Making decisions about supplemental insurance policy purchases can be perplexing. Because who really wants to spend money when it's not necessary—or worth it?
To be fair, some supplemental insurance policies can be very helpful and a wise choice. But others are more gimmick than value. To help you weed through the options, we asked industry analysts to share insights about which policies may be worth your money and which you may want to skip. Here's what they had to say.
Pets have health needs just like people. Even if your pet is in good health now, insurance is all about having peace of mind for the future, says Jennifer Fitzgerald, CEO and co-founder of the online insurance marketplace Policygenius, who recommends buying this type of supplemental policy.
"Personally, I bought pet insurance for my dog Ruby because I don't want to ever face the decision of life-saving care for her versus my bank account," says Fitzgerald.
Most people don't realize, adds Fitzgerald, that pet insurance is intended to cover unexpected and large expenses—not routine vet visits that are part of normal pet care. However, many pet insurance plans allow you to opt-in to additional coverage for those types of regular expenses, such as wellness check-ups and vaccinations. But do note, that will be an additional cost.
"It's generally a good idea to seek coverage sooner than later, as pet insurance tends to get more expensive as your pet gets older, and many pet insurance companies won't cover pre-existing conditions," adds Fitzgerald. "It's also better to get insurance sooner in case of an emergency—even when your pet is young and healthy, it's possible for an accident or other surprise vet visit to arise, and pet insurance will give you peace of mind that you're prepared."
You'll also want to consider pet insurance if you have a breed that tends to have health issues, such as recurring hip problems, says Amy Danise, chief insurance analyst for Forbes Advisor.
"Your vet can give you information on the breed's propensity for health issues," says Danise.
Yet another supplemental policy that Fitzgerald says is worth buying, renters insurance is generally one of the most affordable types of policies and provides an inexpensive way for anyone renting to protect their belongings.
"Rates vary depending on factors like where you live and how much coverage you buy, but renters insurance costs an average of $15 a month," says Fitzgerald.
Renters insurance can provide peace of mind for anyone who wants their belongings to be covered in the event of a fire or a break-in, or anyone who is worried about personal liability in the event a guest is injured in your home. If a covered event makes your apartment uninhabitable, a policy may also cover additional living expenses for you during repairs.
It's also worth noting that many landlords actually require you to have this type of policy, says Danielle Marchell, of the insurance comparison site The Zebra.
"This type of coverage does not insure the building itself; instead, your belongings," explains Marchell. "The landlord will already have the property insured on their own. If you're renting a condo, look to get an HO-6 policy and take note that your condo will be covered wall-to-wall—basically, your belongings as well as the inside walls and floors."
Danise, of Forbes Advisor, says this type of policy is worth the money even if you don't feel like your possessions amount to much or are very valuable. The polices provide value in the form of protecting you from an unexpected financial headache.
"Renters insurance policies include liability coverage, which can come to the rescue if you have a big lawsuit against you that's covered by the policy. For example, if your dog bites someone and you're sued, a renters insurance policy could pay legal fees and court judgments," says Danise. "Sometimes this liability protection is more valuable than even protection for your belongings."
General travel insurance
Travel insurance generally protects against financial loss from incidents during travel, like medical evacuation or missing a flight due to injury. The exact details will depend on the specific policy, but travel insurance typically costs around 4 percent to 8 percent of the total trip cost.
"If you're nervous about an upcoming trip and want to have additional peace of mind, purchasing travel insurance is a good way to go," says Fitzgerald, of Policygenius.
It's particularly important to secure this type of coverage when you're traveling outside of the United States, to ensure that you have travel medical insurance available in the event of an emergency.
Many travelers don't realize that their U.S. health plans may have limited or no coverage outside the U.S. and Medicare doesn't work outside the U.S., says Danise of Forbes Advisor.
If you're a frequent traveler, you might also want to consider permanently carrying a personal effects floater, also known as traveler's baggage, to cover your belongings, says Marchell, of The Zebra.
"This type of personal insurance would cover things that tourists have while anywhere in the world, such as cameras, clothes, and souvenirs," explains Marchell.
There are some cases however, in which you can justifiably skip travel insurance altogether, such as when you don't risk losing very much money if an issue arises.
"Skip general travel insurance if you wouldn't lose a lot in non-refundable deposits if you have to cancel a trip. For example, if you're traveling in the U.S. and have refundable airline tickets and a hotel with a good cancellation policy, you probably don't need travel insurance," says Danise.
Rental car insurance
Rental car insurance is typically offered by rental car companies for your extra protection when renting one of their vehicles. However, it may not be necessary to purchase, advises Marchell.
"Before securing rental car insurance, speak with your insurance agent to see if your own auto coverage might be able to extend to a rental vehicle. Auto policy coverage follows the driver, not the car," she explains.
Danise also advises against this type of insurance if you have your own auto insurance policy, but there is one instance when it might prove valuable to spend the money.
"Buy rental car insurance if you want to keep any potential claim off your own auto insurance policy, which could trigger a rate increase," Danise says.
If your jewelry isn't worth much, you can probably skip this type of policy, but if you have serious J.Lo bling, then a jewelry policy is well worth the investment, says Marchell, who recommends purchasing a scheduled personal property endorsement or "add-on" for home insurance or renters insurance.
"This provides extra insurance outside of what's included in your home insurance or renters policy, which typically covers up to $1,500 of jewelry," explains Marchell. "Also, be sure to get the personal property replacement cost endorsement if you have family heirlooms or vintage jewelry, which will reimburse your losses by how much it costs to get your items replaced. If you don't have this endorsement, your property will be refunded by actual cash value, which factors depreciation in the amount of money you receive back in the event of a loss."
Consider a standalone jewelry insurance policy if you want extra coverage, such as insurance for accidental loss and mysterious disappearance. Companies such as Jewelers Mutual sell this, says Danise.
HVAC and utility maintenance plans
If you're in need of a new HVAC system, you'll likely be given the opportunity to purchase a utility maintenance plan along with it. While it can often be second nature to immediately say "not interested" when it comes to add-on plans there are a few factors you should consider before making your decision. These include: the climate you live in, what's included in the plan, how often you use your HVAC system, and the price of the plan, says Lexie Pelchen, home finance expert for Forbes Advisor Home.
"If you live in a place where the weather can be especially hot or cold, keeping up with the general maintenance of your HVAC system is imperative in order to keep it running smoothly and efficiently," advises Pelchen. "In places where the weather can get extreme, having a utility maintenance plan would be worth it, because the plan will likely include general maintenance, and you'll have peace of mind knowing that if something goes wrong, a professional repair should be covered."
Pelchen also suggests carefully considering what's included in a plan before deciding to purchase it. Most plans will at least include seasonal maintenance, checkups, parts and emergency repairs, but these offerings can vary depending on the provider and the package option that you choose.
"If you're a person who uses your HVAC sparingly, you may decide not to purchase a plan, or purchase the lowest tier plan; however, if you're constantly blasting your air conditioning in the summer months and are quick to turn on your heat in the winter months, your HVAC unit is working hard, and a maintenance plan may be worth it," says Pelchen.
As with most purchases, it's important to compare costs. For some, the yearly cost of a HVAC service contract is worth it, but for others, it may make more sense to pay for maintenance and repairs as needed. Forbes Home has found that the typical cost to install a new HVAC system ranges between $4,850 and $9,400.
"Keeping up with preventative maintenance can help avoid the unexpected breakdown of this system, and a utility maintenance plan can help to cover the costs of that maintenance," says Pelchen.
If you're moving into an older home, purchasing a home warranty can be a good idea, as it's likely the systems are no longer functioning like new and will require maintenance at some point in the future.
Forbes Advisor Home says the typical cost for a home warranty is between $25 and $50 per month. This price may vary depending on the plan that you choose, but typical home warranties will cover the major parts of your home, including your plumbing, electric, HVAC and water heaters.
"However, if you're moving into a brand-new home, it's likely that these systems will already be covered by the manufacturer warranty," says Pelchen. "If you already have coverage on these systems, a home warranty may not be necessary."
The bottom line, says Pelchen, is that when it comes to home warranty, it's not a one-size-fits-all decision. However, it's important to make sure you don't put yourself in a position where you're depleting savings if, for instance, your HVAC unit needs to be replaced.
"If you anticipate that your home systems may need to be repaired or replaced in the future, and they're not currently covered by the manufacturer warranty, a home warranty may be a wise investment for you," says Pelchen.