BASICS · 6 min read
Do I actually need this coverage?
A short, honest way to tell useful coverage from padding.
Start with the loss you could not absorb
Insurance is for the loss that would wreck you, not the loss that would annoy you. Write down the number you could pay out of savings tomorrow without changing your life. Anything above that line belongs on a policy; anything below it is usually cheaper to self-insure.
Coverage that almost always earns its price
- Liability limits. This is the part that pays other people when you are at fault, and it is the cheapest protection per dollar on the entire policy. State minimums are frequently far below the cost of a single serious injury claim.
- Uninsured and underinsured motorist coverage. It pays you when the other driver has nothing.
- Water and sewer backup on a home policy. A small endorsement that covers one of the most common and expensive household claims.
Coverage that is often padding
Low-value add-ons that duplicate something you already have: roadside assistance you get through a credit card or vehicle warranty, rental reimbursement when you own a second car, and small-electronics or appliance riders that cost more over a few years than the item is worth.
Trip-by-trip products sold at checkout are usually priced for the seller, not for you.
The two questions to ask before you keep any line item
First: if this event happened, what would it actually cost me out of pocket? Second: is this covered somewhere else already? If the answer to the first is small, or the answer to the second is yes, drop it and put the savings into higher liability limits instead.
This article is general information only. Coverage, availability, and pricing vary by carrier and by state, and a licensed agent reviews every policy before anything is bound.
Questions people actually ask
How much liability coverage should I carry?
Enough to cover what you could lose in a serious at-fault claim. State minimums are often far below the cost of one injury claim, and raising limits is usually inexpensive compared with the protection added.
Is uninsured motorist coverage worth it?
For most drivers, yes. It pays you when the at-fault driver has no insurance or too little, and a large share of drivers on the road are uninsured or underinsured.
Which insurance add-ons are usually a waste?
Anything you already have elsewhere: roadside assistance duplicated by a card or warranty, rental reimbursement when you own a second car, and small item or appliance riders.