insuranceBy Deborah Skolnik
Must-Read Facts
Car and homeowners' are no-brainers, but what about those ads you see for other kinds of policies-the ones that make it seem like you'll be up a creek if you don't buy them? Often, the premiums for these niche plans add up to more than the payout, and the fine print lists so many exclusions that you may not see benefits when you need them. If you're tempted by one of the following policies, here are some things to consider. Photo by Getty Images
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Credit Card Insurance
What It Covers
Plans vary, but usually these cover the monthly minimum owed on your balance, so your account doesn't go into collections.
Cost
1% to 2% of your balance (for example, $5 on $500)
Worth It?
Probably not, because the premiums may well add up to more than the minimum you owe (meanwhile, you continue to accrue interest on the rest of your debt). Plus, some policies take awhile to kick in, so you may not receive benefits until your account is past due.
A Better Option
Create a rainy-day fund in an interest-bearing account, and pay your own minimums if you hit a bad patch financially.
Cell Phone Insurance
What It Covers
Damage to your phone; some policies cover loss.
Cost
$5 to $12 a month
Worth It?
Yes, if you have a habit of dropping your phone on the pavement and it's an expensive one, like an iPhone. (Though you'll likely only get a refurbished phone and pay a deductible, it's still cheaper than buying a new one.) But most policies don't cover loss, and if your phone is not pricey or you're due for an upgrade soon, it's not worth it.
Renters' Insurance
What It Covers
Property that is lost or damaged through theft or a disaster in a rented home (although usually not floods or earthquakes). Also covers you if someone has an accident in your rented house or apartment.
Related: Try 15 clever uses for these household items.
Cost
Around $20 a month, depending on where you live
Worth It?
Yes. Many people assume their landlord's insurance covers their stuff, but that's not the case. The premium isn't much compared to the cost of new clothing and appliances.
ID Theft Insurance
What It Covers
Most often, the costs associated with recovering any money or property an identity thief is able to steal.
Cost
Starts at $25 a year
Worth It?
No, since it doesn't protect you from direct monetary losses associated with ID theft, only faxes and calls made to get the money back. Besides, as long as you call your credit card company or bank promptly to report fraudulent activity, you're not responsible in the first place.
Travel Insurance
What It Covers
Typically, it pays for your expenses if you have to cancel or interrupt your vacation, as well as baggage loss.
Cost
5% to 15% of the cost of your trip
Worth It?
It depends. If you're traveling with someone elderly or with health issues, or if you have invested a lot in nonrefundable tickets and just can't risk losing the money, travel insurance can give you peace of mind. But don't confuse it with flight insurance, which covers you in the highly unlikely event of an air disaster.
Related: Check out 8 calming foods that ease stress.
SOURCES: Teresa Bear, certified financial planner and certified public accountant, Mesa, AZ. John Egan, managing editor, InsuranceQuotes.com. Juli McNeely, board member, National Association of Insurance and Financial Advisors.
Original article appeared on WomansDay.com.
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