MAKING CENTS: MAKING CENTS: Insurance you don’t need

You can insure just about anything. From “hole in one” insurance to losses of body parts while on the job, there’s a policy for just about everything. The questions are whether you need that coverage and if it is cost effective.

A simple rule to go by for coverage that is a bit out of the ordinary is to size up the risk.

If you were going to give a vehicle for a hole in one, that risk is relatively large. In these situations, you will likely conclude that the premium for the coverage is a good idea even though the occurrence of a hole in one is not likely.

But in the case of getting extra money because you broke your leg or lost an eye while on the job, that is not often a wise choice. Let’s say that you are injured away from work. Is your trauma and financial loss any less because you were riding a bike through the woods when it happened rather than at work? Not likely. In either case you are going to miss work, incur medical bills and either recover or not. But the financial loss is identical in either situation.

The conclusion is that for those with adequate insurance, these extras are typically not needed. This leads one to question: are you properly covered? The answer to that is different for everyone, but basic insurance to me means health, life, disability, long term care, homeowners, liability and auto. Everyone needs to budget the cost for these basic policies into their cost of living. It is not safe to assume that you are adequately covered for all of these risks through your job. Sometimes group coverage offered at work does not have as strong a benefit as you can buy on your own.

Also remember that most insurance acquired through the workplace is only in place while you are an employee. Your life, disability and health insurance frequently do not come with you upon retirement, changing jobs or getting laid off.

For some, extended warranties make a lot of sense, and for others, not so much. If you are a buy-and-hold person who is hard on cars, then perhaps it makes sense to purchase this for your auto. Similarly, if you do a lot of city driving, and spend time dodging pot holes, then the tire warranty is probably a pretty good deal.

Many consumer scholars think extended warranties are i a waste of money. But as a professional consumer, I think the correct answer for you lies in your particular facts and circumstances.