Think twice about add-on insurance coverage

Carry-on luggage at the airport

If you’ve ever rented a car or vacation home or just made a large purchase, you may have been offered an add-on insurance policy. You can purchase an extra insurance policy to cover just about anything these days. But which ones do you really need? Here are some tips to help you decide which add-on policies are worth paying for and which you may want to skip.

Do I need car rental insurance?

When you rent a car, the rental agency may recommend an add-on insurance policy to cover you in case of an accident during your rental period. If you have collision coverage on your personal auto insurance policy, then you may be covered for collision on rental cars. Additionally, if you have a major credit card, the credit card company may offer some level of coverage – as long as you use the card for the rental. LGFCU offers Auto Rental Collision Damage Waiver coverage from Visa® at no extra charge.  

Should I purchase travel insurance?

Most travel insurance policies are offered when booking travel. This add-on covers things like trip cancellation, trip interruption, trip delay, lost luggage or delayed luggage arrival and more. While the coverage sounds like it may be great to have, is the cost of travel insurance worth it?

If you’re concerned about lost luggage, your homeowners policy may cover that. If you have your Homeowners Insurance policy with the Credit Union, contact us before you book your trip. Your policy may offer some coverage for lost luggage.

Do you need travel medical insurance? Your current health insurance plan may cover you while you’re traveling in the United States. If you’re traveling internationally, medical expenses may not be covered by your existing policy. So, before you spend money on additional insurance coverage, check to see what exactly your existing policies will cover.

Is credit and debt cancellation insurance worth it?

This type of insurance is typically offered when you purchase big-ticket items like a car, furniture or a home. It may also be offered by your credit card company, if the card was used for the purchase. A debt or credit cancellation insurance policy typically covers outstanding payments on loans or lines of credit in the event of crises like death, serious illness/injury, and in some cases, loss of job.

It sounds like good coverage to have, especially when you consider how much it costs to purchase a house or a car, and how long the loan terms are for those items. However, you may have enough coverage through other insurance policies or in other financial assets to settle the loan in the event of death or a financial hardship.

Do your homework before purchasing an add-on policy

If you’re considering an add-on insurance policy, do your due diligence before making the purchase. First, check the insurance coverage you already have and what those policies will and will not cover. They may cover more than what you think they will.

Second, check with your credit card company. If you use your credit card for the purchase of big-ticket items like furniture, your credit card company may offer some insurance protection to you just for being a cardholder.

Lastly, check with your auto or life insurance agent. They can give you more details about your policy coverage. From there you can decide if the add-on policy is worth the expense.

The advice provided is for informational purposes only.

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