Is it Time to Ditch Your Insurance Policy?

I am re-posting a useful article, "6 Insurance Policies That Aren't Worth the Money" which was published in the June/July 2011 issues of Readers Digest.

One of our readers wrote to me about their past employment experience working for a well-known rental car agency. He said that they made all their profits by convincing people to buy their rental insurance, although they did not disclose that most credit card companies insure rental vehicles. However, the RD article does suggest opting for extra rental insurance coverage if you're planning on driving outside of the US or if the deductible is high in case of theft from your car.

Another good point addressed when to re-evaluate your existing car insurance, especially on a car with little market value. The first step is to find out the Kelley Blue Book value. Then figure out how much you are paying in collision insurance + comprehensive car insurance. This figure should not be higher than 10% of the car value. For example, a 2000 Toyota Corrola in good condition is valued at $3,325. Thus, if collision + comprehensive insurance cost $333 or higher, it wouldn't be worth it in the long run.