1. Identity theft insurance
Federal law limits your liability from credit card fraud. So, even if a thief uses your credit card, you’re off the hook if you report the theft promptly. According to the Federal Trade Commission:
Under federal law, the amount you have to pay for unauthorized use of your credit card is limited to $50. If you report the loss to the credit card company before your credit card is used by a thief, you aren’t responsible for any unauthorized charges.
Most card companies go a step further and offer $0 fraud liability.
Report a debit card missing within two business days after you realize it’s gone, and you are liable for no more than $50 in stolen money. Wait longer to report, and you could be responsible for up to $500 — or might even face unlimited liability, the FTC says.
Repairing your credit and damage to your identity can be time-consuming and costly. But the National Association of Insurance Commissioners says identity theft insurance only offers so much protection:
Identity theft insurance cannot protect you from becoming a victim of identity theft and does not cover direct monetary losses incurred as result of identity theft. Rather, this coverage pays for expenses related to reclaiming your financial identity, such as lost wages, attorney fees and documentation reporting.
Alternative: Protect yourself before you’re hit. Monitor your bank and credit accounts regularly. Get three free annual credit reports. If you think your identity has been compromised, place a 90-day fraud alert on your credit file. Finally, weigh the pros and cons of freezing your credit.
11 thoughts on “9 Types of Insurance That Are a Waste of Money”
Undoubtedly, the biggest ripoff is an extended auto warranty. I spent $1700 on a policy that the auto dealer made a copy of the warranty sales brochure so I would know who to contact if I had a claim. I subsequently determined that the only problem the warranty covered was a blown engine or transmission-2 items that rarely happen on a car with less than 100,000 miles on it. I had an engine warning light that was determined to be caused by a faulty ignition plug. After 3 trips back to the Cadillac dealer that sold me the car, and the policy, the service advisor was kind enough to tell me what my policy covered. I asked the insurer to cancel the policy and refund my pro-rated fees and was to that they’d send me the paperwork- something they never did. I subsequently discovered that cancelling the policy required a letter from me- a phone call wasn’t sufficient. I still get scam calls from auto warranty companies who can’t believe that I can live without that benefit!
I also bought extended warranty for my cadlac SRX…. I took it to the shop turned out the part was not cover…I learn my lesson i ask for my money back .. I don’t have no money to throw away.
I agreed with you 100%. However, I did made a mistake buying extended warranty on my new CRV by listening to my boyfriend’s suggestions. Boo hoo – to late!!!
I disagree with not getting rental car insurance. Most of the time coverage under your credit card or insurance policy is sketchy at best. When I get a rental car I almost always pay for their insurance; if I get a scrape or worse accident, I don’t want a bill for thousands; I would rather pay an extra $20-$25 a day for peace of mind.
I never bought an extended warranty on any vehicle I have owned until I bought my 2014 Mercedes Sprinter. I guarantee it was a losing deal for Mercedes as my Sprinter has been serviced on warranty issues 10+ times!!! And with big $ parts!!!
Is this also true about the extended warranties, we get all those calls about adding to our current vehicles?
Thx Sarah
Disagree on insurance for children, I have whole life policies on my grandchildren. Not only does it give them very cheap premiums, starting early, but the cash values are greater than the sum of all premiums paid. It is true they are a waste if they are term insurance with no cash value
As far as having insurance on a child I believe in having it. The Term Insurance Policy I had for myself included a $12,500. Policy for free until she was 25 then she would have to take it over. The very saddest thing happened when my daughter was 20. We found an unnamed cancer no doctors had ever seen before. She had a terrible battle with for 4&1/2 yrs. she had Sarcomas that just grew overnight. She had every type of chemo drugs 3 together at a time for a week and radiation on a brain tumor she battled it everyday until she couldn’t take anymore. So at age 24 my daughter passed away. Her funeral came to over $12,000. We had the insurance to cover her Funeral. The point Is through DNA testing we found it came from her dad it was something with they’re Chromosones and it didn’t skip generations my son wouldn’t get tested he was 15yrs older than her and accepted that if he got it. That was his destiny. But we did test 2of his daughters and both had the genes so we have to watch them closely. What they did find through the DNA testing my daughter was born with it and it was in every cell it just didn’t present until she was 20. So you never know when something will happen. As I said she was rider on my policy for free.
Sorry to hear about your daughter. What were her symptoms?
I got a email from a company saying that I was approved for a loan when I call to find out what happened they said that I could not get the loan is there any thing I can do about that
Never Buy extended warranty‼️Even my dealer said I saved money👏👏👏