The world can be a risky place, and insurance helps you protect yourself, your loved ones, and your assets from catastrophe. Nowadays, there's a whole new cast of catastrophes from terrorist attacks to sudden iPod malfunctions, but do you really need to insure yourself against each and every possible calamity?
Maybe, maybe not. Specific policies may not be for everyone, but they do make sense under special or unusual circumstances. Let's take a look at some.
Travel insurance. In many cases, this insurance duplicates coverage you probably already carry. The policies cover your losses if you must cancel a trip, lose your luggage, or die in a plane crash. If you have renter's or homeowner's insurance, your baggage and belongings may be covered while you're on the road. Life insurance will take care of your loved ones in the event of a terrible accident. Your credit card might even offer some travel insurance for tickets purchased with the card. Check for redundancies before buying any type of travel insurance.
Mortgage life insurance. This policy pays your mortgage in the event of your death. But you can include that protection when you buy life insurance. There's no need for a separate (and probably more costly) policy, unless you cannot pass a standard life insurance medical exam.
Credit card loss protection. There's a good reason the Federal Trade Commission calls this insurance the "real steal." There's no need to buy insurance to cover your losses if a thief gets your credit card number and goes on a spending spree. The federal government's got your back here. Laws limit your losses to $50 in unauthorized charges. Just make sure you report any card loss or theft ASAP.
Other credit insurance. Policies abound that will pay your credit card balance if you die, or cover your minimum payments in the event of disability. These risks can typically be covered with adequate life insurance or disability insurance. Take steps to protect yourself by paying off your credit cards and establishing an emergency fund instead.
Pet health insurance. If money means nothing when faced with the possibility of Fluffy ascending to the Great Litterbox in the Sky, this policy might be right for you. Premiums can be reasonable, but they increase markedly as your pet ages.
Flood insurance. No one who witnessed the destruction caused by Hurricane Katrina should be unaware of the need for flood insurance. Most homeowners' policies don't cover this peril. If you live in a region at high risk for flooding, you should definitely carry this insurance, but floods don't always follow the map. Use the maps made available by federal government's flood insurance program to discover your risk. Although the federal government backs this insurance, you'll purchase a policy through insurers such as Allstate
Get more information about insurance coverage you might need at the Insurance Center. Then delve a little deeper and find out:
- Whether you need an umbrella policy
- What your homeowners insurance should cover
- How to get the best auto insurance.
