[Timgt5]

An article that could save a lot of money, it talks about 14 kinds of coverage that are not worth buying:

http://biz.yahoo.com/brn/080926/26285.html?.v=1

TJ

[AAAAA]

Some I agree with and others I do not. I always get the extended warranty on vehicles and computers. I buy electronics from Best Buy and get their extended coverage. It’s so easy just to box a gaming system up and have a replacement sent. The one time I regret not buying the extended warranty was on the washer that put Maytag out of business; the Neptune that I had to have. I forget who bought them Amana or sears and still market under the Maytag name.

[splitimage]

Some I agree with some I don't.

I buy extended warranties on electronics and am glad I did on my lap top. The wireless card crapped out on me one month after the manufacturers warrantee expired.

I also carry critical illness insurance. I don't have short term disability insurance through work, only long term disability, so if I did get cancer or have a heart attack, I'd need the money to carry me until my LTD kicked in.

Splitimage

[purplebutterfly]

i agree with some but other i do not agree with

[(JD)]

Flood insurance is needed these days because most of the homeowner insurance policies don't cover anything caused by water within, or getting within the house (except for hurricanes.) That means when your icemaker goes on the fritz and begins pouring water out the door's water spout and flooding your kitchen, ruining your toe kicks and baseboards... you need flood insurance for that.

Also, mortgage life insurance could be a misnomer. What mortgage companies require you to buy, is insurance that pays THEM if something happens to you, but you're still out on a limb (dependents are.) If you only mortgage 80% of the value of your home, then you don't have to pay this mortgage insurance. (the second "I" in PITI.)

It's best to have life insurance that pays you directly, and that is enough to make the mortgage payments, should one of the breadwinners dies.

I'm surprised that Credit Life Insurance wasn't on the list (maybe it was and I missed it?) That is a hugely bogus charge.

The extended warranties that this list goes against are those that double the coverage of the item, already covered by the manufacturer. Yes, having warranties that are beyond the regular coverage, especially for electronics, is a good thing...IF you aren't going to want to replace the old electronic thing when he dies anyway.

The only time life insurance for a child could be a good thing is for the first year, imo. If during that time the child is found to have an illness that would prevent her/him from ever being able to buy life insurance, having that insurance already that he/she can take over when grown, allows them to be covered when the wife/husband needs them to be (in the future.)

Most people don't read and know about insurances at all. Anytime you can shake them and wake them and make them think about this is a good thing!

IMO

[Timgt5]

i have never bought extended warranties for electronics. I always find that by the time the thing actually breaks down, it is obsolete and needed to replaced by a superior upgraded version. So far I have not had any costly repairs on anything that I have bought. I know the game system you speak of and it is one of the reasons I stayed away from the 360. I knew when I first looked at them, that they would have heating issues. Everyone of my friends who have had them, are on a replacement and are now smart enough to use an intercooler.

As for cars, no way. I eliminate that expense before I buy a vehicle. I check consumer reports 5 year reliability records and cross out anything that scored average or below average on reliability rating, after all why would I buy something I know upfront I am going to have problems with? Has this strategy worked? I have owned 2 Hondas (1987 prelude and 1994 Civic) both of which had 120K miles before I sold them and I had no repair issues on either of them, an extended warranty would have been a waste of money on either. I currently have a 2000 TL with 105K on it and so far, same story, no problems. If you feel you must buy an unreliable car, then by all means invest in the ext warranty.

The article is written toward a broad audience, so there are specific cases where some of these things are worth getting.

Most experts have long concured that life insurance should only be taken on people in the house who actually earn an income. If you want to invest money for your kids a good no load mutual fund, pays a much better average rate of return over time.

As for flood, yes if I lived anywhere in FL or LA I would probably get it. But here in central NC, we get a serious flood once every 500-600 years I doubt I would live that long to claim it. By the way if your porperty is in a flood plain but the house itself is elevated, you can get an exemption certificate from FEMA.

[AAAAA]

We've used the extended warranty for just about every computer we've ever owned, my daughter just sent her ipod in for a replacement and we've replaced several handheld game systems as well as PS2s (when they first came out.) When Dell did a system replacement, they actually upgraded, which I did not like, had to change operating systems. We also carry insurance on our cell phones, daughter has had her palm replaced three times (kids and cells :-( )

And I do agree with Sky on the flood insurance, our regular policy does not cover any water damage at all. We live about four blocks from the river and prior to 3 years ago it had not flooded in decades, it has flooded every year since 2005. It doesn't take a lot of water to create "serious" damage in a finished basement.

[embarassed]

I can't believe they put FLOOD INSURANCE on the list. They've obviously never been to the Gulf Coast!

[chalmette70043]

AAAAA, talking about cell phone insurance. Just the other day i went to get a new battery for mine. Its covered under the insurance i've been paying for i dont know how many years. (I've used the insurance before with no problem) Well i get to the AT&T store, they replace the battery then tell me its 25 bucks. I said wait i have insurnace. He told me AT&T has placed a deductible now on their insurance of 50 dollars. So whats the use of having insurance on the phone. (I'm alos out of contract and pay month by month, havent renewed yet) You can turn around get a new phone, contract and still pay less than 50 bucks these days.

So i went ahead and just cancelled mine. Not worth it.



And Tim, those exemptions from Fema about if you have a raised house doesnt work down here (southeast louisiana). Every one is required to get them. There was a rumor that it would happen about two years ago and some people did build 15 feet or so off the ground. But it came out that they are not exempt. (Looks really weird seeing those houses in the middle of neighborhoods where its all brick one stories. Those houses look like fishing camps from down the road.)

any way, just my two cents

[bflatgary]

I have not read this article yet, but I will tonight. I am an insurance agent, and I am curious to see what it says.

[bflatgary]

Like others, I agree with some and disagree with some. Here are a few observations...

Auto collision- if you have a late model car, carry the collision coverage. Otherwide, you may not be able to afford the repair. If you have an older car, the car may not be worth repairing anyway. Your lender or lessor will require collision because the car is their investment as well as yours.

Auto medical- In many places it works more quickly that your personal medical policy. It is especially important if you have no medical insurance.

Flood insurance- almost all cities have areas designated as a flood zone. If you own your house outright, you don't have to carry it. But if you live in a flood zone, your lender will require that you carry it. And it ain't cheap. Here in my community we have an arroyo that runs from the southeast part of town to the northwest part of town. It eventually empties into the Pacific. Houses that back up to the arroyo are required by the banks to carry this insurance even though the 100-year-flood will not endanger their house! The arroyo is about 50 feet down its embankments. In 23 years here, I have never seen it deeper than about 10 feet, and that was in record flooding.

Mortgage Life Insurance- Instead of this, get a 30-year term policy to protect your mortgage. The rates are low right now. With this policy the beneficiary will be your spouse, your children, or whomever you designate. That person can pay off the mortgage after receiving the funds if you should die. No sense in the money going directly to the bank. Besides, the benefit may be greater than the balance on the mortgage.

Scheduled property- This is a tough one. It is often used for jewelry and fur. Some policies will not cover everything under personal property. Read the fine print. If you have fancy jewelry that you seldon wear, put it in a safe deposit box at your bank, and the jewelry endorsement will not be needed. And it will be safer.

Low deductables are very expensive. I advise my clients to get a $1,000.00 deductable. It is more initially out of pocket, but it is a small amount compared to what the insurance will cover for you.

I believe people should get an insurance agent they can be comfortable with. Make sure that he or she can explain your coverage adequately. Don't go online looking for the cheapest rate. Make sure that the coverage will take care of what you need it for. If your auto coverage is the bare minimum, don't hit a Mercedes or BMW.

bfG

[(JD)]

Another insurance they didn't list is uninsured driver's insurance. Florida has this (even though I protested. I had just come from MO who had voted it in and it didn't work there either. )

It has yet to cover any accident by anyone I know. Even someone in my family, hit and run, witnesses chased the car and got the tag etc... nothing was paid out through the uninsured driver's element. Even when the other driver IS uninsured, it's still your own policy costs that go up.

Here's one that IS needed: Gap Insurance! If anyone is being fleeced with a lease, you really do need gap insurance.