Team Clark is adamant that we will never write content influenced by or paid for by an advertiser. To support our work, we do make money from some links to companies and deals on our site. Learn more about our guarantee here.
You can get insurance on almost anything — computers, phones, trips, your identity, your credit and even home warranties! But should you?
“You should never insure something that is a consumer item,” money expert Clark Howard says. “People always worry about insurance on narrow things instead of the big things in life they really need it on.”
Here are a few kinds of voluntary insurance policies Clark does not recommend…
Single-issue insurance policies are generally considered a ripoff by many consumer advocates, including Clark. Examples of such policies are those that only cover one specific scenario such as cell phone insurance and pet insurance.
Cell phone insurance typically runs about $120 a year. You have a deductible to meet — usually anywhere from $50 to $200 — and after paying that you often get a refurbished replacement phone. Not necessarily a new one!
RELATED: These Credit Cards Will Pay to Replace Your Stolen or Damaged Cell Phone
They’re a common sell on electronics of all kinds, but Clark says they’re completely unnecessary. Want proof? Modern TVs only fail 3% to 4% of the time, according to Consumer Reports. Why would you pay extra for something that has a 97% likelihood of giving you no trouble at all?
If something goes wrong in your home, the warranty companies are brutally difficult to deal with. They require you to use their contractor only. That contractor may or may not come on schedule while you’re burning up in the heat of summer without AC or freezing in the dead of winter without heat, as just two examples. And then you’ve got a deductible on top of that!
Clark says home warranties are not worth the paper they’re written on!
The company Home Title Lock offers a subscription monitoring service that will alert you to court filings affecting your home’s title, but it is not the same as home title insurance.
Clark recommends that every homeowner buy their own home title insurance, rather than relying on the insurance purchased by the lender.
RELATED: 4 Things to Know Before Buying Owner’s Title Insurance
Credit monitoring keeps tabs on your accounts so you’ll be alerted in the event of identity theft. But you don’t have to pay for it! Several companies like Credit Karma and Credit Sesame offer credit monitoring for free. (Make sure you sign up for free credit monitoring before you freeze your credit.)
RELATED: How to Monitor Your Credit for Free
Chronic diseases generally aren’t covered, and insurers often won’t pay for known defects among certain breeds. And of course, no insurer covers pre-existing conditions. Watch out for a maximum limit on treatment for individual illnesses too.
This post was last modified on October 2, 2020 8:13 am
If you plan to take an international flight or cruise anytime soon, there's one free…
Pop quiz: What's money expert Clark Howard's favorite tax-advantaged retirement tool? If you guessed Roth…
Are you considering subscribing to NFL Sunday Ticket for the upcoming season? Now may be…
Did you know major changes are coming for the way credit card processing fees are…
There’s a lot to love about Costco. The company has deals on just about every…
Money expert Clark Howard started a travel agency in his mid-20s and grew it into…