One important way to reduce your overall insurance costs is to avoid purchasing insurance policies that you do not need. So, which car insurance, life insurance, and travel insurance policies are not needed? The list of policies one may not need will be different for everyone because of the difference in individual risk. For example, someone who does not own a home would not need to purchase a homeowners policy because there is no risk to them of losing their home.

That is an obvious example, but there are times when one's risk is very small and suffering the consequences of the loss is a better risk than purchasing a policy. Below is a list of insurance policies that most people would not need to purchase for various reasons (reasons are listed when applicable):

Insurance to Avoid:

1. Comprehensive and collision coverage with your car insurance for automobiles that have little or no value

2. Car insurance personal injury protection coverage (PIP) or just buy the minimum if you have a good health insurance policy

3. Roadside assistance with your car insurance if you already belong to an organization that offers this

4. Mechanical breakdown insurance added to your car insurance if you currently own a new car or have a leased vehicle that is still under warranty

5. Rental Car Insurance if you have a current full coverage policy or a credit card that already provides this insurance (check with your agent to see how much your current policy will cover)

6. Life Insurance if you are single and have NO dependents (this includes avoiding life insurance for children!)

7. Travel insurance if your current health insurance policy covers you abroad

8. Extended Warranties on Appliances (this in the end may cost more than just buying a new one)

9. Insurance on outstanding credit card balances (this type of insurance can be costly and has a lot of loopholes to go through before any benefit is paid)

10. Credit Insurance, which is voluntary insurance on your mortgage (a typical life insurance policy would be a better option)

By avoiding the above policies, you will not reduce your risk and you still may experience a loss in any or all of the above categories, but the risk for most is so small it's just not worth the price of the insurance.