years that you'll be in an accident like that and need a rental car. You'll have paid more for this insurance by then than you would pay for the rental car if you paid for it yourself. How about rental car damage insurance - the add-on extra you buy at the rental car counter? You know why these types of insurance are a bad idea - it's because you're doubling things. Your own car insurance company will usually pay for any rentals as well.
Collision insurance for your own car is a useless thing too. It might be a little difficult to fathom why this is useless. After all, you do want to be covered for the cost of the repairs if your car is totaled, don't you? Well, you certainly do - and you do have it already. Every car loan comes with car insurance included in the deal. If you take out separate collision insurance, you're doubling things - a great way to spend too much if ever there was one.
They must sit around and try to think of ways in which to sell you types of insurance that mean nothing. Flight safety insurance, extended warranties, and unemployment insurance are the kind of thing they come up with. Let's face it - your flight isn't going to crash. And anyway, your regular life insurance has coverage for this already. As for extended warranties, these are just so wrong in so many ways. To begin with, if you buy a good quality branded product, and it works well for the one year or so that you have the manufacturer's warranty, you can be pretty sure that it's going to be dependable in the hereto for as well. You might be tempted to get insurance for that huge 60 inch television sitting in your living room. But for anything less than $5000, you're just throwing your money away.
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