13 Types of Insurance People Get That Are Totally Worthless

Insurance policies are lifesavers when things go downhill. However, not all policies are relevant or beneficial. Some of these coverages are useless and will swallow your savings without any meaningful benefits to you. Here’s a look at some of the options you may want to avoid or drop if you already have them.

Private Mortgage Insurance

Buying this makes you look like you’re buying an umbrella for a sunny day. It’s often bought to protect a homebuyer from lenders. This will not cover anything extra for you, only the lender’s risk if you default. People are convinced by lenders to buy, thinking it benefits them directly.

Extended Warranties

Have you thought of extended warranties when you purchase an electronic device or appliance? Don’t think of it because it will not deliver on the promise. The product will likely not break down before the warranty runs out. The existing manufacturer warranty is adequate to protect you from your fears.

Identity Theft Insurance

You’re never liable for any crime committed under your identity, provided you can prove it was not you. That makes this insurance one of the most useless protections you’ll purchase. Further, many banks and credit cards already offer free monitoring and recovery services. Thus, you are unlikely to need this.

Credit Life Insurance

While it’s a good thing to pay debt, failure to pay because you died cannot be your mistake. Just opt for regular life insurance because it will cover all these debts you’re worried about. It’s a product that will take money away from you with no meaningful ROI.

Car Rental Damage Insurance

This is another pointless expense that drains your pockets with no return. You take it out of fear of unexpected events and repair costs for your rental car. However, most credit cards and personal car insurance policies already cover rental damage. You’ll just be duplicating an already existing cover.

Flight Insurance

This might sound enticing to you as a frequent traveler, but it’s usually unnecessary. Your life insurance and other relevant airline insurance cover you for any eventuality. This is a needless overlap that only eats away at your funds. It’s redundant cover and a waste of money.

Life Insurance for Children

Taking a life insurance policy on your children makes you a more suspicious parent than it makes you a caring one. While your intention is to secure your children’s future, it makes no sense. Instead, choosing other investment vehicles guarantees you greater returns for your kids.

Credit Card Insurance

Why not just manage your credit card expenses instead of buying insurance for them? It’s often bought to cover expenses when you are unable to pay for them. Besides, existing credit card protections and consumer laws already cover this. Additionally, the coverage is limited and expensive. Avoid it at all costs!

Credit Card Loss Insurance

You buy this to protect you against the loss of your credit card. However, it’s a largely redundant policy. This is because your credit card company already has coverage for fraudulent transactions if you promptly report them. Buying it adds unnecessary costs that give you no additional benefits.

Automobile Collision Insurance

This often looks essential, but it’s just overkill. You use this cover to pay for post-accident repair costs. This makes no sense, especially if you have an old car with a low market value. The premiums for this cover are likely to exceed the value of your car.

Cell Phone Coverage

Smartphones can sometimes be costly to repair, making it sensible to buy cell phone coverage. Despite the smart move, the costly premiums and deductibles will likely surpass the value of your gadget. The manufacturer’s warranty should be adequate to cover the repairs in the unlikely event that your phone spoils.

Mortgage Life Insurance

You may think this is vital, but it’s actually unnecessary. It’s often bought to pay off the mortgage in case you die before completion. This is duplication because the regular life insurance policy adequately covers this eventuality. It’s limited and expensive, making it a redundant option.

Pet Insurance

Pet insurance often proves to be a waste of money. Most policies have high premiums, numerous exclusions, and caps on payouts. Routine care isn’t typically covered. You’ll end up paying most of the costs out of your pocket. Open a savings account for your pet for better value.

19 U.S. Cities Where Auto Insurance Rates Are Skyrocketing

The cost of living crisis is leaving nothing untouched. Car insurance premiums are soaring across the U.S., reflecting a complex blend of factors from traffic congestion to theft rates. Here’s a closer look at the cities facing the steepest increases in auto insurance costs:

Los Angeles, California

The City of Angels is notorious for its dense traffic and high vehicle theft rates, with over 80,000 thefts reported in 2022, according to the Los Angeles Police Department. With a population exceeding 4 million, these factors combine to create a high-risk environment for insurers, leading to escalating insurance premiums that reflect the heightened risk.

Tampa, Florida

Tampa drivers contend with some of the highest insurance rates in Florida, exacerbated by the city’s vulnerability to hurricanes and flooding, as reported by a 2023 Tampa Bay Times article. These natural events frequently damage vehicles, leading to higher comprehensive insurance claims. The city’s growing population and tourist influx further contribute to congested roads and a higher incidence of accidents, pushing premiums upward.

Cleveland, Ohio

Cleveland faces a unique set of challenges that drive up insurance costs, including severe winter weather conditions that lead to icy roads and increased accident rates. A 2023 report by WKYC indicates that the city’s economic conditions also play a role, with a higher-than-average rate of uninsured motorists compared to other U.S. cities. This combination of factors results in a higher risk profile for insurers, reflected in Cleveland’s auto insurance premiums.

Minneapolis, Minnesota

Minneapolis is known for its harsh winters, which include heavy snowfall and icy conditions, leading to a higher frequency of auto accidents during the cold months. According to a 2023 report by the Star Tribune, the city also has a dense urban layout that contributes to frequent vehicle collisions. Additionally, Minnesota’s no-fault insurance law requires drivers to carry personal injury protection, which can increase the overall cost of insurance policies in Minneapolis.

Detroit, Michigan

Despite a decline in car thefts, Detroit contends with a significant number of uninsured drivers—over 20% as of 2023, according to the Detroit Free Press. This contributes to a higher frequency of hit-and-run incidents and financial losses for insured drivers, necessitating higher premiums to cover the increased risk.

Miami, Florida

Florida has some of the highest auto insurance rates in the country, with drivers in Miami paying well above the state average, which exceeds $3,100 annually, as reported by NerdWallet in 2023. Factors such as Miami’s high accident rates and heavy tourist traffic exacerbate the situation, pushing premiums even higher.

New Orleans, Louisiana

This city’s insurance rates are impacted by Louisiana’s high uninsured motorist rate—over 13% according to a 2022 report from the Insurance Information Institute (III)—and frequent flooding, which leads to costly vehicle repairs and replacements, further inflating insurance costs.

Atlanta, Georgia

Ranked among the top 10 most congested cities in the U.S. by a 2023 WSB-TV report, Atlanta’s sprawling metropolitan area sees a high volume of traffic accidents, leading to increased insurance claims and, consequently, higher premiums for its drivers.

San Francisco, California

Similar to its southern counterpart, Los Angeles, San Francisco deals with a dense population, significant traffic congestion, and a high rate of car break-ins—over 24,000 in 2022, as per SFPD reports. These factors make for a risky insurance landscape, reflected in the city’s costly premiums.

New York City, New York

The complexities of insuring a car in NYC include rising car theft rates, with over 10,000 incidents in the first half of 2023 alone, according to The Zebra, as well as the additional costs associated with parking and garaging vehicles in the city. These elements combine to drive up the cost of auto insurance significantly.

Chicago, Illinois

Chicago’s harsh winters contribute to a high rate of weather-related accidents, making it one of the top U.S. cities for winter driving mishaps, as per a 2023 WGN-TV report. This weather-induced risk results in more claims and higher insurance premiums for local drivers.

Houston, Texas

While Texas generally enjoys lower-than-average insurance rates, Houston is an exception due to its vast size and high rate of uninsured drivers—over 15%, according to a 2022 Texas Department of Insurance report. These factors contribute to a riskier driving environment and higher premiums.

Baltimore, Maryland

With auto thefts exceeding 18,000 in 2022 and an uninsured driver rate over 17%, as reported by the III in 2023, Baltimore’s drivers face significant risks that are reflected in their insurance premiums.

Seattle, Washington

Long commute times in Seattle—over 30 minutes on average, exceeding national figures as per a 2023 report from The Seattle Times—along with challenging weather conditions, contribute to frequent accidents and higher insurance costs.

Phoenix, Arizona

Despite its wide, driver-friendly roads, Phoenix’s extreme climate and increasing instances of distracted driving—highlighted in a 2023 report by the Arizona Department of Transportation—lead to frequent vehicle wear and tear and a rise in accidents, pushing up insurance rates.

Philadelphia, Pennsylvania

Philadelphia struggles with aggressive driving and a high number of uninsured motorists—over 14%, according to a 2022 PennDOT report. These issues lead to more accidents and higher financial burdens for insured drivers, reflected in rising insurance costs.

Denver, Colorado

As Denver’s population grows, so does its traffic congestion. Now ranking in the top 20 most congested cities in the U.S., according to a 2023 Denver Post report, the increased road traffic leads to more accidents and, consequently, higher auto insurance premiums.

Portland, Oregon

Portland’s unique geographic and climatic conditions contribute to its challenging driving environment. Frequent rain and fog lead to slick roads and reduced visibility, increasing the likelihood of accidents. As per a 2023 report by KOIN, Portland also has a high rate of bicyclists and pedestrians, which complicates traffic scenarios further and leads to more insurance claims, thereby increasing premiums for local drivers.

San Diego, California

Known for its beautiful weather and extensive freeway systems, San Diego still faces significant insurance rate challenges, primarily due to its proximity to the Mexican border. This geographical factor increases the risk of car thefts and uninsured drivers, a problem highlighted in a 2023 report by the San Diego Union-Tribune. Moreover, the high cost of living in the area adds to the overall expense of car ownership, including insurance premiums.

When is the Best Time to Switch Car Insurance Companies?

There’s never a good time to switch car insurance companies, and here’s why: you hope that your current company provides you with high-quality, comprehensive coverage well into the future?

Unfortunately, there may come a point when you need to make a change. While it sounds like a big deal, it’s easier today than ever before. You can shop for and compare quotes online, all with the goal of buying a policy in the near future.

Here are five times when you may need to switch car insurance companies:

  1. To Save Money

Most people are always on the lookout for ways to save money. For example, you may decide to switch banks if the fee schedule becomes out of hand.

The same holds true with car insurance companies. If your current provider is charging you more than the average for someone in your position (in your state), it may be time to move on.

If nothing else, you can request car insurance quotes online to better understand what else is available. This alone will tell you if a simple change can result in saving money.

  1. After a Bad Experience

You hope that your car insurance company will provide you with a good experience, time after time. But you also know that things can and probably will go wrong at some point. And when that happens, you have to decide if it’s time to move on.

If you’re interested in switching car insurance companies, find one that provides better service than the provider you’re leaving. This will help prevent bad experiences in the future.

  1. For Better Customer Service

Some car insurance companies are devoted to providing you with a high level of quality customer service, whether it be online or over the phone.

Conversely, there are also car insurance companies that lag in this regard. They talk about how they provide the best service, but when it comes down to it, nothing could be further from the truth.

For many people, paying extra money for better customer service is well worth it. This gives them peace of mind in knowing that they will be taken care of should anything go wrong.

Tip: test out a car insurance company’s customer service by calling them on the phone and asking a few basic questions. If they treat you poorly, you can expect the same type of service if you become a customer.

  1. When Buying a New Car

There is a lot that goes into buying a new car. For this reason, it’s easy to overlook the fact that you need to purchase insurance.

If you’re not 100 percent happy with your current car insurance company, this is a good time to make a change. At the very least, you can request a handful of quotes from other providers to see what else is out there.

If you’re going to make a change, be sure that you’re getting equal or better coverage at the same or lower rate. This will ensure that you’re a happy customer from the start.

  1. When Traveling for an Extended Period of Time

For example, your car insurance company may not allow you to cancel your coverage and restart it whenever you want.

You may find yourself asking questions such as do you need insurance on a car that doesn’t run? Since you’ll be away from the vehicle for an extended period, you don’t want to pay for coverage.

Every car insurance company takes a unique approach to this. If your current provider is unable to meet your needs, it’s time to start your search.

By switching car insurance companies, you may find it easier to alter or put your policy on hold if you’ll be traveling for an extended period of time.

Ask for clarification from any company you’re considering, so you don’t run into surprises the next time you decide to leave home for a while.

Final Thoughts

There is no right or wrong time to switch car insurance companies. If you have reason to believe it’s a good idea, now’s the time to learn more about the process.

Shopping online is the most efficient way to find an affordable policy that provides the coverage you need.