Fourteen Insurance Policies You Don't Need

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When Shakespeare observed, "What fools these mortals be," he easily could have been referring to our tendency to buy unnecessary or downright useless insurance.

Granted, some insurance coverage is absolutely necessary, including home, health, auto, life and long-term disability. Ignore these at your peril.

But on more than a dozen policies -- especially narrowly focused single-purpose coverage on things like accidental death, cancer, credit card fraud and mortgages -- we simply fall victim to fear and salesmanship and purchase coverage that is redundant, unnecessary, impractical or downright wasteful.

"All of the single-purpose insurances turn out to be a bad deal," says Gail Hillebrand, senior attorney for Consumers Union.

"You have to ask what the loss ratio is, which is for every dollar taken in, how much is paid back out in claims? It's quite common in various kinds of credit insurance for it to be 10 (cents to) 15 cents on the dollar and even less, as opposed to your car insurance, which turns out to be paying 80 (cents to) 85 cents on the dollar. It just illustrates how bad a deal it can be."

What's worse, 19 percent to 25 percent of us overpay for insurance by purchasing coverage with zero or low deductibles, according to a recent study, "Why Do People Buy Too Much Insurance?" by New York University professors Zur Shapira and Itzhak Venezia.

"It was kind of surprising," says Shapira. "Almost always, you should get a high deductible rather than a low deductible."

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Jack Hungelmann, a veteran Minneapolis insurance agent, risk management consultant and author of "Insurance for Dummies," says our tendency to buy too much and/or frivolous coverage is the norm rather than the exception.

"You want a balanced program so that all the major losses are equally well-covered, with prudent use of deductibles," he says. "Most insurance programs I audit are out of balance."

Ready to trim your insurance costs? Here, in alphabetical order, are 14 policies you can probably scale back -- or live without.

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