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Do You Really Need That Insurance?

Do You Really Need that Insurance?

Dan Saelinger

While some specialty insurance policies are necessary, others are just a waste of money.

En español | Travel? Cellphone? Pet? We break down which specialty insurance policies can make sense:

Rental-car insurance

Buy if: You don't have a car — and therefore don't already have car insurance — or if you'll be driving in a location where your existing policy may not cover you (such as overseas).

Get money saving tips and better budgeting ideas in the AARP Money Newsletter

Don't buy if: You call your insurance company in advance of your trip and learn you have coverage for the location where you'll be driving.

Pet insurance

Buy if: You would do anything for your pet, even finance, say, $15,000 cancer treatments on a credit card, or pay for a host of expensive second opinions from vets for a particular surgery.

See also: 10 Tricks to cut pet care costs

Don't buy if: You are unlikely to opt for expensive medical treatments for your pet, even if it becomes a life-or-death choice.

Homeowner's insurance rider covering valuables

Buy if: You have individual pieces of jewelry or art that are worth more than what your basic homeowner's insurance policy covers (sometimes only $1,500 to $2,500 total).

Don't buy if: Your policy has a higher limit for individual items of value (sometimes up to $10,000; check with your insurer).

Extended warranty/device insurance

Buy if: You're covering a high-value portable device (such as a smartphone) and you're prone to losing or breaking gear — or if you need a lot of included tech support.

Don't buy if: Your budget could handle replacing a $500 phone without a serious financial crisis — or if rather than trading in your old one, you keep it as a backup.

Travel insurance

Buy if: You've prepaid for an expensive, nonrefundable trip or your health insurance won't cover you where you're going. When choosing, note any exclusions, including reasons for cancellation and preexisting medical conditions.

See also: 12 Ways to save money on travel

Don't buy if: Your flights are changeable and reservations are cancellable without a penalty or if you book using a credit card providing free insurance.